Bush Sees Campaign Boost From Free-Trade Issue

PRESIDENT Bush moves one step closer to a trade victory today when the North American Free Trade Agreement (NAFTA) between the United States, Canada, and Mexico is initialed in San Antonio, Texas.

"It's quite an achievement for the three countries now developing the world's largest market," says a US trade official. NAFTA aims to eliminate barriers to farm products and manufactured goods and services, allow the free-flow of investments, and protect intellectual property rights - including patents.

After Mr. Bush holds trilateral talks in Texas Oct. 7 with Mexican President Carlos Salinas de Gortari and Canadian Prime Minister Brian Mulroney, US Trade Representative Carla Hills will meet with her Canadian and Mexican counterparts to initial the three-way accord.

The president's journey to Texas was prompted by a ceremony that is technically a formality. Congress isn't likely to sign off on NAFTA until later next year, but he is clearly anxious to gain some political mileage. The US trade official confirms that Bush's San Antonio trip is an opportunity to highlight a triumph. Under the Bush administration, US exports have risen almost 30 percent and the trade deficit has narrowed by 44 percent.

But Democratic challenger Bill Clinton has shifted the focus from Bush's trade record to his stewardship of the US economy. The Arkansas governor points to a steady stream of bad economic news: Despite the lowest interest rates in some 20 years, recent sales of new homes have fallen sharply; manufacturing orders have declined, and the number of Americans registering for unemployment is rising. This week's skittish stock market underscores the business world's concern.

Despite his recent endorsement of the general agreement, Governor Clinton is also warning voters that Bush's NAFTA could further damage the ailing US economy. Clinton argues that unless Washington takes unilateral action and brokers supplemental agreements to protect American labor and manufacturers from job and investment flight to Mexico, American commercial enterprises will abandon the US for low-wage workers, lax labor laws, and low environmental standards across the border. Clinton also calls on the

US government to provide workers displaced by the agreement with job training in marketable skills. He pledges that, if elected president, he will make that happen.

Trade Representative Hills insists such provisions are already underway. She describes the president's Worker Adjustment Initiative that would spend "at least $335 million a year ... to help retrain workers affected by NAFTA" and an additional $670 million, if necessary

BROADER trade agreements, Bush contends, will build bigger markets for US goods and generate jobs and wealth at home. NAFTA will create a market of 360 million people with a combined output of $6 trillion, and 400,000 new jobs by 1995, he says.

Exports are credited with achieving what little growth the US economy has realized over the past two years of economic downturn. White House officials often point to exports as a measure of their success. But public confidence in national domestic policy makers has steadily eroded. Forecasters and pollsters show that the dramatic drop in consumer confidence and voter satisfaction corresponds with the president's low popularity ratings.

Clinton charges that Bush's failure to make good on 1988 campaign promises, such as the "no new taxes" pledge and 30 million new jobs in eight years have contributed to the decline in public confidence. Roughly 1 million new US jobs have been created during the past four years under Bush. Determined to defeat strong opposition from US lawmakers, Bush pushed hard to negotiate NAFTA before the Republican National Convention in August. In his nomination acceptance speech at the convention, he pledged to tur n the US into an "export superpower."

Caleb Marshall, spokesman for US Sen. Max Baucus (D) of Montana, chairman of the Senate Finance Committee's subcommittee on international trade, says: "The White House is touting NAFTA as the cornerstone of Bush's economic plan for the future, but it's clear that this whole process has been driven by Bush's political strategy."

On the campaign trail, Bush has pointed to his opponent's foot-dragging on the free trade agreement. Republican strategists point to Clinton's slow endorsement of NAFTA, and his many qualifications of it, as another reason not to trust Bill Clinton.

On the stump and in the upcoming formal presidential debates, Bush and Clinton will address NAFTA issues. The campaign discussion, including third party candidate Ross Perot's opposition to NAFTA, is a forerunner of the Capitol Hill debate that will unfold in the many months ahead.

Under law, Bush cannot sign NAFTA until 90 calendar days after he notifies Congress, which he did on Sept. 18. Bush can sign the accord in mid-December. Congress then has until August 1993, to vote on the agreement.