THE WORLD FROM.Mexico City War News May Be Hot in the US, but Bush's Free-Trade Plan Is Getting the Lion's Share of Mexicans' Attention

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IN Mexico, the Persian Gulf fireworks are being seen through free-trade-pact Ray Bans.

By tradition, Mexico is neutral. It has no troops, medical teams, nor ships in the Gulf. President Carlos Salinas de Gortari has been almost mute on the actions of United States and coalition forces.

Here, the moral implications of the "US war on Iraq" are debated in the taco stands. But Mexico's political leadership, as in many developing nations, is focusing on the economic implications of the war.

How will the continued Gulf war affect tourism, already down 20 percent? Will the high oil prices that produced a $3 billion bonanza for this petroleum exporting nation return? Or will lower prices prevail, causing revenues to fall short of 1991 budget projections?

But above all, politicians and press wonder what will happen to the proposed North American free-trade agreement.

How will the Gulf war affect President Bush's popularity and his political influence in Congress? Will the war deepen the US recession, thereby reducing congressional support for an agreement that will likely shift US manufacturing jobs to Mexico?

War news here played second fiddle last week to the announcement of Canada's participation in trilateral trade talks. Mr. Salinas welcomed Canada's participation: "A North American free-trade zone that will be the biggest in the world with 360 million inhabitants, including three nations with an economic production of $6 trillion, will place us in a singularly advantageous position to compete with the other big commercial zones that are being formed in the world."

Initially, Mexico felt Canada's involvement might slow down the talks. Now, opinion has tilted in favor of having Canada's experience at the table; a US-Canada free-trade agreement was signed by President Reagan in September 1988 and became effective Jan. …


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