NAFTA - boon or boondoggle?

• Author: Seglem, Lee

As President Clinton and top officials of his administration make their final sweep to sell Congress and the nation on the merits of the North American Free Trade Agreement, they will have to work overtime to convince Alice Palmer.

Like Clinton, Palmer, a member of the Illinois Senate, is a Democrat. But unlike the president, she does not share the view that NAFTA, by breaking down tariffs and others barriers to free trade between the United States, Canada and Mexico, will produce a veritable explosion of cross-border economic growth and employment over the next 15 years. Quite the contrary, Palmer fears that a far less rosy scenario will unfold: that the economic surge, if it does occur at all, will follow the route of a one-way street--due south to the land of cheaper labor and lower all-around production costs. And, she believes, states have ample reason to be jittery.

Palmer knows about the loss of jobs. "I live less than a mile from the southeast side of Chicago where all the steel mills have closed. At one point in the past 10 years, six to eight thousand people lost their jobs over the course of just one weekend. That area has just not recovered--ever.

"We are already scrambling to hold onto jobs [in this country] and to try to attract new ones amid the kind of infighting that always goes on between cities and states to attract business," she says. "It's a desperation economy, and I think this [trade agreement] would just put the coffin nail in."

Myths Abound

Palmer's worries are vehemently dismissed by NAFTA supporters, whose ranks include numerous economists, U.S. industries and elected officials of all political stripes. A whole range of complex economic forces having nothing to do with NAFTA led to the demise of the U.S. steel industry, they say, adding that the trade agreement in its most fundamental configuration is simply a vital part of a long-term strategy for domestic revitalization. They also warn of an appreciable downside if NAFTA fails to win approval: potential chaos in Mexico's financial markets, a serious crimp in cross-border commerce with a key trading partner and a political backlash against the United States rippling across much of Latin America.

Texas Senator Carlos Truan says we've already lost jobs "to Malaysia, Taiwan, Singapore and Hong Kong. Those jobs are gone because we're not concentrating on developing the ability to compete."

He says 46 states ahve the potential of benefiting from NAFTA. "The gains will come because there will be more customers for electronic and high-tech equipment, additional clients for our manufactured goods."

"It is hard to find an issue about which there are more myths," Roger Altman, Clinton's deputy treasury secretary, told a gathering of the nation's governors last August as the administration kicked off its campaign for congressional approval. "If U.S. jobs were to flow south simply because of low Mexican wages, they would already have done so. NAFTA is a central element of this administration's economic policies, and we intend to fight tooth and nail for this agreement."

Nonetheless, deep concerns of the sort voiced by Palmer typify the controversy surrounding NAFTA as consideration of all of its potential implications begins to trickle beyond Washington and to sink into the grass roots.

Legislators Are Unconvinced

At the state level, although the trade agreement has won the backing of all but a handful of governors, it has found a far less enthusiastic reception among rank-and-file legislators buffeted by the concerns of their constituents as well as by powerful special interests like organized labor.

As of September, bills and resolutions specifically addressing NAFTA were introduced in 19 states. Of those, only three pieces of proposed legislation--two bills in Arizona and one in North Carolina--could be construed as supporting the agreement.

The bulk of the legislative proposals either flatly oppose NAFTA or request Congress to study more fully its potential impact. Various bills run the gamut:

* In California, legislators have raised questions about the potential injurious effect of NAFTA on employment standards, illegal immigration and worker training.

* Florida lawmakers have sought to have certain agricultural products, primarily citrus fruits, continue to be subject to import restrictions until Mexico improves its regulation of labor, sanitary conditions and pesticide use.

* In Hawaii, a Senate resolution condemned NAFTA as a threat to that state's crucial economic linchpin, the sugar industry, and declared that by making Hawaiian agricultural exports less competitive, it could damage efforts to conserve and protect the island state's lands.

* In Illinois, legislators, including Senator Palmer, introduced a resolution stating that the statutory sovereignty...