Scuttle Thy Neighbors

By Adam Zagorin

NEVER LET IT BE SAID THAT MICKEY KANTOR LACKS OPTImism. After two days of talks in Washington last week to wrap up loose ends of the North American Free Trade Agreement, Kantor emerged with his fellow trade representatives from Mexico and Canada and claimed that progress had been satisfactory. He predicted that side accords to safeguard the environment and workers' rights, both critical to the treaty's approval in the U.S. Senate, would be concluded soon.

If he's right, NAFTA, designed to dismantle virtually all trade barriers between the U.S., Canada and Mexico, could go into effect as planned on Jan. 1, 1994. But even as Kantor and his colleagues were negotiating, top White House political consultant Paul Begala was on Capitol Hill urging key Democrats to put off consideration of NAFTA until after they begin to debate the Clinton health-care package. That process could take months following the bill's planned introduction in late September. Such a delay could scuttle the trade accord.

Begala and others in the White House argue that a "signature" program like health-care reform must take priority over the trade agreement. This thinking happens to mesh with arguments set forth in a letter sent to Clinton last week by 103 Democrats who oppose NAFTA. Clinton isn't ready to postpone NAFTA indefinitely, but he agrees with Begala that health care must come first. If delay is indeed the Administration's tactic of choice, it would explain why Bill Daley of Chicago, the President's leading candidate to shepherd NAFTA through Congress, told at least one key House member last week that he is getting "no direction" from the White House on how to sell the treaty.

Fact is, Clinton and many other Democrats have long been leery of NAFTA, a Republican legacy they say the Bush Administration whipped up as a way to help businesses compete at home and abroad -- and to help the G.O.P. in key electoral states such as Texas and California. Candidate Clinton's criticism of the accord drew loud applause from labor and environmentalists. As President, Clinton has kept his distance from NAFTA, despite his private acknowledgment that enactment will give a long-term boost to the economies of both the U.S. and its neighbors. While the proposed delay may simply be a way to win Clinton a breather following the budget and health-care battles, it could prove fatal to NAFTA. Warned a senior Administration official: "If we don't have a treaty on the Hill by early fall, it's in trouble."

With reporting by Michael Duffy/Washington