Free Trade Accord Nears Completion : Negotiations: President Bush may announce a final agreement with Canada and Mexico this month.

U.S. negotiators are close to completing a sweeping free trade agreement that would remove financial barriers between America, Mexico and Canada, and President Bush is considering whether to announce a final pact this month, Administration sources said Wednesday.

Bush, who is expected to meet with Mexican President Carlos Salinas de Gortari at Major League Baseball’s All-Star game in San Diego on July 14, may use the occasion to announce completion of the North American free trade agreement, according to Administration officials.

The agreement would expand an existing U.S.-Canada trade pact, allowing the free flow of most goods, services and investments among the three countries. Bush has cited the accord as one of his major legislative priorities, although its completion in the midst of a presidential election year had seemed increasingly unlikely.

While some substantive issues in the trade talks have yet to be resolved, senior Administration officials and sources close to the Mexican negotiators said that the two sides have made remarkable progress in recent weeks, surprising many observers.

The United States and Mexico are now close enough on most points that the broad outlines of an agreement could be hammered out in time for Bush and Salinas to announce a deal this month, sources said.

Unveiling the agreement on July 14 would allow the President to divert attention from the Democratic National Convention, which begins the day before in New York. Canadian officials said Wednesday that they are unsure whether Canadian Prime Minister Brian Mulroney had been invited to the All-Star Game or whether he plans to attend.

“It is possible there will be enough progress that Bush and Salinas could get a handshake agreement” by mid-July, with technical details to come later, said one official.

Senior Administration officials noted that the ultimate decision on whether to cut a deal with the Mexicans in the middle of the presidential campaign will turn on politics, not economics.

While many Administration officials believe that a three-way trade agreement would enhance the President’s reelection prospects, others worry that the pact would hurt Bush and help independent candidate Ross Perot. The Texas billionaire, who has a reputation as a savvy business operator, contends that a free trade pact with Mexico could cause millions of Americans to lose their jobs while providing little economic benefit in return.

So far, Bush has not made a final determination on whether he wants to try to make the trade pact a key selling point in his campaign, Administration sources said.

Administration officials said that most senior staff members in the White House, Treasury and other Cabinet-level departments are urging Bush to announce a deal during the campaign. They see the agreement as a political plus that would showcase Bush’s leadership skills and demonstrate that his foreign policy experience can help the United States economically.

But Administration officials acknowledged that their counterparts in the Bush campaign organization are nervous about the political fallout that might follow an agreement with Mexico.

Even if Bush announces a deal with the Mexicans this summer, he is not expected to send a final trade pact to the Senate for ratification until next year, thus avoiding a bitter partisan debate in the Democratic-controlled Congress during the presidential campaign. In addition, if the Senate does ratify the agreement, it will be structured so that its main provisions will be phased in over many years.

Still, the rapid progress made in recent weeks by U.S. and Mexican trade negotiators has surprised observers, who are more accustomed to trade negotiations that seem to drag on endlessly.

The U.S.-Mexico deal, in contrast, is on the verge of being wrapped up after one year.

Key points still to be resolved include provisions covering such critical industries as autos and agriculture, as well as the shape of the environmental and health and safety standards to be integrated into the trade pact, sources said.