CONGRESS LOOKING TO REBUKE MEXICO : DISPLAY OF DISSATISFACTION SHORT OF DRUG DECERTIFICATION SOUGHT.

Byline: Adam Clymer The New York Times

Bending to Clinton administration pressure, Congress began struggling Wednesday for a way to rebuke Mexico over its lapses in fighting drugs without disrupting the Mexican economy.

The White House warned Wednesday that President Clinton might veto a House bill that would overturn his finding that Mexico was ``fully cooperating'' with the United States in fighting cross-border drug trafficking. While decertifying Mexico, the measure, scheduled for a vote Thursday, would enable the president to waive the sanctions that would result from such a vote.

But there seemed little likelihood that Congress would approve such a bill, at least not soon. Committees in both houses were seeking milder expressions of unhappiness after administration officials and businessmen warned that revoking certification ran the risk of undermining foreign investors' confidence in Mexico's economic prospects.

Administration officials, including Treasury Secretary Robert Rubin, have warned that such a move could deal a blow to the Mexican economy comparable to the sudden devaluation of the peso two years ago, which led to a financial crisis that forced the administration to stitch together a bailout plan. Only in the past few months has Mexico repaid the last of the $12.5 billion in loans that the United States provided.

Officials also have said they fear that a congressional condemnation would lead to a political backlash in Mexico that would reduce, not increase, its efforts to combat the shipping of marijuana, heroin and cocaine into the United States.

The first congressional effort to find a milder way out of the certification quandary without appearing indifferent toward narcotics corruption in Mexico will be a House proposal that would leave the certification in place if Clinton, within 90 days, reports he had received ``reliable assurance of substantial progress'' toward a variety of drug war goals.

Such assurances would include commitments from the Mexican government to extradite Mexicans indicted for crimes, to allow U.S. drug agents to carry handguns in Mexico, and to develop a radar net to track drug transport planes.

The Clinton administration took no position on that proposal, put forward by House Republican leaders Wednesday, but House Democrats warned that it, too, might invite a veto. Lesser proposals being debated include a sense-of-Congress resolution that would urge both the United States and Mexican governments to make progress toward these and other goals.

The legal effect of revoking certification would be to bar foreign aid to Mexico, of which there is very little, and to require the United States to vote against loans to Mexico by international lending institutions.

Administration witnesses warned again Wednesday that grave results would follow from decertification.

Lawrence H. Summers, the deputy treasury secretary, told a Senate Foreign Relations subcommittee that the ``true damage would come from undercutting our support for those in Mexico committed to reform, and from undermining investor confidence in the close cooperation between our countries and in the strength of our American commitment to work with Mexico to advance reform.''

Gen. Barry McCaffrey, director of the White House office of National Drug Control Policy, told the senators that decertification ``would impair our ability to effect cooperative counterdrug efforts.''

He said that the current situation was ``extremely explosive'' and that the Mexican government already had been harshly criticized for ``excessive deference of their sovereignty to the United States.''

Their testimony seemed to have an impact, but left some senators plainly frustrated. Sen. Paul Coverdell, R-Ga., who heads the Western Hemisphere subcommittee, repeatedly told administration witnesses that while he did not want to inflame Mexican opinion, ``the status quo will not do.''

Other senators were blunter. Sen. Dianne Feinstein, D-Calif., said, ``I did not agree with anything that Mr. Summers said about how things could get worse.''

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Photo

PHOTO Sen. Dianne Feinstein, D-Calif., greets her colleagues on the Senate Foreign Relations Committee before Wednesday's hearing on Mexico.

Associated Press