Bush Meets Salinas, Praises Mulroney

President-Elect Says Defense Secretary Still Not Picked

HOUSTON--President-elect George Bush promised yesterday to "never neglect our friends in this hemisphere" as he met incoming Mexican President Carlos Salinas de Gortari and heralded the election victory of Canadian Prime Minister Brian Mulroney as a triumph for free trade.

On a key domestic subject, the vice president also told Republican governors he would name negotiators for budget talks with Congress "on the first day of my presidency." But he also said he viewed his election as a mandate against new taxes.

He said he hasn't decided on a defense secretary, despite news reports he will name former Sen. John Tower (R-Tex.)

New Hampshire Gov. John Sununu, who will be Bush's chief-of-staff, told reporters the vice president still was "looking at a lot of people" for the post. A spokesperson for Tower said he was "on hold."

Bush and Salinas used upbeat language to describe their two-hour session at the Johnson Space Center in Texas. They gave few specifics in brief remarks afterward, but Bush aides said topics had included drugs, immigration, trade and Mexico's $102 billion international debt.

"I am absolutely confident after this initial visit, that we're both committed to improving a bilateral relationship that is essential, in my view, as far as the United States of America is concerned," Bush said.

Salinas called the session "a positive, respectful and cordial dialogue which I am certain will do a great deal to improve the relations between Mexico and the United States."

In Toronto, Mulroney, fresh from his victory on Monday, said he had spoken to Bush by telephone and was willing to meet with him before the U.S. leader's inauguration on January 20.

Accompanying the vice president were Treasury Secretary Nicholas Brady, whom Bush has announced will keep that job, and James A. Baker III, Bush's choice for secretary of state.

Addressing the Republican Governors Association in Point Clear, Ala., Bush said the U.S. relationship with Mexico "is very, very important. We must never take it for granted."

"As I look at the world, we must never neglect our friends in this hemisphere, in our own front yard," Bush said, mentioning both Mexico and Canada.

He told the governors' group the outcome of the Canadian elections was a "spectacular win" for Mulroney and an endorsement by Canadians of the free-trade pact negotiated by Mulroney and the Reagan administration.

"That indeed was a referendum on whether we're going to have more markets and freer trade, both ways," Bush said.

Mulroney's conservatives won the seats needed in the Canadian House of Commons to save the pact, which will phase out virtually all tariffs, quotas and other trade barriers between the two nations over 10 years.

The vice president, who has called for negotiating a similar free-trade deal with Mexico, phoned Mulroney from Alabama to congratulate him, according to spokesman Stephen Hart.

In his address to the GOP governors, Bush said that in addition to engaging in early deficit-reduction talks with Congress, he planned to convene a conference of all 50 governors to talk about education.

As for federal-state relations, Bush promised to "continue what Ronald Reagan and I began in 1980--to stop the flow of power to Washington and return it where it belongs, to the states."

Bush told reporters he had made no decision yet on his defense secretary, and he indicated there would be no announcement this week.