MEXICO CITY — The United States and Mexico on Friday signed a trade agreement that sets up a new mechanism for resolving trade spats between the neighbors and calls for fresh discussions of more thorny issues.
U.S. Trade Representative Clayton K. Yeutter and Mexican Commerce Secretary Hector Hernandez signed the document in front of a group of prominent U.S. and Mexican officials and business executives.
"The document," Hernandez said, "satisfies the interests of the United States as well as Mexico.
"We want to point out that for us . . . (the agreement) establishes extremely important steps for arranging the commercial, investment and intellectual property relationship between the two countries."
Yeutter, speaking in Spanish, said that the measure offers the "possibility to create jobs in Mexico and . . . in the United States."
"What we have here is a foundation . . . for relations between the two countries in the future," he said. "We cannot resolve all the problems now with . . . this. That is impossible, but it is a first step, a very important step in this respect.
"If we can increase trade with this understanding, then it is worth the trouble for Mexico and the United States."
May Ask for Talks
The United States is Mexico's largest trading partner, while Mexico's trade with its northern neighbor ranks behind Canada, Japan and West Germany.
The United States runs a trade deficit with Mexico. U.S producers exported $12.4 billion worth of goods to Mexico last year and imported $17.6 billion from Mexico.
Under the agreement, either country may ask for consultations with the other country "on any matter concerning bilateral trade and investment relations, including trade and investment opportunities and problems."
It says discussions must be held within 30 days of the request, unless a later date is agreed on by the complaining party.
If a trade dispute is not resolved within 30 days of the first meeting, the agreement says, either country "may seek other means of settlement," such as seeking help through the General Agreement on Tariffs and Trade, the world's main multilateral trading system. Mexico last year joined GATT, becoming one of more than 90 countries to belong to the arrangement.
If a dispute over investment practices is not settled within 30 days of the first meeting, the agreement says, either country "may use other means consistent with its domestic law and international obligations."
The United States has a similar arrangement with Israel and one is contained in the sweeping free-trade agreement the United States and Canada recently negotiated. That proposal calls for elimination of all tariffs and most other trade barriers between the two neighboring countries by 1999.