THIS IS NO WAY TO WRITE A TRADE POLICY

I don't know about you, but now that the North American Free Trade Agreement has been enacted by Congress, I feel better already. You can almost feel prosperity in the air, and I'm waiting for all that free trade that was promised to get moving north and south across the border. To paraphrase, good times are just around the next paragraph in NAFTA.

I don't mean to be cynical, for in the final throes of the congressional voting, I was actually rooting for the treaty. Not because I believed all that was being said but because, like many Americans, I had grown weary of senseless claims, arguments and Larry King debates. Only a third of our state's delegation in the House of Representatives wound up voting for NAFTA, and Dick Gephardt remained opposed even as Bill wined, dined and stroked him at the White House.

President Clinton promptly labeled the vote a "victory," rejoicing in the narrow vote as if it were some kind of mandate to throw down all trade barriers and stop collecting tariffs. It didn't take him long at the Asia Pacific trade meeting in Seattle to realize that the Japanese, Chinese and Taiwanese weren't the least impressed by the treaty the Congress had just approved. Those boys from the Orient live in the real world, and they're not about to get excited about a treaty that only a handful of Americans had read, much less understood.

On a couple of occasions during the great NAFTA discussion period, I noted several problems attached to the treaty. That produced calls from as far away as Washington that carried a tone of condescension, implying I was too insular to understand the ramifications and, after all, what about all those former presidents and Nobel Laureates in economics?

Don't get me wrong. NAFTA is not a foolish notion and it deserved careful thought. The trouble is, most of the debate missed not only the bull's eye but the whole target. NAFTA, despite its name, is not a free trade compact. Admittedly, it calls for total freeing of trade restrictions after 15 years, but anyone who buys that believes in the tooth fairy. The treaty is a thick book of legalese, setting terms for managing trade. It's simply a managed-trade agreement.

NAFTA's specifications as to trade in farm products, which caused many Missourians to support it, are confined to the U.S. and Mexico. A separate trade agreement with Canada is now generating intense legal battles over shipments of wheat, premonitory of what can be expected as NAFTA goes into effect.

Two incidents in the media illustrate differences in how NAFTA is viewed. For the Gore-Perot debate, a photograph of the two authors of the infamous Smoot-Hawley tariff act of 1930 was flashed before a startled Perot. The professed wisdom is that opponents of NAFTA are as blind as were the authors of Smoot-Hawley, but the treaty has nothing in common with the 1930 act, which was a traditional high-tariff law. NAFTA bears on how one of the most developed nations in the world, the United States, is to relate to its impoverished Third World neighbor.

In the final analysis, much of the dispute over the treaty arose from two different visions of a future Mexico under NAFTA. One foresees an economically revived Mexico trading actively with us on equal terms. In the other vision, Mexico will remain an impoverished Third World country, mired in overpopulation and other ills while presenting difficult problems for the U.S. as a sheltering neighbor.

It was fun to watch Lee Iacocca suddenly become a spokesman for free trade after years of bashing Japanese car imports. Most economists insist that free trade is always good, but that view is not unanimous. Dr. Robert C. Scott of the University of Maryland has never won a Nobel prize but he noted the other day that much trade today is inter-industry. The United States still engages in some trade of this kind, as when we ship our wheat in exchange for Saudi Arabia's oil.

A large part of today's trading, especially among developed nations, is intra-industry. For example, multinational companies ship their own raw and finished products all over the globe, boosting trade statistics. This kind of trade accounts for 90.7 percent of all U.S. exports and 75.6 percent of all U.S. imports. Moreover, almost half of all trade takes place entirely within these large corporations and their affiliates. Much of our trade with Mexico in recent years, publicized so widely, has been intra-firm transfers.

NAFTA is an instrument about how our governments are going to manage this trade, but the truth is much of it can only be managed by the large multinational companies that control it. This isn't free trade at all, regardless of the wisdom of Washington, where the real issue finally became which side had more votes. What a way to write our trade policies!

[Distributed by Missouri News & Editorial Service, c. CIright (O) by MNES p.,1.]