WASHINGTON — The United States and Mexico have begun quietly exploring the possibility of negotiating a sweeping free-trade agreement similar to the one that Washington signed with Canada in 1988, U.S. officials said Tuesday.
Completion of a broad-scale free-trade agreement could have major economic and social implications for both countries, paving the way for sharply increased trade and transfer of technology and expertise. Mexico needs U.S. investment and can supply inexpensive labor.
Both U.S. and Mexican officials warned that the consultations still are preliminary. The two governments will not formally decide whether to go ahead with a full-scale agreement until the initial studies have been completed.
"We really haven't gone very far down that road yet," White House Press Secretary Marlin Fitzwater said.
Nevertheless, other Administration officials said the groundwork could be completed in time for announcement of broader-scale negotiations during a visit to Washington, now planned for mid-June, by President Carlos Salinas de Gortari.
Although the exploratory talks initially were suggested by the Mexicans, U.S. officials said the Administration's willingness to go along reflects a personal desire on the part of President Bush to strengthen ties with Mexico and with Latin America in general.
During the 1988 presidential campaign, Bush called for elimination of trade barriers throughout the Northern Hemisphere. Washington already has signed a full-scale trade accord with Canada, negotiated in 1987 and 1988.
Officials on both sides had been keeping the new talks under wraps because of political sensitivity in Mexico, which traditionally has feared it would lose sovereignty--and be overwhelmed in economic and financial terms--by linking itself to the huge U.S. economy.
However, U.S. officials said that Salinas more recently has come to favor broader trade ties with the United States on grounds that they offer the best hope for spurring the soft Mexican economy.
Trade between Mexico and the United States has grown dramatically in recent years as Mexico has steadily opened its markets to more trade and foreign investment. A comprehensive free-trade agreement would open the way for further increases by eliminating trade barriers and creating the legal framework to protect foreign investment and guarantee that foreign businesses would be able to function in Mexico.
