Mexican Trade Pact Lobbying Growing Pitched : Commerce: Key votes in Congress are expected soon. The White House is stumping for it, but environmental and labor groups oppose it, and many lawmakers are skeptical.

WASHINGTON — When the Bush Administration negotiated a free-trade agreement with Canada in 1988, the pact sailed through Congress with hardly a stir. Now that the Administration is trying to do the same with Mexico, it has touched off this year’s most ferocious lobbying battle.

U.S. Trade Representative Carla Anderson Hills is spending so much time on Capitol Hill--often with another Cabinet officer or two in tow--that senators are joking about charging her rent. Commerce Secretary Robert A. Mosbacher and his Mexican counterpart, Jaime Serra-Puche, are wrestling the issue as a tag team, touring the two countries together to argue how free trade will be a boon on both sides of the border.

White House officials say they have contacted every member of Congress, some as many as four times. Wavering lawmakers are being rounded up and herded to the White House for intimate chats with President Bush. It is the biggest personal lobbying effort the President has undertaken since last fall’s fights on the budget and Bush’s plan to cut the tax rate on capital gains, a White House aide said.

With the popular President putting so much of his prestige on the line, many believe that his odds of winning have improved markedly the last few weeks, particularly after he sent lawmakers an 80-page letter promising to take many of their concerns into account in the negotiations.

But White House officials are far from sanguine. “The direction is good, but the fight is not over,” one said.

Organized labor has made defeating the agreement its top priority. Almost daily, environmental and consumer groups offer grisly displays of raw sewage, poisons and filth spewing across the U.S.-Mexico border--only a foretaste, they say, of what lower trade barriers would bring.

With almost 2,000 corporations taking advantage of laws that allow them to set up tariff-free operations along the border, “the conclusion that we’ve reached is that the U.S. corporations have turned the border into a 2,000-mile Love Canal,” Craig Merrilees of the National Toxics Campaign asserted at a news conference Thursday. “If you like what’s happening in the free-trade zone along the border, you’re going to love what they have in store for you in the free-trade agreement.”

Formidable business coalitions counter those arguments with apocalyptic warnings that the United States will get clobbered in the world market unless it takes a cue from the Europeans and Asians and forms a trading bloc with its neighbors.

And it seems that every lobbyist in town has managed to get a piece of the action, with many of the most elite and influential firms signing on with the Mexican government. Each side is backing its arguments with weighty studies commissioned from government agencies and private auditing firms.

Creating a free-trade zone means that, for purposes of doing business, the economies of two countries are melded into one. Virtually all the traditional barriers to trade--tariffs, quotas and the like--simply vanish.

The Canadian agreement drew relatively little opposition because it married two economies that operate with roughly similar wage scales and government regulations. But Mexico’s wages are only one-seventh those paid in this country. Until recently, its enforcement of environmental and worker safety regulations has been lax and its workers get few of the fringe benefits that are considered standard in this country.

Opponents say the agreement will encourage U.S. firms to move to Mexico to exploit those differences. Supporters say that without the economic benefits of free trade, Mexico has less hope of achieving any of its ambitious plans to even out the disparities.

Although trade battles always pit special interests against each other, this one may be the biggest clash yet. “The lobbying is very, very focused and intense,” says Calman J. Cohen, who heads the Emergency Committee for American Trade, which is pressing for the agreement. “The stakes are as high as they have ever been.”

Yet all this effort is focused on a trade agreement that has not even been negotiated. Indeed, Congress is not likely to see what those talks produce until next year.

What is at issue now--with House and Senate committees scheduled to vote next week and action by the parent bodies by the end of the month--is merely the authority that the Bush Administration says it needs to begin negotiations aimed at producing an agreement in the next two years.

The Administration says the talks cannot begin unless it gets assurances--known as “fast-track authority”--that Congress will accept or reject the ultimate trade agreement and not pick it apart with amendments that would send the two sides back to the negotiating table.

The same authority would cover a separate round of ongoing trade talks with 106 other countries, in which the goal is to lower trade barriers worldwide. Those talks, known as the Uruguay Round, have been under way since 1986 under fast-track authority that will expire June 1.

Under such intense pressure, many lawmakers are waiting until the last minute to announce what they will do.

One Democratic congressman said he agonized before coming to the conclusion that protecting U.S. industries from competition ultimately will cost American jobs, not save them. He knows that his decision will outrage his long-time supporters in organized labor--an important part of his political base.

“Fundamentally, labor’s analysis of this is wrong,” he said. “This is not the way to strengthen the U.S. economy. Their view is too narrow.”

House Majority Leader Richard A. Gephardt (D-Mo.) tried to steer a middle course Thursday by announcing that he would vote to grant the fast-track authority. But if he does not like what he sees in the ultimate package, he will take advantage of a loophole in House rules and go back on the promise not to generate amendments.

Gephardt called it a “trust-but-verify” trade policy. “If the Administration sends to this Congress a trade treaty that trades away American jobs or tolerates pollution of the environment or abuse of workers, we can and we will amend it or reject it,” he said.

The decision is particularly difficult for lawmakers from regions where some groups of voters view trade as the biggest threat but others view it as the most promising hope for prosperity.

In the 14 years that Rep. Donald Pease (D-Ohio) has been in Congress, he has seen thousands of his middle-class constituents lose their high-paying jobs as factories have moved to the Sun Belt to take advantage of wages that are only half as high as in Ohio.

In his view, things could only get worse if the United States drops all its trade barriers with Mexico, extending to Ohio companies what Pease believes is an invitation to set up shop where workers make only one-seventh as much.

At the same time, however, he does not want to miss the opportunity to open up new markets around the world to the companies that have remained in Ohio. They include firms such as Ciba-Corning Diagnostics Corp., which employs 341 people in Pease’s district and sells other countries as much as 60% of the medical equipment it produces.

“My great concern about the Mexico free-trade agreement derives from my unhappiness about what has been happening to the American middle class over the past decade. . . . I do believe in free trade, and I think that over a period of years the Uruguay Round will provide increased opportunities for the United States,” Pease says.

He is urging the House leadership to allow separate votes on the two sets of trade negotiations, but failing that, he says: “I’d be inclined to vote against them both, with real regret as far as the Uruguay Round is concerned.”

Times staff writer Holly Hacker contributed to this article.