The sad spectacle of the U.S. political leadership's fruitless negotiations over the past several months -- or is it years now? -- to reduce the country's increasingly hard-to-finance budget deficit has prompted some observers to talk about the "Latinamericanization" of the U.S. economy. They refer, presumably, to Latin America's unhappy experience for almost a decade with huge external debt, large budget deficits fueled by too much spending and too few taxes, and closed economies protecting inefficient local industry. Indeed, this characterization of the U.S. economy seems uncomfortably apt.

However, at least one Latin American country stands out as a model of economic modernization, and the United States would do well to emulate its commitment to budget and tax reform. Mexico -- yes, Mexico -- has demonstrated greater courage, foresight and political will to tackle its economic problems than has its more powerful neighbor to the north. And it is now beginning to enjoy the fruits of those endeavors.

Obviously the countries are vastly different in terms of their economic power. Nevertheless, they share startlingly similar problems, which Mexico has done a better job of solving. After a long spending spree, Mexico's budget deficit soared to 18 percent of gross domestic product by 1982. Through a combination of gut-wrenching cuts in spending and far-reaching tax reform, Mexico's budget today is essentially in balance. Mexico delights in pointing out, accurately, that it has put into effect the equivalent of three Gramm-Rudmans. Would that our government could achieve even one.

The United States runs chronic trade deficits, and protectionist sentiment, especially in Congress, is strong. The most recent manifestation, coming on the heels of many others, is the textile bill. Though vetoed by the president, it reflects a political consensus in this country that certain sectors, both industrial and agricultural, still need to be protected. Compared with a decade ago, restraints on U.S. imports have doubled. At least 20 percent of U.S. imports are limited by some form of non-tariff barrier, thus not only depriving the consumer of cheaper imports but also subsidizing noncompetitive industry.

Mexico, on the other hand, has dramatically reduced import barriers, transforming itself from one of the most closed economies in the world to one of the most open. Non-oil exports have quadrupled, and Mexico has become a world-class producer of automobiles, automotive parts, televisions, computer chips and satellite and aircraft components.

Foreigners are losing confidence in our inability to solve our budget and trade problems. They are now investing considerably less in the United States, making it much more difficult for us to finance the world's largest national debt -- that is, our own. At the same time, sentiment in the United States, especially in Congress, is shortsightedly moving toward restricting foreign investment, just when we need it most.

Mexico, on the other hand, is moving head-long toward opening up to foreign capital. It has long dramatically liberalized foreign investment regulations, even permitting foreign capital into the heretofore sacrosanct petrochemical, telecommunications, steel and banking sectors. Crude-oil production and even electricity may well open up in the near future. In addition, billions of dollars of Mexican and foreign capital are flooding into Mexican treasury notes and into the Mexican stock market, one of the world's fastest-growing. As contrasted with the troubled American exchanges, the Mexican bourse grew by 94 percent in dollar terms in 1988, 68 percent in 1989 and 21 percent so far this year.

It should be kept in mind that while carrying out these far-reaching and painful reforms, Mexico never missed a payment on the debt owed to its external creditors. Global financial markets are finally recognizing the seriousness and irreversibility of Mexico's policies, and for the first time in almost a decade, the bond markets are voluntarily financing development projects there.

Without doubt, Mexico's strong presidency and relatively weak congress have made these dramatic reforms somewhat easier than they would be in a society like the United States', where a powerful Congress can and does stand up to the White House. But the explanation behind Mexico's success and the United States' failure lies less in the nature of their political systems than in the nature of their leadership.

President Carlos Salinas, against considerable odds, has stood up to those in his country, including those in his own party who wanted to keep Mexico from modernizing. While Mexico still has daunting problems, Salinas has gone much farther than the United States in correcting structural imbalances in the economy. President Bush and the leaders of Congress can learn a lesson from our neighbor to the south.

The writer, a deputy assistant secretary of state for Mexico from 1977 to 1979, is a consultant to U.S. and Japanese corporations and banks on Latin America.