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Trade Watchers Say North American Agreement Could Be OK’d Today

August 7, 1992

WASHINGTON (AP) _ Negotiators hammering out a North American Free Trade Agreement appear to have reached consensus on issues ranging from avocados to textiles but remain stymied in two contentious areas: automobiles and tariffs.

American, Mexican and Canadian officials, who have been meeting since Sunday in a marathon round of talks, aren’t commenting publicly on the remaining stumbling blocks to a continental accord.

But trade watchers said Thursday that automobiles and tariffs appear to be the only areas of disagreement keeping the three nations apart.

Negotiators told Capitol Hill contacts Thursday that they planned to work late into the night in the hope of reaching a breakthrough today.

A White House ceremony to announce a handshake deal apparently was in the offing, a congressional source said, speaking on condition of anonymity. Administration staffers were calling private sector officials with ties to the talks, apparently coordinating security arrangements for a White House event, the source said.

″We are hopeful for tomorrow,″ Canadian government spokesman Yves Gagnon said Thursday. But, he added, ″Anything can happen. There is no sure end to this thing.″

A White House source, asking not to be identified, said an agreement was unlikely until next week. ″They are working very hard to reach a conclusion to the agreement and hope it will be soon,″ the source said.

Assistant U.S. Trade Representative Kathy Lydon held to her position that negotiators were making progress, ″but we still have no sense about when they might wrap it up.″

Autos appeared to be the most contentious issue remaining, said Gary Hufbauer, a trade expert with the Institute for International Economics, a research group based in Washington.

Mexico and Canada were at odds with the United States over the content requirement necessary in automobiles to qualify for duty-free treatment. U.S. negotiators wanted a content level of at least 60 percent North American-made parts, while Canada and Mexico favored a minimum of 50 percent or less.

The automotive industry ″is our biggest tri-country manufacturing sector,″ Hufbauer noted. ″The dollar numbers are just huge. We are talking of decisions that amount to tens and hundreds of millions of dollars.″

The trade agreement would create the world’s largest trade zone with a market of 360 million consumers and annual output of $6 trillion.

Even if a pact is concluded, Congress would not be expected to vote on it before next year under fast-track provisions.

″Fast track is not fast,″ Ms. Lydon said, detailing a series of steps that must be met before the president can initial an agreement and send it to Congress for ratification.

Fast-track calls for written reports to the administration and Congress from the 40 advisory committees involved in the talks. Teams of lawyers also must scrutinize the completed text to ensure there are no contradictions or clauses that were not agreed to earlier. The ″legal scrub″ could take a month to complete.

Under fast-track, Congress is allowed only to vote yes or no on a trade pact and cannot make any modifications.

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