Drug Flow and Illegals Mar US -Mexico Ties

ERNESTO ZEDILLO PONCE DE LEN is a brave man.

The Mexican president, his first 10 months in office dominated by the country's worst economic crisis in decades, arrives in the United States Monday for his first state visit.

It is at a time when Mexico is not exactly the apple of Washington's eye. And making matters worse for Mr. Zedillo is the perception at home that he is weak and lacks direction.

This is the first visit to Washington by a Mexican president in what Mexican political analyst Jorge Castaneda calls ''the new post-NAFTA reality.''

A bilateral relationship that was increasingly dominated by talk of interdependence and cooperation under former President Carlos Salinas de Gortari - and highlighted by passage of the North American Free Trade Agreement - is now strained by such issues as immigration and drug-trafficking.

While those issues will be discussed during the three-day visit, primary attention will go to the prospects for Mexico's economic health and political stability as Zedillo meets with President Clinton, administration officials, congressional leaders, and business leaders in New York.

A 'new post-NAFTA reality' has harmed relations. President Zedillo will visit the US next week to try to patch things up.

''The two key issues right now are immigration and drugs, and the direction of both is not particularly good,'' says Christopher Whalen, editor of the Mexico Report in Washington. American officials warn that Mexico's drug mafia is busy picking up on moving drugs to the US where Colombia's decapitated cocaine cartels have recently faltered. Mexican officials increasingly criticize the abuses Mexican immigrants face in the wake of ''anti-immigrant hysteria'' in the United States.

On the economic front, Zedillo visits a Washington where Congress earlier this year refused to back Clinton's financial rescue package for Mexico, forcing Clinton to offer a $20 billion loan by decree. Since then, rhetoric from some quarters depicting Mexico as a lost economic case has harshened.

To counter that, Zedillo will be able to point to a financial recovery - controlled inflation, lower interest rates, a trade deficit reversed - that came sooner than many economists anticipated. And Finance Minister Guillermo Ortiz announced yesterday a pre-payment of $700 million in short-term debt to the US.

At the same time, the Mexican president will make his trip against a backdrop of renewed financial volatility here. On Monday, the Mexican stock market fell more than 4 percent, continuing a recent downward trend. A peso that had stabilized near six to the dollar is weakening again, and interest rates have started to creep back up. Responsibility for the weakness is pinned not only on recent reports of renewed investor flight, but also on fresh signs that Zedillo's attempts to promote a smooth transition to a more open and democratic political system are beset by resistance from a still-powerful old guard.

''Both the White House and Los Pinos [Mexico's White House equivalent] will try to say the financial crisis is over, but I'm not sure how many listeners are going to believe it,'' Mr. Whalen says. ''The young Republicans who enjoy a growing share of the power [in Washington] don't want any part of Mexico. They don't even want to hear about it.''

Yet Mexico's unfavorable image in much of nonadministration Washington - and the chance to counter it - is exactly why some observers from both sides of the Rio Grande buck the predominant thinking to say that this visit, planned since last spring, is actually taking place at a good time.

''This is a very good time for us to be there, to discuss our progress and explain the objectives of the Zedillo program, as well as the goals of our cooperation with the US,'' says a source within the Mexican presidency. As for the cooler reception Zedillo might receive outside of Clinton administration circles, the official adds, ''One thing we're confident will come out from either side of the [political] aisle is that the relationship with Mexico is an important one.''

THE chance to change how many Americans view Mexico is another reason the trip's timing is important. ''It's something Zedillo can use to his advantage, to at least revise how many policymakers see him and Mexico,'' says Roderic Camp, a prominent Mexico specialist at Tulane University in New Orleans.

Zedillo can tout the list of accomplishments that he has been claiming in recent speeches, Mr. Camp says: negotiations with guerrillas in the southeastern state of Chiapas that are bearing their first fruits; honest elections in some Mexican states; the beginnings of judicial reform; and improved macroeconomic indicators. But Camp is not sure that Zedillo, who he says suffers a ''communication deficiency,'' will be able to convey to American policymakers and business people what he has failed to communicate to the Mexican people. ''It takes a certain personality and confidence to convey that you are in charge of the change rather than the change controlling you,'' Camp says, ''and Zedillo has not been able to switch that around.''

Zedillo's biggest challenge next week may be to redirect US-Mexico relations to the emphasis on trade and development cooperation. That was the direction they were headed before the December peso crash. With Washington increasingly in pre-1996 election form, however, that may be an impossible task.