White House Considers Adding Escape Hatch to NAFTA : Trade: Proposal lets U.S. pull out of the pact if more jobs are lost than are gained. It could win votes in Congress, but it could anger Canada and Mexico.

WASHINGTON — In an apparent effort to win critical congressional support for the North American Free Trade Agreement, the White House said Friday that it would not rule out supporting a proposal under which the United States could back out of the pact if it ends up costing the nation more jobs than it creates.

Proponents said they hope that such a proposal, which is being floated among Democrats and Republicans in Congress, would ease the fears of House members whose skepticism about the three-way trade pact with Mexico and Canada is based on concerns that it will transfer jobs from the United States to Mexico.

U.S. Trade Representative Mickey Kantor told reporters that the Clinton Administration is “not at all” ruling out such a proposal, although the details have not yet been worked out and the Administration has taken no position on it.

On a related topic, President Clinton appeared to put the final stake through an already seemingly dead plan to increase a travelers’ tax from $5 to $10 to make up for the tariff revenue that would be lost if the trade agreement is implemented. The tax is charged to passengers entering the United States by air or sea.

“We’re looking for some other options to do it,” Clinton said to reporters.

Under the law intended to reduce the federal budget deficit, any loss in revenue must be countered with an increase in taxes or fees, or a cut in spending.

The Administration has predicted that $1.7 billion to $2.5 billion would be lost when the agreement eliminates tariffs on trade with Mexico and Canada.

U.S. officials predict the agreement will lead to increased income and employment, and that is expected to add an additional $10 billion in tax revenues to the Treasury. But budget rules do not allow the anticipated income to be counted against the loss.

In recent months, several proposals have been made regarding conditions under which the United States could back out from the agreement.

Under one, the pact would end if Mexico fails to raise its minimum wage in tandem with any increase of productivity; under another, the United States would withdraw if Mexico fails to become a full-fledged democracy.

Kantor said that neither Mexico nor Canada “would be particularly concerned” by the job proposal because they believe the agreement would benefit all three nations.

But others said that any of the proposals to allow an easy exit from the terms of the agreement would be likely to prompt an outcry in Mexico and Canada, because it would suggest that the United States was entering the agreement already prepared to pull out.

As it stands, NAFTA permits the United States, Mexico or Canada to withdraw from the agreement with six months’ notice.

For the Administration to give its full backing to any plan under which it could withdraw from the pact if it were costing U.S. jobs “would be a last-minute desperation thing,” said an aide to a senator involved in the campaign to win the required congressional approval.

The Administration has counted the votes of those ready to vote for the agreement or leaning toward voting for it and reportedly finds itself about 50 votes short of the needed 218 in the House. Other counts put the deficit at 90 to 100 votes.

A vote in the House is planned for Nov. 17. The Senate, where there is less opposition to the pact, would vote later.

Kantor spoke to reporters in a conference call intended to counter criticism, offered by Japan’s deputy planning minister, Yasuo Tanabe, that the agreement would promote “sneaky protectionism” favoring U.S. auto makers over foreign companies.

“This is someone who is saying that he understands the power of this agreement and what it does for U.S. jobs and U.S. businesses in terms of competitiveness, and he doesn’t like it,” Kantor said.

Two House members leading the campaign for the agreement took a delegation of largely undecided colleagues to Mexico City on Friday. The group will also visit the Mexican border with Texas.

Also Friday, Texas billionaire Ross Perot’s political office made available excerpts from the latest 30-minute television broadcast he has prepared in his campaign to defeat the pact.

“With this Mexican trade agreement, the outflow of jobs from this country will become a hemorrhage,” Perot says. “No state, no city, no town in this country will be immune.”

Proponents of the agreement, however, counter that Perot’s assumptions of job loss are vastly overstated and that, instead, it would end up increasing overall employment in the United States, although jobs in particular industries or regions might be lost.