AT a televised town meeting in New Jersey during the campaign, and more recently in Detroit, when asked what he would do about the drug problem, Bill Clinton responded that he would go at it by focusing on drug money. The recognition that it is essential to pursue seriously the incredible profits from this illegal trade has been slow in coming. And the recent signing of the North American Free Trade Agreement makes it imperative that President Clinton take a fresh look at this nation’s policies to combat the laundering of drug money, through bank regulations or other measures — if he is serious about trying to control it. It is equally important that he lean on our new trade partners to be more energetic in enforcing anti-money-laundering laws.

Like most positive developments, the signing of the trade pact may have negative repercussions. One may be on the effort to halt the drug trade. Although not traded officially on financial markets, illegal drugs constitute one of the most profitable commodities in the world today. They are the main source of income for many economies. Both Mexico and Canada are involved — Canada mainly in money laundering, Mexico in drug trafficking.

All three participants of the trade pact signed the United Nations Anti-Drug Money Laundering Convention of 1988, but each country has a different way of carrying out measures to combat money laundering. An easier transfer of goods, people and money after ratification of the pact would introduce new problems for the American financial industry — namely, how to deal with the growing amounts of laundered money.

For many years after the “war on drugs” was begun by the Nixon Administration, law-enforcement officials thought it would be possible to control drug use by eradicating poppy fields and cocaine plants, intercepting large shipments and halting street distribution. Despite spectacular seizures and arrests, statistics on addiction kept soaring. The globalization of markets and the technological revolution that has overtaken the handling of money and credit have radically changed the way banks — and the traffickers — do business. In an effort to cope, toward the end of the Reagan Administration new laws were passed in the United States and, under Washington pressure, abroad. New rules and guidelines were intended to identify suspicious transactions and prevent drug money and other illegal funds from entering the banking system. Although these measures have met with some domestic success, they have resulted in vast sums moving to many other countries, including Mexico and Canada.

In response to money laundering — and the savings and loan crisis and other international banking scandals — Congress has been tightening banking regulations. Facing more scrutiny and tougher regulations, as well as capital flight, American banks have been lobbying for liberalization. The banking industry asserts that continued and increased restrictions will make it harder to compete with banks in Japan, Germany and the rest of Europe, especially since those countries are promoting financial deregulation.

IN fact, the drug trade flourishes by exploiting this nation’s economic and personal freedom. That is why the United States is the biggest drug market in the world. For traffickers, the necessity to hide the source of the money has led to ingenious laundering schemes. Canada has been especially hospitable to money launderers, who rely on an elaborate infrastructure within the international banking system itself, a network that includes bank accounts, trust companies, financial institutions, dummy corporations and other “fixers” along the way. The magnitude of the drug problem in Mexico — a combination of profits from trafficking and economic hardship — has created fertile ground for escalating crime, public apathy and corruption. The police, the courts, lawyers, mayors and the entire Mexican legal and political systems have been affected.

The need to control the flow of illegal money presents President Clinton with a dilemma regarding this nation’s partners in the trade pact. Before rushing to enact new laws and regulations, Congress and the new Administration need to examine the way current regulations are being carried out. Otherwise, instead of helping the economies of the three nations, the trade agreement could undermine them.