6:51 AM Nov 4, 1993

CLINTON PULLS THE STOPS TO WIN NAFTA, BUT..

Washington Nov 3 (TWN,IPS) -- US President Bill Clinton and his administration appear to have pulled the stops in battling to win Congressional approval for the NAFTA, due to come to a vote in the House on 17 November.

Presenting the bill on the pact in Congress on Wednesday, Clinton said approving NAFTA -- which would link Canada, Mexico and the US in the world's biggest free trade zone -- would be a firm step towards entering the 21st century with a revitalised US economy. He said he would use every opportunity to promote the pact, which is still short of the 218 votes it needs for approval by the lower House.

The Clinton administration, waging a battle to secure NAFTA's approval in the House of Representatives, has ordered all its top officials to speak out for the trade accord between now and the crucial Nov. 17 vote.

Two of its officials, the second ranking official at the Treasury, Lawrence Summers and assistant US Under-Secretary for inter-American affairs, Edward Casey, spoke and plugged the line for NAFTA at a Washington conference on the role of Japan and the US in Latin America's integration in the world economy.

The Conference has been organized by the Citizens' Network for Foreign Affairs, a US organisation and the Inter-American Development Bank.

But recent events, including last week's crushing defeat of the pro-Nafta Conservative government in Canada, appear to be hurting Clinton's chances of winning.

Some analysts said Wednesday that the defeat Tuesday of Democratic candidates in New York and New Jersey, for whom Clinton had personally campaigned, had further reduced the President's political clout with undecided lawmakers.

At one point in his campaign to whip up support for Nafta, Clinton warned that if Congress turned down the pact, Japan would sign a trade accord with Mexico and the US trade interests and jobs would suffer.

A ranking Japanese official, Shinya Nagai, (head of the Latin American desk in Japan's foreign ministry) told the Washington conference that Japan's interest in cooperation with Latin America and the US will remain high irrespective of the fate of the proposed NAFTA,.

Another, a former Japanese Vice-Minister for International Affairs in the Finance Ministry went to bat for Nafta and warned that its defeat could undercut other US initiatives, such as the Asia-Pacific Economic Cooperation (APEC) Summit in Seattle this month.

"If NAFTA fails, can Heads of State gather in Seattle without anxiety and uncertainty about US initiatives?" he asked. Such a failure "would undercut US credibility in Asia and the Pacific."

Nagai was responding to fears that his country might lose interest in Latin America if Nafta is voted down by the US Congress.

Nagai said his country would keep on supporting economic adjustment and efforts to consolidate democracy in Latin America.

Japan is a major business partner for Latin America, although it lags far behind the US. Japanese direct investments in Latin America amount to $46.5 billion, according to the Latin American Economic System (SELA).

Trade between Japan and Latin America totalled roughly $24.1 billion in 1992, with the balance heavily in Tokyo's favour. Exports from the Japan to the sub-region topped $15.4 billion, while its imports from Latin America amounted to about $8.7 billion, Sela noted in a recent report.

Trade between the US and Latin America amounted to more than 134 billion dollars in 1992, when Washington sold about 73 billion dollars' worth of goods and imported roughly 61 billion dollars' worth from its southern neighbours.

US officials say Nafta would increase trade with and investment in Mexico and, eventually, the rest of Latin America, and thus boost the US economy.

Speaking at the conference, Casey, denied that Clinton's statement (on Japan moving into and supplanting the US in Mexico) implied that Washington aimed to use Nafta to close the doors on Japan. The issue at stake, he said, was that if the US turned its back on Mexico, that country would turn to other nations and Latin America would push forward its integration drive to strengthen its international position.

Summers extolled the virtues of the NAFTA and insisted that NAFTA will pass. He described the pact as "the defining issue in US foreign policy not only towards Latin America, but towards the world."

In his prepared remarks made available to the press, he also described it as "the litmus test for our commitment to Latin America..its failure.. a blow to the momentum of reform... and would hurt economies throughout the region."

Summers and Clinton were supported at the same conference when Chilean Finance Minister Alejandro Foxley took a similar stance and predicted that if the US rejected Nafta, that would be a sign to Latin America that opening up its economy was not the best option and the countries of the sub-region could close in on themselves so as to confront other trade blocs.

At the presentation of his NAFTA bill to the Congress Wednesday, Clinton warned that if the legislators said 'no' to the pact, the US risked losing the natural trade advantage it stands to have when Mexico and the rest of Latin America build strong market economies and democracies.

He spoke of more than 370 million consumers and an annual production of 6,500 billion dollars (in a NAFTA market) and said that the pact would allow for improved environmental conditions along the US-Mexican border and stimulate the opening up of markets in the rest of Latin America.

However, the anti-Nafta lobby, both within and outside the US Congress, has kept up an intense campaign to block its approval.

And some analysts said that recent events, including last week's crushing defeat of the pro-Nafta Conservative government in Canada and the outcome in Tuesday's elections in the US where Democrats lost in New Jersey and New York hurt Clinton's chances of winning.

With Congressional candidates looking towards next November's elections to the lower house, they would be looking more towards their constituencies to make sure of re-election, rather than loyalties to the White House and closing of ranks.