Free-Trade Pact Talks Appear on Track, Mexican Side Says

TIMES STAFF WRITER

Negotiations toward a proposed North American free-trade agreement are proceeding "very satisfactorily," a senior Mexican official said Thursday, brushing aside questions about whether President Bush's disappointing showing in the New Hampshire primary will affect the talks.

After meetings in Dallas this week, negotiators expect to have a draft of the agreement ready for review by Bush and President Carlos Salinas de Gortari when the two meet next week in San Antonio, according to the official, who spoke on condition that he not be identified.

Canadian Prime Minister Brian Mulroney will not be in Texas but will be available for consultation by telephone.

The preliminary agreement can be expected to contain long transition periods for the dropping of trade barriers and subsidies affecting agricultural products. The official said U.S., Canadian and Mexican negotiators recognize the need for an adjustment period sufficient to allow growers to adapt to international competition.

Despite the promise of such lead time, observers here worry that the election-year recession may turn the free-trade agreement--which critics say could cost American workers jobs--into a political liability for Bush.

His conservative opponent, Patrick J. Buchanan, received 37% of the vote in New Hampshire's Republic primary on an "America First" platform, fueling speculation here that the White House will slow down trade negotiations for political reasons.

Mexican officials are taking pains to play down the possibility that U.S. politics could postpone--much less scuttle--the agreement, a cornerstone of Salinas' economic policy.

Asked whether the agreement is dependent on Bush's reelection, the Mexican official replied: "This is a negotiation among countries."

He said he isn't worried that failure to reach an agreement this year will slow the flow of foreign investment that has financed Mexico's mounting trade deficit.

"A free-trade agreement is a long-term instrument to reassure Mexican exporters and foreign investors that they will have a market for their goods," he said. "Thinking in the long term, it does not matter whether the agreement is signed one month or another."

Independent economists said the conservative 1992 Mexican budget--with a $5-billion surplus--is designed to cushion the economy against the shock of delays in completing the agreement.

But publicly, Mexican officials insist that the negotiations are on track.

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