NORTH AMERICA FREE TRADE PACT FAR FROM FINISHED.

WASHINGTON, JULY 14 (IPS) – There is little hope that discussions between the Presidents of Mexico and the United States this week will help to advance the tricky negotiations on the North American Free Trade Agreement (NAFTA), which remains far from resolution, observers here said Tuesday.

Of the 22 chapters that make up the treaty, 12 are still unresolved, including issues concerning the automobile, petroleum and banking industries.

Nafta is at the core of discussions between U.S. President George Bush and Mexico's Carlos Salinas on Tuesday night.

The pact, to be signed by the United States, Mexico and Canada, will become the model for similar pacts to be signed between Washington and other Latin American nations within Bush's "Initiative for the Americas".

Bush's proposal envisions a free trade zone from northern tundra of Canada and Alaska all the way to Tierra del Fuego on the southern tip of South America. The initiative also calls for the reduction of regional nations' foreign debts with the United States and increased investments throughout the hemisphere.

However, two years after Bush first proposed the initiative, not one free trade pact has been signed between the United States and its hemispheric neighbours.

Moreover, the NAFTA negotiations are stalled and possibly doomed by election year politics. With the U.S. economy in a prolonged recession, NAFTA opponents claim the pact will take jobs, industries and investments away from the United States.

Trade experts cited by the "New York Times" said that Mexico has already agreed remove restrictions and allow foreign banks and insurance companies to begin operations in Mexico by the year 2000.

According to the sources, U.S. and Canadian companies will be allowed to own up to 8 percent of the banks and 10 percent of the insurance agencies in Mexico.

Stiff, other issues are much further from resolution. Mexico is especially protective of its lucrative petroleum industry, while the United States, with an ailing automobile industry, is hesitant to open its borders and markets to Mexican-produced cars.

Bush has pledged to sign the pact before the November presidential elections, but this would require the presentation of the final document for congressional approval by late July.