NAFTA's Sequel: Moving Free Trade Farther South Clinton Aides Weigh Preparedness of Other Latin American Nations, Assess Congressional Opposition

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WITH North American Free Trade Agreement (NAFTA) now on track, the Clinton administration is trying to take the accord south.

Solidifying United States commercial ties with Latin America "is a major step toward American engagement with the parts of the world where we're going to see the most rapid growth in the next several decades," says Lawrence Summers, US Treasury undersecretary for international affairs. "NAFTA," he says, "is the defining issue in American foreign policy not just toward Latin America, but toward the world over the next several years."

The day NAFTA won approval on Capitol Hill, President Clinton was at the White House promising to "reach out to the other market-oriented democracies of Latin America to ask them to join in this great American pact that I believe offers so much hope for our future." Specifically, Mr. Clinton - who supports a strong US export policy as the best way to expand businesses and create employment at home - is referring to exports, American jobs, and what the growing Latin market has to offer.

The region has been dynamic during the past several years of world economic decline when most of the markets for US goods and services have been shrinking, says Susan Kaufman Purcell, vice president of the Americas Society. Growth in US overseas sales has been in developing countries, she says, "and Latin America has accounted for a good two-thirds of that."

As long as economic reforms and democratization continue, say US policymakers and private analysts, Latin America's capacity to buy US goods and services will increase.

"If you look toward the end of this century, you will see a much closer relationship between the US and other Latin American countries," says Jeffrey Garten, Commerce Department undersecretary for international trade.

To help ensure that development, Summers, Mr. Garten, and others are planning short- and medium-term steps to reach the ultimate goal of a hemisphere-wide pact of 700 million people, which may be a decade away. They are assessing the preparedness of certain candidate nations, and anticipating the congressional stumbling blocks to admitting new players.

But, says Garten, all of Latin America should regard NAFTA as an open association, "provided that the economic reform process continues and democratization remains strong. We are clearly moving toward hemispheric trade and production."

White House National Economic Council chairman Robert Rubin emphasizes that "the stakes are very large here" with respect to the agreement's regional impact. "There are nine elections in Latin America over the next year," he says. …


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