WATCHING WASHINGTON SPEEDING A TREATY
If negotiators working on the broad U.S.-Mexico trade agreement can't reach agreement in a few weeks, they may get an additional 12 months they don't want.
The U.S., Mexico, and Canada are pushing to reach a North American Free Trade Agreement (FTA) before spring to keep it from getting ensnared in American election year politics.
That concern was behind President Bush's recent meeting at Camp David with Mexican President Carlos Salinas de Gortari.
They discussed major disagreements the FTA negotiations have raised so far and reasserted their commitment to reach a final agreement soon.
FAST TRACK COMING UP
Bush and Salinas ordered their negotiators to complete a preliminary draft by late January detailing the points of agreement and disagreement in 18 key trade areas.
Once negotiated, the FTA will enter a fast track process in Congress that will permit only an up or down vote on the treaty without possibility for amendments.
The two presidents want the FTA sent to Congress before presidential and congressional election campaigns begin heating up next summer.
Labor unions already claim the FTA will result in an export of U.S. jobs to Mexico. That prospect, right or wrong, presents a difficult vote for a congressman running for reelection during an economic recession. So it's not surprising that some congressmen think support for the FTA is weakening among their colleagues.
Salinas needs the FTA, or at least the promise of it in 1992, to help sustain Mexico's economic recovery program and attract foreign investment.
And a delay until 1993 would create problems for Canadian Prime Minister Brian Mulroney, who has to call parliamentary elections that year.
Energy is one of the toughest issues in the FTA negotiations.
Mexico steadfastly has insisted it won't repeal a constitutional ban on private ownership of oil and mineral resources. So U.S. negotiators are pushing hard to open trade in energy services and investments to the maximum.
Even though Mexico won't allow U.S. oil companies to own oil production, it needs their expertise and technology to develop reserves, particularly offshore, to their full potential.
And foreign equity investments could answer Mexico's need to upgrade refineries and chemical plants.
INDEPENDENTS' INTEREST
Although major oil companies may have the most at stake in the FTA talks, independents are concerned, too.
Denise Bode, Independent Petroleum Association of America president, said her group has met with Mexican officials and is monitoring the talks.
She said, "We felt that in the U.S.Canadian FTA, the energy industry became a player after the fact. We very much want to be a part of this process."
Copyright 1991 Oil & Gas Journal. All Rights Reserved.