American free trade treaty imminent

AFTER months of roller-coaster negotiations and the threat of a hostile Ross Perot presidency, a free trade agreement linking the three economies of North America is expected to be announced by the end of the week, if not today, officials close to the talks said.

An announcement has been imminent for two weeks, since negotiators for the United States, Canada and Mexico sat down at a conference table at Washington's Watergate Hotel for a final bargaining session. But last-ditch efforts to preserve protection for influential domestic industries - oil in Mexico, cars in the US, beer in Canada - have managed to delay conclusion of an agreement, which will face political ratification in all three countries.

The deal, which would replace the 1988 free-trade agreement between the US and Canada, would create the world's richest and most populous customs union, giving poorer Mexico access to new technology, capital and markets, while providing US and Canadian firms with cheaper labour and a virgin interior market for their manufactured goods.

Issues such as the percentage of North American content in cars required under the pact have largely been settled, but questions remain over how such value would be measured.

The negotiations have been complicated on the one hand by the US presidential election campaign, which looked for a time like a three-way race involving Mr Perot, who opposed including Mexico in the pact. They have also been hampered by a trade war between Canada and the US in a number of sectors, notably brewing.