The United States and Mexico should establish a closer economic relationship, particularly in an era when both countries need to attract more foreign investments, said a senior Mexican government official at an Institute of Politics forum yesterday.

Fernando Solana, the Mexican secretary of foreign affairs, spoke before an audience of about 200, including top University officials and the Mexican ambassadors to the U.S. and the United Nations.

Solana, a noted scholar of philosophy and politics, said that in the new era the U.S. and Mexico need to cooperate and establish free trade between the two countries, especially in light of the decline in U.S. dominance over the world market.

"The United States will continue to be a determinant factor and a center from which major decisions will emanate. But it will be so with less relative weight," he said, as a result of its "technological lag" and the increasing importance of the European Community and Japan.

A free-trade agreement would be productive for both nations, Solana said. Among its benefits would be the stimulation of the Mexican economy, a slowdown in the flow of Mexican workers across the border, more export from the U.S., and new markets for the U.S. service industries.

"Mexico's principal economic ties have been, are, and will continue to be with the United States of America" said Solana, speaking through an interpreter. "The demographic dimension of the two countries, the overwhelming evidence of their economic complementarity ...invite and force a new strategy of mutual respect and profound and efficacious cooperation."

Throughout the speech Solana repeatedly emphasized the significance of Mexico's sovereignty in its relationship with the United States.

"President Salinas de Gortari likes to insist that Mexico has decided to change, [but] to continue to be Mexico," said Solana, refering to the recent political liberalization in Mexico and to the rising tension in the relationship between the two neighboring countries.