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Fox lends support to Canada over NAFTA

Mexican President also calls for energy policy as he tours Alberta and B.C.

By PATRICK BRETHOUR

Friday, September 30, 2005 Page A8

CALGARY -- Mexican President Vicente Fox says he supports Canada's stand that the trade panels aimed at settling NAFTA disputes should be bolstered, lending at least moral support to this country in the clash over softwood lumber.

"We agree with Canada that we should strengthen all these mechanisms in NAFTA," said Mr. Fox, who is touring Alberta and British Columbia yesterday and today.

The North American Free Trade Agreement is the only such pact in which the U.S. government has agreed to allow independent panels to evaluate the application of its trade laws.

The panel system has failed to resolve the four-year-old wrangle over softwood lumber because the U.S. government has ignored rulings that should end the fight -- and return billions in punitive duties.

Prime Minister Paul Martin first voiced the need to strengthen NAFTA's dispute-resolution mechanisms a few weeks after the June, 2004 election, calling for a "court of final appeal" for trade disagreements.

Yesterday, Mr. Fox said the amount of trade between Canada, the United States and Mexico means it is vital to strengthen NAFTA. But it would be doing so in the face of an increasingly protectionist U.S. Congress, which barely passed the Central American Free Trade Agreement this summer, even after the powerful U.S. sugar lobby was largely exempted from that pact.

However, the Mexican President said he is still hopeful that NAFTA can be strengthened, as he called for a continental energy policy. Mexico's own energy sector is still largely in the hands of its national oil company, Petroleos Mexicanos, and the country's constitution bars foreign ownership or control of energy resources.

But Mr. Fox stressed that there are ample investment opportunities in his country's energy sector, adding that he is still aiming to liberalize both that sector and other parts of the Mexican economy.