South Bay Officials Debate Merit of Trade Pact : Economy: Rep Jane harman says NAFTA would lead to the loss of manufacturing jobs. her stance has drawn fire from political and business leaders who support the proposal.

As a debate over the North American Free Trade Agreement looms in Washington, battle lines are forming in the South Bay.

Leading the opponents of the trade pact is Rep. Jane Harman (D-Marina del Rey), who contends that dropping barriers between the United States, Canada and Mexico will lead to a loss of highly skilled manufacturing jobs and will accelerate the flight of businesses to Mexico.

“In this environment, we cannot, we must not, take a chance on NAFTA,” she wrote in an editorial last week. “The risk is too great and the payoff far, far too small.”

But that stance has drawn fire from some business leaders and Rancho Palos Verdes Mayor Susan Brooks, who co-authored a study favoring NAFTA that won tentative approval from the Southern California Assn. of Governments.

“With or without NAFTA, jobs that are leaving Southern California are going to go anyway,” said Brooks, who wrote the report with Ventura County Supervisor John K. Flynn. “I keep hearing, ‘They’re closing up shop in the U.S. and opening up shop in Mexico. With NAFTA, they’ll go to Mexico, but they’ll keep the shop in the U.S. open.”

The free trade agreement would gradually lift trade barriers between the United States, Mexico and Canada, creating the world’s largest free-trade zone. It would include 370 million consumers and a combined annual economic output of $6.5 trillion, according to U.S. trade officials. If the trade pact wins Congressional approval this fall--a tough fight is expected--it will take effect in January.

The trade agreement could have a dramatic impact on the South Bay’s economy, which is tied to aerospace and other highly skilled manufacturing jobs, as well as employment related to the Port of Los Angeles and Los Angeles International Airport.

Harman is playing a risky political game by breaking from Clinton on the issue. Although she generally supports the president--she voted for his economic package--the freshman has said she will not always follow him, weighing each issue on its own merit.

“If you make the mistake of marching to the beat of the drummer without questioning what NAFTA can do, it can be electoral suicide,” said H. Eric Schockman, a political science professor at USC.

On Wednesday, Harman is scheduled to attend a rally at Fisherman’s Wharf in San Pedro, where she will be joined by representatives from environmental groups, labor unions and United We Stand, the political watchdog organization inspired by Ross Perot’s presidential bid last year.

Harman, in her editorial, based her opposition on the fear that the trade pact would result in the loss of manufacturing jobs. In the South Bay, manufacturing jobs fell from 119,362 in 1989 to 86,656 this year, according to a recent study by Stanley R. Hoffman Associates, a Los Angeles consulting firm.

The disparity in average hourly wages between the United States and Mexico--$14.83 versus $1.85--could cause job losses here as business seek cheaper labor, Harman said.

“With NAFTA, more companies will move to sell products in Mexico’s small consumer market, but also, more dangerously, to re-import products into the U.S. market,” she wrote.

Brooks, who said last week that she is weighing a run for Harman’s seat next year, labeled the argument of NAFTA opponents “short sighted.”

Economic studies have shown the the job gains in Southern California from NAFTA will range from about 30,000 to 75,000 in the first five years, Brooks said, disputing opponents who claim job gains would be significantly lower if any increase is seen at all.

Relaxed trade barriers will drive job growth, Brooks and others argue. As evidence, NAFTA supporters point to the large growth in exports from California to Mexico since 1986, when Mexico joined the General Agreement on Tariffs and Trade. Such exports grew from $2.3 billion in 1987 to $5.5 billion in 1991.

“There’s a . . . fear that all of the businesses will go to Mexico and all of the undocumented workers will come here,” said Jack Kyser, chief economist with the Los Angeles County Economic Development Corp. “But Mexico needs telecommunications and engineering skills for its infrastructure. That will play to our strength.”

In the South Bay, the Port of Los Angeles predicts NAFTA would prompt a dramatic jump in trade activity. Port officials expect trade volumes to mirror the growth that has occurred since 1987, when, under more liberal trade policies, exports rose 145%.

Port officials also expect another bonus: Because Mexico lacks port facilities as large and as sophisticated as the Port of Los Angeles to handle the anticipated expanded trade, more vessels will dock here. The goods they carry will be distributed to Mexico and, in turn, truck and rail traffic will increase.

But opponents dispute whether more jobs will come to the port.

“I don’t see how they are saying there are all these jobs being created (by the expansion of trade) when there is unemployment in the Port today,” said Rudy C. Montalvo, labor representative at the Los Angeles County Federation of Labor, AFL-CIO.

Harman and other opponents have also argued against NAFTA because of the disparity in environmental controls and workplace conditions between the United States and Mexico.

On Friday, the United States, Mexico and Canada made side deals aimed at resolving disputes over some of those issues. For example, any nation that doesn’t enforce its labor or environmental laws could face fines and an order to comply from a special tri-national council that would be created under the trade accord.

Harman could not be reached for comment on Friday, but other opponents remained skeptical in the face of the side agreements.

“They have no mechanism to enforce the rights of the working people and the environment,” Montalvo said. “They don’t have any teeth in it to safeguard our worker’s rights.”