President Reagan has abandoned for the moment a campaign promise to establish a North American trade pact, citing difference in economic philosophies and conditions among northern and southern trading partners.
In a report to Congress, Reagan said he is still seeking close cooperation among the United States, Canada and Mexico. But, he said, "North America's great disparities in levels of economic development, resources and economic philosophies make trade liberalization difficult. These differences preclude realistic expectations of a fully integrated regional trade compact in the short term."
When Reagan announced his candidacy for president on Nov. 11, 1979, one of the few new proposals he made was for a "North American Accord." The idea was vague then and has never been clarified.
"Improving trade relations with Mexico and Canada separately rather than on a regional basis seems appropriate at the present time," Reagan said later in his report, "On the other hand, a broad regional approach to expanding trade and investment relations with the Caribbean Basin countries appears to be an essential and feasible complement to bilateral arrangements."
Last month Secretary of State Alexander M. Haig Jr. and U.S. Trade Representative William E. Brock met with the foreign ministers of Mexico, Canada and Venezuela about the Caribbean Basin plan and agreed to consult with government officials of Central American and other countries. tThe proposal is intended to improve trade and other economic relations between the developed and less developed countries of the region.
As an example of improved trade relations with Mexico, Reagan said he has proposed an agreement which would call for each country to notify the other before taking trade actions that would affect the other.