Clinton gamble pays off with Nafta victory: As the voting in Congress goes the President's way, he turns to east and west to tackle new trade opportunities

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The Independent Online
WASHINGTON - It was in the end a famous victory, 'a defining moment' that might mark the turning point of an unsure presidency. But the domestic political price Bill Clinton must pay for the resounding House endorsement of the North American Free Trade Agreement could yet be considerable.

Speaking to hundreds of supporters on the White House lawn as he left for the Asian Pacific (Apec) summit in Seattle, Mr Clinton yesterday hailed Wednesday night's vote as the harbinger of a 'great new era in North America'. After the formality of Senate approval of Nafta next week (some 60 of the 100 Senators are already committed to the pact) he announced that Vice- President Al Gore would go to Mexico to discuss Nafta's implementation with President Carlos Salinas, before it takes effect on 1 January.

By any standards, the outcome was an astonishing triumph for Mr Clinton. Last summer, even his own officials were publicly writing off Nafta as 'dead in the House'. But the eventual majority of 234 to 200 was far higher than expected, far more than another knife-edge 'Clinton landslide' wrily predicted by Nafta optimists little more than 24 hours before the vote.

A White House usually held to be cack-handed and disorganised produced the most aggressive and focused lobbying drive in the recent memory of Capitol Hill. The result was a bipartisan victory that confirms the President's credentials as a 'New Democrat', able to move beyond traditional party constituencies, and bodes well for his chances of building a similar cross- party alliance that will be required to achieve health care reform.

Banished, at least for now, is the image of Mr Clinton as a leader who folds his tent at the first whiff of enemy gunfire. After a sluggish start, he staked his all on a measure he had inherited from his Republican predecessors, portraying Nafta as a choice between fear and hope, between the past and the future. The gamble has paid off.

At home, he has dented the allure of Ross Perot, the Texas billionaire and arch-opponent of Nafta. On the international stage, the House vote immeasurably strengthens Mr Clinton's hand as he carries the message of freer trade to the 15-nation Apec gathering, and as he prepares for the fast approaching endgame in discussions on a new Gatt round, of far more import for the world economy than Nafta.

None the less, the President still has much work to do - both to justify the flurry of side deals struck with individual states and congressmen, and repair the split within his own party and the rift with its traditional union backers. Nafta produced the extraordinary spectacle of a Democratic President allied with Republicans and big business against organised labour.

With 132 votes, the Republicans delivered well over half the pro- Nafta majority. For all the pressure, 156 of 258 Democrat members disavowed their President. 'The breach will be quickly healed,' predicted Mr Gore yesterday. But in the case of the unions it may not be so simple.

Labour leaders yesterday spoke with fury of the 'great candy store' the White House had opened to buy votes. Workers had been 'stiffed', protested Lane Kirkland, the leader of the most powerful US union grouping, the AFL-CIO. More menacing still, one of his lieutenants warned that 'We'll get even' at the 1994 elections - implying unions would cut off campaign funds for errant congressmen, and possibly run rival candidates in vulnerable districts. Mr Clinton's calculation is that memories will fade, and that a gathering US economic recovery will remove the risk of massive short-term job losses brandished by Nafta's foes. In fact, most US economists argue that the immediate effects of the pact, whether good or bad, will be very small.

But fences must be mended abroad as well. In the US, dipping into the pork-barrel is standard operating procedure. But some of the country's key trading partners will be less than amused at the deals that have been cut - among them promises by Mr Clinton of curbs on imports from Canada of wheat and peanut-butter, checks on Australian and New Zealand beef shipped through Mexico, as well as special protection for southern citrus and winter vegetable growers.

In Seattle, the President will have to square the new Canadian Prime Minister, Jean Chretien, whose ruling Liberal party is formally committed to renegotiating Nafta, on the wheat and peanut-butter measures. France, too, could be tempted to follow Washington's example and insist on extra protection for its farmers in the Gatt talks, whose current deadline is 15 December.

In short, the lapidary judgement of Mario Cuomo, the Democratic Governor of New York and a foe of Nafta to the end, is yet to be disproved. 'This is a victory. But in the barren ground called the political turf, victories die young.' Right now though, Mr Clinton is undeniably a victor.

The agreement

Nafta eliminates tariffs over the next 20 years between the US, Canada and Mexico, creating the world's largest trade bloc. This is good news for US farmers who stand to gain by exports.

Mexico to eliminate regulations restricting foreign investment. Profits can be taken out of Mexico by US and Canadian firms. Investors to be fully compensated if property is seized.

Mexico to open its car market, by cutting its 20 per cent tariff on vehicles to 10 per cent.

US and Canadian firms gain access to Mexico's electricity, petrochemical and energy services.

(Photograph omitted)