'90 TRADE PACT TALKS WITH MEXICO UNLIKELY

'90 TRADE PACT TALKS WITH MEXICO UNLIKELY

The United States will not begin negotiating with Mexico on a free trade agreement in 1990 because of a crowded legislative calender, U.S. Trade Representative Carla Hills said Thursday.

Mexican President Carlos Salinas de Gortari announced on Wednesday that his country would seek to negotiate such pacts with both the United States and Canada. The Mexican Senate on Tuesday declared its support for such an accord.While Mrs. Hills supports enhancing trade and investment with Mexico, she said the U.S. government has not yet made a decision on a free trade pact. She also said the Mexicans have not yet formally asked President Bush to start such negotiations.

"There is not going to be any immediate negotiations," she said at a National Press Club luncheon.

Multilateral trade negotiations under way in the General Agreement on Tariffs and Trade are scheduled to conclude in December. At some point during the first six months of 1991, Congress must begin consideration of any agreement that emerges from those discussions. The deliberations figure to be time-consuming and contentious.

GATT is the Geneva-based organization that governs most world trade in goods.

Before any negotiations on a free trade deal with Mexico can be launched, Mrs. Hills would have to gain approval from the House Ways and Means and Senate Finance committees.

Those committees are allowed 60 legislative days to weigh the merits of such a deal, which may mean five or six months of calendar time.

"I would not necessarily say that (beginning negotiations with Mexico) is impossible, but I will say with our legislative framework that we are not about to commence one," she said.

Mrs. Hills said it would be difficult but not impossible for her staff to negotiate simultaneously with Mexico and with the 96 other GATT signatories on a final GATT agreement.

In answering questions following her speech, Mrs. Hills said the unification of Germany will improve the prospects for gaining an agreement on reducing trade distorting subsidies for agriculture.

The additional burden of supporting inefficient East German farmers will add to the already staggering costs of the European Community's common agricultural policy, she said, making farm subsidy reform an even more important budgetary consideration for Brussels.

"The cost of their (farm) structure is on our side . . . ," she said. ''Because Europeans understand they must get control over their costs and

because they do want reform in other areas like services and intellectual property, we have at least a decent chance of getting reform in agriculture."

EC officials, including Frans Andriessen, the community's commissioner for external relations, have said recently, however, that the United States must scale down its ambitious goal of drastically reducing both internal and export subsidies for farmers.

The administration has made reform of agriculture trade one of its top priorities in the current GATT talks, known as the Uruguay Round.

But Mrs. Hills said a study by the Organization for Economic Cooperation and Development has pegged the cost of the EC farm program at some $120 billion a year and that those costs "will skyrocket" when the two Germanys unify.

She refused to comment on which aspects of the 1990 U.S. farm bill - currently under deliberation in a congressional committee - may help or hinder the GATT talks.

These discussions should be conducted on separate tracks, she said.

Mrs. Hills suggested that too much time has been wasted in the GATT textile negotiations.