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THE WORLD

THE WORLD; Latin America Finds Harmony in Convergence

THE WORLD; Latin America Finds Harmony in Convergence
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November 21, 1993, Section 4, Page 5Buy Reprints
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ON the face of it, the North American Free Trade Agreement approved by the House of Representatives last week after a long and acrimonious debate is a document narrow in scope, affecting only commercial relations with Mexico and Canada. But its passage was greeted with relief and excitement throughout Latin America and the Caribbean, where there is similar movement toward a closer relationship with the United States -- movement that would likely have been derailed had the trade pact been rejected.

Just a decade ago, it would have been difficult to imagine Latin American leaders, with Mexico in the lead, clamoring for closer economic, political and cultural ties with the Colossus of the North, their historical nemesis. But a new breed of pragmatic reformer has emerged in country after country in recent years to put into practice the twin virtues of democracy and open markets that Washington had long been preaching. To them, Nafta was a test of both the sincerity and reliability of the United States.

Thus there was alarm throughout the region when it seemed that Congress might hesitate, and jubilation when the Clinton Administration triumphed. "This was not a handshake at arm's length," said Mark Rosenberg, director of the Latin American and Caribbean Center at Florida International University here. "This was an embrace, and Latin America knows it."

In ways both symbolic and practical, Nafta therefore consolidates the profound changes in attitude and approach that have already occurred in Latin America, and creates new opportunities for convergence with the United States. Enrique Iglesias, president of the Inter-American Development Bank, a Washington-based organization that last year alone lent $6 billion for projects like roads, sanitation and small businesses, said he regards Nafta as the most significant American initiative toward Latin America in his lifetime -- far more important, he said, than Franklin Roosevelt's Good Neighbor policy or John Kennedy's Alliance for Progress.

"For us, Nafta means we really count for the first time," Mr. Iglesias, a former foreign minister of Uruguay, said after watching the debate and vote from the gallery of the House Wednesday night. "In a world of uncertainties, it is reassuring to leaders of the region to know that we can bet on the friendship of the United States. We now become partners in a joint venture, and that gives us an anchor for the economic reform process."

But Hernando de Soto, a Peruvian who is the author of "The Other Path," a best-seller throughout Latin America that has become the bible of economic reformers, predicted that "the political consequences of Nafta will be even more interesting than the economic ones, at least in the short term." In the same way that Spaniards became Europeanized by joining the European Community after decades of authoritarian rule, he said, "the virtues of a modern society" now have a chance to prevail in Latin American nations that long struggled under the twin burdens of military rule and economic policies that enriched only the elite.

It was the collapse of that system under a mountain of debt in the early 1980's that led to what Latin Americans call the Lost Decade, 10 years of economic stagnation, declining wages and net outflows of capital that made the poor poorer and destroyed the middle class. More out of desperation than confidence, newly enfranchised voters throughout the region turned to young civilian leaders who prescribed austerity and argued that the United States, though a contributor to the region's problems, could also be part of a solution.

Now, with Nafta in place and ideological tensions diminished, those polished technocrats can see light at the end of the tunnel and the possibility of resurrecting a consumer-minded middle class. As Gonzalo Sanchez de Lozada, the President of Bolivia, phrased it in a plea on behalf of the pact to Congress a week before the vote, the world's largest trading bloc "will be like a sun, and the rest of our economies will be like planets in orbit around it," basking in its glow and stimulated to remove barriers among themselves.

Mr. Sanchez de Lozada recognizes that for the time being, Mexico will enjoy an advantage over other Latin American countries and is likely to attract the lion's share of American investment and attention. But "as we achieve certain standards and certain levels of growth and maturity and in our economies," he also said, his and other countries eventually will also gain "access to this wonderful system of free trade, standardization of democratic practices, labor laws and environmental sensitivity."

Having spent so much political capital getting Congress to approve free trade with Mexico, Mr. Clinton may not be inclined to move quickly on requests from Chile and Argentina, the most likely candidates to follow in Mexico's steps, during his first term. But at the very least, the embrace of Mexico encourages reformers throughout Latin America to continue, if not accelerate, efforts to open up and modernize their societies.

That shot in the arm is especially important in the dozen countries with presidential elections scheduled over the next year, beginning with Honduras later this month and ending with Brazil next fall. "These changes do not get unanimity," Mr. Iglesias observed. "There are debates all over, and that is why with this sort of opening by the United States, reformism gets a boost. It shows there is life after the sacrifices we are making now." Cultural Momentum

But even as that political debate goes on, the momentum toward integration builds, thanks in large part to advances in communications and transportation. MTV, CNN, HBO, and ESPN, all now available in Spanish, are avidly consumed from Monterrey to Mendoza, and faxes and electronic mail have also reduced the distance between North and South America. The traffic flows in both directions, with visitors from Caracas or Buenos Aires increasingly coming to Miami, Houston and Los Angeles to shop, open businesses, buy real estate, keep doctors' appointments or just attend a baseball game.

In such a world, absolute sovereignty becomes impossible and interdependence seems the order of the day. No wonder, then, that Puerto Rico, which last week voted narrowly to remain an autonomous commonwealth tied to the United States rather than seek statehood, feels less defensive about its status and is even offering itself as a model for relations between the two Americas. "Other Latin American countries are seeking to break down the barriers of sovereignty and enter into an economic association with the United States," Rafael Luis Morales, a 35-year-old teacher in the mountain town of Aibonito, said proudly last month. "But we Puerto Ricans already have that, and it has done wonders for us."

Of course, if the shift to open markets does not deliver improvements in living standards, or if the United States to move forward, Latin America might be tempted to flirt again with populist authoritarianism. But, Mr. de Soto said, "a cultural barrier of sorts has been broken" on both sides with Nafta and it would be hard to return to the patterns of the past. "Having broken through the mental barrier, steps toward full integration now come much more naturally. All of a sudden, it's not that big a problem, gringos and Latinos getting together."

A version of this article appears in print on  , Section 4, Page 5 of the National edition with the headline: THE WORLD; Latin America Finds Harmony in Convergence. Order Reprints | Today’s Paper | Subscribe

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