
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: THURSDAY, June 28, 1990                   TAG: 9006280054
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A4   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Short

BUSH BACKS FREER TRADE, EASED DEBTS

President Bush on Wednesday offered to forgive a portion of $12 billion owed the government by Latin American and Caribbean countries and proposed a free trade zone for the entire Western Hemisphere.

In a major speech on U.S. policies, the president also proposed "debt-for-nature" swaps to encourage third-world countries to protect natural resources.

It marked the first time the administration had shown a willingness to write off a portion of the government debt - which would still leave the $48.3 billion Latin nations owe U.S. banks.

Treasury Secretary Nicholas Brady said $7 billion in low-interest loans among the $12 billion was eligible to be forgiven, but the process could take several years.

The debt forgiveness would be contingent on economic and investment reforms the debtor nations would work out with the International Monetary Fund and the World Bank.

Bush also recommended creation of environmental trusts into which loan interest payments on U.S. loans can be paid. The money would be used to finance environmental programs in the debtor countries, he said.

by CNB