The Mexican government wants the United States to jump-start negotiations for a U.S.-Mexico free-trade agreement, but the Bush administration is divided over whether the Mexicans are moving too quickly, administration officials say.
Sources said Mexico wants a U.S. endorsement for an early start for the talks to come from a summit meeting here in two weeks between President Bush and President Carlos Salinas de Gortari.
Salinas accepted a recommendation from the Mexican Senate Tuesday to seek an agreement that would create a free-trade zone of 335 million people stretching from the U.S.-Canada border to the northern tip of Central America. The United States already has a free-trade agreement with Canada, which could join in what would become a giant North American market.
A Mexican draft of a communique for the Bush-Salinas summit, circulating within the administration, calls for the two presidents to agree to start the trade talks, administration sources said Friday. Mexican Trade Minister Jaime Serra Puche is understood to have made the same point in a breakfast meeting here Wednesday with U.S. Trade Representative Carla A. Hills.
While Secretary of State James A. Baker III and Commerce Secretary Robert A. Mosbacher were reported to support Mexico's desire to put the trade pact on a fast track, Hills and Agriculture Secretary Clayton Yeutter, who as trade representative negotiated the Canadian agreement, favor a slower approach, administration sources said.
The differences surfaced during a meeting Thursday of the Cabinet-level Economic Policy Council on administration policy toward Latin America, according to well-informed sources.
A call to start trade talks would trigger a legal requirement in this country for congressional authorization to negotiate the agreement, which is expected to take years to conclude. The Canadian agreement, which is considered an easier deal than one with Mexico, took more than four years to conclude and ratify from the time Canadian Prime Minister Brian Mulroney called for it in March 1985.
Mexico, which had taken a go-slow position on a free-trade pact through most of last year, suddenly escalated its drive for an accord, which Salinas thinks will provide added investment funds and increased export sales.
Sources here and in Mexico said Salinas believes his country could reap major benefits from a free-trade agreement as a result of market-opening policies he had put in place.
Salinas also was reportedly concerned that Mexico would be standing alone if it does not forge tighter links with the United States at a time when Europe is forming its unified market, which is likely to include Eastern Europe, and Asia is edging toward becoming a trading bloc.
Baker and Mosbacher, both Texans with longtime ties to Mexico, were reported to feel that the United States should move quickly to accept the Salinas offer, noting that a pact would help the Mexican economy and solidify economic, political and strategic links between the two countries.
They also were reported to believe that moving on a free-trade pact could produce domestic political benefits for the Bush administration, gaining votes in the heavily Mexican-American states of California and Texas, aides said.
While supporting the broad idea of a free-trade agreement with Mexico, Hills and Yeutter are concerned that the administration has not properly prepared for the negotiations, aides said.
A trade agreement has strong support from major elements of U.S. business, which welcomes greater access to the large Mexican market and the possibility of shifting some labor-intensive manufacturing to low-wage plants. As an indication of business support, Salinas will be addressing the Business Roundtable during his visit here.
But organized labor, which fears that the pact will increase the inflow of cheap Mexican labor here and the movement of U.S. factories south of the border, is likely to oppose it, as will some industries, such as textiles and apparel, that would be hurt by a free-trade pact.
The United States is Mexico's largest trading partner and Mexico is the third largest export market for American companies, with $52 billion in goods passing between the two countries last year.