Clinton Will Invite Mexico To Join US In Pacific Pact

AFTER NAFTA VOTE

WHETHER the White House wins or loses the fight for passage of the North American Free Trade Agreement, it is taking steps to ensure Mexico's inclusion in an even broader emerging free-trade group - the Asia Pacific Economic Cooperation (APEC) council.

APEC will likely induct Mexico next week, when President Clinton, accompanied by top United States trade and finance officials, meets his APEC counterparts in Seattle, Treasury Secretary Lloyd Bentsen told the Monitor.

Generating one-half of the world's trade and economic growth, the five-year-old APEC - composed of the US, Canada, China, Japan, Australia, South Korea, Hong Kong, Taiwan, Singapore, Thailand, Indonesia, Malaysia, the Philippines, New Zealand, and Brunei - represents vast commercial opportunities. The Clinton team speaks of a ``Pacific community,'' with ``integrated markets of 2 billion people,'' in which ``trade grows faster than world trade.''

The Pacific's draw is burgeoning markets and ready investment capital. China alone - where economic growth means ever-growing demands for imports - accounts for 1.2 billion consumers. The US will finance much of its own domestic investments with money from cash-rich Asian economies.

Australia is typical of the rapidly changing and growing markets in the Pacific Rim. ``We're an economy trying to restructure - to develop a stronger industrial base,'' says Geoff Brennan, Australia's commercial minister in Washington. ``For us, APEC is really our future. That's why we're driving it so hard.''

The next step in the growth of APEC promises to be Mexico's inclusion. ``We see Mexico's participation in APEC as a natural progression,'' says Mr. Brennan, a key architect of APEC. ``Canada and the US are already members - why would you have one of the three [major North American trading partners] excluded?''

Mr. Brennan says Mexico already meets the APEC qualifications with its economic reforms, its Pacific coast, and its extensive trade with the region.

A senior US administration official agrees that Mexico's membership is ``just a legitimate extension.'' But, he says, it also reflects Clinton's new Pacific policy thrust.

``Bosnia, Somalia, NAFTA, GATT [General Agreement on Tariffs and Trade] - all of these are remnants of the previous administration. By inviting all the leaders of the Pacific region together [for next week's meeting], Clinton is saying that we're going to be engaged, that we're going to lead. That's a real accomplishment.''

In that context, he says, ``Mexico will be warmly embraced.''

If the North American trade accord wins congressional approval next week, Mexico's entree into APEC is a way to strengthen NAFTA's bonds with the world's fastest-growing economies.

On the other hand, ``if NAFTA tanks,'' the official says, ``there will be many [APEC] trade and investment framework agreements that move toward free trade.''

Some trade watchers see Mexico joining APEC as a way to help both neutralize moves toward an exclusively Asian trade pact and blunt the impact of what may become the European Community's exclusionary markets.

Brennan, the Australian minister, says that even the perception of APEC as a force is a ``way to win concessions from the European Community. It will give our European friends a scare.''

But given the difficulties the Clinton administration has experienced over the controversial NAFTA, there is skepticism across the Atlantic about the near-term possibility of an Asia Pacific economic community.

``I'm not so worried about an APEC free- trade agreement before the end of the century,'' says Gijs de Vries, a Dutch member of the European Parliament and the Liberal Party's spokesman on trade policy. ``Neither the US nor the Asians are ready for liberalization.''

Brennan agrees that APEC is at least 10 years away.

``We're not at the stage of throwing a trade agreement and all the things that go with it into the laps of Congress,'' he says.

But the Australian predicts that APEC, replete with the US, Canada, and Mexico, will not be nearly as controversial as NAFTA.

Unlike the trade treaty with Mexico, he says, APEC will not threaten the potential loss of US jobs to cheaper labor south of the border. ``APEC is creating opportunities for our children's future,'' Brennan says.

However, the senior administration official who is bullish on APEC says winning American acceptance for the council as a free trade group will ultimately be quite a challenge to US policymakers.

``If we're worried about losing a few jobs to Mexico, has anybody been to China lately?'' he asks.