POLITICAL FORCAST : U.S.-Mexico Free Trade: Looking Down the Road : Trade: What will economic relations be like? Commerce between the nations will be freer, but the inflammatory issues will remain.

M exico and the United States are moving steadily toward an unprecedented free-trade agreement that seems likely to alter the relationship between the two countries. In five years, when the envisioned accord is in place, what should be the shape of U.S.-Mexico economic relations? The Times asked that question of three Americans and three Mexicans:

Richard E. Feinberg, executive vice president of the Overseas Development Council and a leading policy analyst on economic and Latin American issues:

There will definitely be a free-trade pact well before 1995. The effect altogether will be to convince Americans and Mexicans that the historic Mexican decision to integrate itself into the North American market is definitive and irreversible.

Traders and investors will come to see North America as a single market. On the downside, however, there is about a 20% chance that the Mexican political system will enter into a crisis that would, in turn, increase bilateral tensions.

In any event, there will still be a northward migratory flow, which will only be a serious problem if the U.S. economy is not healthy and is unable to absorb the influx.

Diego Asencio, retired U.S. Foreign Service officer and chairman of the Commission for the Study of International Migration and Cooperative Economic Development:

Despite the agreement and (Mexico’s) improving economic position, we know that the economic development process itself is destabilizing and, in the short term at least, it might even increase the amount of immigration to the United States.

We could also anticipate that there will continue to be a drug problem, as a sore point in relations. There will continue to be a problem with regard to the protection of the rights of migrants.

The negotiation of the agreement is going to be a four-alarm fire in itself. A lot of the questions that one could project into the future will be discussed.

I do consider the agreement, however, inevitable. It’s just such a clear and obvious benefit that, although there’s going to be resistance to it on both sides, I think its existence is inevitable.

Adolfo Aguilar Zinser, a political commentator and senior researcher at the new Center for the Study of the United States at the National Autonomous University of Mexico:

Mexico and the United States are again revising the terms of their endearment.

What is not clear is the realistic possibility that this agreement will reflect the feelings of both countries for the long term. The worst scenario is that we sign an agreement that will only reflect the immediate political interests of both administrations: of Carlos Salinas (de Gortari) in Mexico and of George Bush in the United States.

The questions in Mexico are related to the democratic transition that this country has to witness in the next five years. If Mexico does not become a more representative, open, tolerant, truly democratic and honest, clean political system, the kind of agreement Salinas might sign with the United States could be interpreted by large sectors of the Mexican population as a self-serving treaty that will only politically benefit Salinas.

The greatest challenge for the United States is to see Mexico not as a single-issue country, as a country just in terms of immigration, or in terms of drugs or in terms of certain trade agreements or in terms of energy, as is the tendency now with the Iraq-Kuwait conflict.

If American society sees this as an opportunity to extract concessions from Mexico because Mexico is weak and the government needs the agreement, then the deal might very well reflect the United States’ short-term interests but not the long-term interests of the relationship.

Wayne A. Cornelius, director of the Center for U.S.-Mexican Studies at UC San Diego:

A free-trade agreement would set the stage for a much greater integration of the two economies, but it will certainly not remove inflammatory issues like drug traffic and illegal immigration from the U.S.-Mexico agenda.

In fact, to the extent that a trade agreement improves economic conditions in Mexico, the short-term impact may be to stimulate migration to the United States by giving more Mexicans the means to finance migration, to stay in the United States for longer periods of time and to bring their dependents from Mexico. So economic integration will accelerate the integration of the two societies.

But most Americans prefer economic integration without any social residue. There is no evidence, for example, that the U.S. public is prepared to accept a level of immigration from Mexico--whether legal or illegal--that approximates what is likely to occur during the next six years, with the increased cultural diversity that it will bring. Moreover, the conventional wisdom in Washington is that there are too many unskilled, poorly educated people coming into the country, primarily from Mexico. This allegedly threatens our ability to compete with countries that do not rely on a large, low-skill labor pool.

The United States and Mexico already have a deeply institutionalized, transnational labor market. A free-trade agreement and recovery of Mexico’s economy will only underline that fact, and intensify the social and cultural objections to it in this country.

Jaime Zabludovsky, Mexican Ministry of Commerce and Industrial Promotion chief of staff for the free-trade agreement negotiations:

The challenge that we face is how to negotiate an agreement that will allow the two countries to take full advantage of the complementary natures of their two economies.

We are looking for a comprehensive global agreement on services, goods and investments. But it is also important to stress that there are some sectors of both economies that are sensitive and have to be subject to special treatment.

The Mexican government has already stated that those sectors that are, by constitutional prohibition, reserved to the state are not going to be on the table: oil drilling, basic petrochemicals, electricity, railroads, mail and telegraph.

With a trade agreement, Mexico is going to be able to provide jobs for its increasing population. The Mexican position is that one of the best ways to relieve the pressure of immigration is to provide jobs in Mexico. Mexico does not want to export jobs, we want to export goods.

Carlos Ramirez, journalist and author:

In 1995, Mexico is going to have to confront three very important problems. First, economic reactivation. We cannot continue in our present condition brought on by Salinas’ policy of (economic) stabilization.

Second, in 1995, Mexico will have finished the process of modernizing its economic and productive systems. All new economic opportunities will require reaccommodation on all levels, from businessmen to political parties.

Finally, a very important element that will influence events in 1995 is that we will be deciding on our next president. This president will take office in late 1996. But, beginning in 1995, the country will experience an internal tug-of-war between those presidential advisers who want to succeed Salinas.

In 1995, Mexico will undergo a crisis of expectations: Salaries, conditions and social welfare are deteriorating even though people have been promised that within a few years things will change.