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Key elements in NAFTA free trade pact

WASHINGTON, Aug. 12, 1992 (UPI) -- Following are the key elements of the North American Free Trade Agreement that the United States, Mexico and Canada completed Wednesday. The pact must be approved by Congress. --Approximately 65 percent of U.S. industrial and agricultural exports to Mexico will be eligible for duty-free treatment either immediately or within five years.

--U.S. autos and light trucks will have greater access to Mexico, which is the fastest growing major auto market in the world. Mexican tariffs on vehicles and trucks will be immediately cut in half. Within 5 years, duties on three-quarters of U.S. parts exports to Mexico will be eliminated, and local content requirements will be phased out over 10 years.

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--Mexico's closed financial services markets will be opened and U.S. banks and securities firms will be allowed to establish wholly owned subsidiaries. Transitional restrictions will be phased out by Jan. 1, 2000.

--Only vehicles with substantial North American parts and labor content will benefit from tariff cuts under NAFTA's strict rule of origin. NAFTA will require that autos contain 62.5 percent North American content, considerably more than the 50 percent required by the U.S.-Canada Free Trade Agreement.

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--The pact opens Mexico's $6 billion market for telecommunications equipment and services.

--Creates trilateral panels to resolve commercial disputes involving environmental standards.

--Barriers to trade, including quotas, on $250 million of U.S. exports of textiles and apparel to Mexico will be eliminated immediately, with another $700 million freed from restrictions within 6 years. All North American restrictions will be eliminated within 10 years.

--It immediately eliminates Mexico import licenses, which covered 25 percent of U.S. agricultural exports last year, and will phase out the remaining Mexican tariffs within 10 to 15 years.

--Firms with existing joint ventures will be permitted to obtain 100 percent ownership by 1996.

--Mexico's ''domestic content'' rules will be eliminated, permitting additional sourcing of U.S. inputs, and for the first time, U.S. firms operating in Mexico will receive the same treatment as Mexican-owned firms.

--Provisions for a higher level of protection for intellectual property rights than any other bilateral or multilateral agreement.

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