WASHINGTON -- Wednesday's vote in the House on the North American Free Trade Agreement is evolving into a crucial test of President Clinton's ability to manage do mestic and international economic policy.
No vote since the cliff-hanger on the deficit reduction package has come to define the President's leadership skills in a global economy and his relationship with Congress.
It is also a vote that has already sent waves through financial markets, as evidenced by the swings in the Mexican peso last week and a rally in the U.S. stock market after investors concluded that Vice President Al Gore's handling of Ross Perot boosted chances that Nafta will be approved.
The Nafta debate has been fraught with Political ironies, with GOP chieftain Sen. Phil Gramm, R-Tex., defending the Pact against Rep. Richard Gephardt, D-Mo, the House Majority leader.
In the maneuvering to win the support of House Democrats, Clinton has had to fight Gephardt and Rep. David Bonior, D-Mich., the Democratic whip who would normally be responsible for rounding up votes in favor of the President.
One mark of the uphill struggle for the White House is that all 25 Democratic representatives from the hard-core union territories of New york, New Jersey, and Connecticut oppose Nafta.
In an effort to win public support, Clinton assented to Gore's suggestion to debate Perot -- a decision that went against the conventional wisdom that the folksy Perot with his funny one-liners would slap Gore around like a wooden doll.
As it turned out, Gore came out of his comer and never stopped punching. His cleverly constructed set of arguments and well-placed jabs rattled Perot and made him look like Popeye with a crab in his pants. Perhaps the highlight came when Gore handed Perot a framed photo of Sen. Reed Smoot, R-Utah, and Willis Hawley, R-Ore., the Republican authors of the 1930 Smoot-Hawley tariffs that helped plunge the U.S. into the depression.
Clinton's argument that Nafta will generate jobs for U.S. workers is backed up by a survey released by the National Association of Manufacturers, a powerful trade group that has not always been on the President's side. The association spearheaded opposition to the President's energy tax and has criticized his health plan.
The NAM survey identifies 200 companies that say they would do more business with Mexico and hire more workers if Nafta is approved. The list includes a variety of small large firms from all over the country, from Birmingham Steel in Alabama to Bemiss-Jason Corp. in Neenah, Wis. It is an impressive list of companies making everything from Pringles potato chips to diesel engines.
But with Japan in a deepening recession and Europe struggling with an 11 % unemployment rate, the political pressures among major U.S. trading partners to shut out global competition are intense.
This is the context of the House vote on Nafta. It goes beyond the trade relations with Mexico and Canada and marks a watershed decision on whether the U.S. can continue to lead other nations in the drive to spur economic growth by opening markets.
In his news conference last week, Clinton candidly acknowledged that if Nafta is defeated, efforts to promote similar trade Pacts that extend the reach of U.S. companies in Latin America will be set back.
More immediately, Clinton will have a harder time persuading Japan and other Asian nations -- trading Partners that are now racking up big surpluses with the U.S. -- to open up their markets. And efforts to break the logjam on the Uruguay Round of global trade talks, where the clock is ticking on a Dec. 15 deadline, could suffer.
Defeat of Nafta, if it chills relations with Mexico, could also hurt the Mexican economy, discredit Mexico's leadership, and set back cooperation on sensitive topics ranging from drug control to immigration.
