Pollution from manufacturing plants in Canada and the U.S. is on the downswing, according to an annual report released yesterday by the Commission for Environmental Cooperation, set up to monitor the environmental effects of NAFTA. Industrial contaminants fell by 5 percent in Canada and 2 percent in the U.S. in 1996, compared to 1995, and the report estimates that the downward trend continued through 1998, with pollution falling 8 percent in Canada and 6 percent in the U.S., compared to 1997 levels. Texas tops the list of the worst polluting U.S. states and Canadian provinces, and Ontario comes second.