THE WORLD FROM.Mexico City Political Changes in Washington and Ottawa Are Buffeting Mexican Hopes for a Free-Trade Agreement

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IF there was any doubt here, it is now clear that the fate of the North American Free Trade Agreement (NAFTA) will not be determined by what happens in Mexico's smog-enshrouded capital.

The real battle is being waged in Ottawa and Washington. And there was ample evidence of that this past week.

Canadian Prime Minister Brian Mulroney's plans to step down in June sent tremors through the Mexican stock exchange. The business community is concerned that NAFTA may be held up because of the resignation.

The unpopular Mr. Mulroney is promising to push NAFTA ratification through the Canadian Parliament; legislative hearings began on Feb. 25. While it's a fairly safe pledge given the 10-vote margin Mulroney's Progressive Conservative Party holds, many party members will be weighing NAFTA's dismal image in Canada against their own re-election prospects.

"Hey, Jaime ... what do you think of Mulroney's resignation?," queries a political cartoon in the Mexican daily newspaper El Financiero. The next scene shows Mexico's Commerce Secretary Jaime Jose Serra Puche. One hand holds a briefcase, and the other is gripping an inner tube around his waist. Meaning: The NAFTA ship is approaching dangerous waters.

LAST week in Washington, three outspoken Mexican NAFTA critics had their day before a House subcommittee on small business. Adolfo Aguilar Zinser urged the US Congress to postpone NAFTA ratification so it could be an issue in the 1994 Mexican presidential elections.

Mr. Zinser, a political analyst at Mexico's National Autonomous University, said the Mexican Congress - dominated by the ruling party - would not truly debate NAFTA's implications when it meets in April. "The people of Mexico will see their future debated here in Washington while in Mexico NAFTA is taken as a done deal. …