International trade, a vital component of the Northwest economy, has come under fire from a seemingly unlikely source: environmentalists.

At issue is the recently concluded North American Free-Trade Agreement (NAFTA), between Canada, Mexico, and the United States. NAFTA would create the world's largest free-trade zone, encompassing over 360 million people and $6.2 trillion worth of goods and services a year.

The potential benefits are substantial. One recent economic analysis by the Institute for International Economics calculated that NAFTA's adoption would result in a net increase of about 175,000 jobs in the U.S. by 1995. The pact would also benefit Mexico

by further opening the wealthy U.S. market to their goods, creating jobs and prosperity. And Mexico would benefit as a trade agreement creates new opportunities for direct foreign investment and energizes its rapidly modernizing economy.

However, all is not rosy for the future of NAFTA. While both President Bush and Governor Clinton claim to support free trade, both are subject to election-year pressures. This has produced protectionist benefits for brewers, state-owned industries, auto producers, and bankers, among others. Environmentalists and traditional protectionists, "Baptists and Bootleggers" as their unholy alliance is called, have formed a powerful voice against NAFTA and gained a hearing with both Congress and trade negotiators.

Earlier this month the House of Representatives voted 362 to 0 in favor of a nonbinding resolution that calls for the trade accord to not jeopardize American health, safety, and environmental standards. Worries abound that Mexico will become a "pollution haven," spawning a multitude of dirty industries and encouraging U.S. companies to migrate to Mexico to avoid tough domestic environmental laws. However, the best available information suggests that NAFTA will foster both environmental safeguards and progress.

The Bush administration states that any trade agreement must "maintain the right to prohibit the entry of goods that do not meet U.S. health, safety, pesticide, food and drug and environmental regulations." The qualifications are (1) such regulations must apply equally to domestic and foreign producers (and therefore not constitute an unfair barrier to trade), and (2) they must have a scientific basis. A trilateral commission composed of trade experts, scientists, and environmentalists is being formed to hear challenges to the environmental rules of trading partners.

Much concern about the creation of "pollution havens" centers on Mexico and its lax enforcement of environmental laws. However, the World Bank finds little evidence that companies are willing to move manufacturing plants simply to avoid environmental regulations, as environmental costs form a small percentage of total costs. And it is likely that the increased foreign investment brought by free trade will bring with it advanced pollution control technologies. U.S. multinationals often hold foreign plants and subsidiaries to U.S. environmental standards.

Historically, Mexico's environment has been far dirtier than accepted U.S. standards. But that is changing because environmental knowledge, sensitivity, and managerial ability all increase with rising per capita income. These good things go together.

For Mexican President Salinas, environmental protection holds a high priority. He has privatized many inefficient and polluting state-owned industries, requiring them to meet tougher environmental standards to which they were not subject as state-owned companies. He has increased his environmental agency's budget from $4.3 million to $88.4 million in five years. Mexico has started to work with the U.S. EPA to clean up the highly polluted maquiladoras assembly plants and the rapidly growing "sister cities" of the border region. The two countries are planning to spend about $1 billion here over the next three years.

These steps will go a significant way toward protecting human health and the environment in Mexico. And it is important to note that the best way for the U.S. to ensure that Mexico continues this environmental progress is to support NAFTA.

This is because a free-trade agreement brings increased national prosperity - and it is prosperity that fuels demand for higher standards of environmental quality. Rich nations have cleaner environments than do poor nations. Recent research by Professor Donald Coursey of Washington University in St. Louis shows that across time and across countries per capita spending on the environment rises directly with income. Protected land acreage also rises with income, implying that more forest preserves and parks will be created as Mexico grows richer.

Delegates at June's Earth Summit in Rio noted that poverty is the chief threat to both the environment and human health. EPA Administrator William Reilly writes about NAFTA that "As the Mexican economy grows, so will its devotion to environmental protection and its ability to pay the costs of environmental stewardship." The lesson is that environmental quality and economic prosperity are strongly and positively linked. As a free country grows and rises out of subsistence living it becomes more, not less, environmentally friendly.

By increasing incomes and promoting economic growth in Mexico through a North American Free-Trade Agreement, the U.S. can increase Mexico's environmental awareness and ability to effectively steward its environmental resources. That is a relationship that should appeal to both environmentalists and free-traders alike.