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Mexican President Agrees to Seek Free-Trade Pact With U.S.

May 23, 1990

MEXICO CITY (AP) _ President Carlos Salinas de Gortari accepted Senate recommendations Tuesday to seek a free-trade agreement with the United States, but economists and advisers said such a pact isn’t likely to occur soon.

The U.S.-Canada free-trade initiative, proposed in 1985 and begun in January, wasn’t signed into law until last year.

″The recommendations will be the framework in which ... my administration will carry on Mexico’s trade negotiations,″ Salinas told 55 senators at the presidential residence.

Meanwhile in Washington, President Bush told a U.S. business group interested in promoting Latin American trade, ″We in the U.S. must do all we can to ensure the future of free markets in the Americas because our nation has a stake in the economic health of this hemisphere.″

Mexican Commerce Department adviser Jaime Zabludovsky denied reports that a partial free-trade agreement would be signed when Salinas and Bush meet June 10-12.

Salinas said he would study Senate recommendations with an eye toward integrating Mexico, which has about 85 million residents, in the changing economic world.

″Mexico will not be left out of the new world configuration. The speed of the changes requires decisive answers on all fronts, in all markets,″ he said.

The Senate recommendations also advise Salinas to take advantage of Mexico’s strategic location next to the United States to expand trade with Pacific rim countries and Europe.

″We have given the president a broad mandate in all foreign trade relations,″ said Senate Foreign Relations Committee chairwoman Blanca Esponda.

The 64-member Senate is the only authority that must approve presidential agreements with foreign countries.

Its recommendations were based on trade strategies proposed by academics, entrepreneurs and politicians, sponsored by the Senate at Salinas’ request.

″The majority of the participants said that one of the main advantages of free trade agreement between Mexico and the United States, would be a greater flow of foreign investment to Mexico due to the unbridled access to the U.S. market that Mexico would have,″ Senate president Maximiliano Silerio Esparza said in reading its recommendations to Salinas.

The recommendations were based on hopes of permanent access to the U.S. market and lowering U.S. trade barriers on agricultural, textile and cement products, Silerio Esparza said.

He said the recommendations include a transition period to let Mexican industry change to survive an onslaught of American goods onto the Mexican domestic market.

Until recently high Mexican tariffs kept out many American goods or made them more expensive than similar Mexican products. Because of a lack of foreign competitition, the prices of Mexican products were in some cases artificially high.

Mexican industry began feeling the pressure from lower-priced imports after Mexico joined the General Agreement on Tariffs and Trade in 1988.

Silerio Esparza noted some participants in the trade strategy forums opposed closer commercial ties with the United States on the grounds they would promote dependence, a topic of particular concern in Mexico.

Salinas agreed to Senate recommendations that Mexico stop short of seeking an economic union with the United States of the type planned by Europe for 1992.

He said such union ″is not compatible with the national objectives of sovereignty that we will always defend.″

In campaign speeches leading up to July 1988 presidential elections Salinas opposed a free-trade agreement with the United States. But the U.S.-Canada agreement and the pending European plan have posed new threats of competition to Mexico’s export market.