Mexico favours Brazil trade pact

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Mexico's President Felipe Calderon has said he will propose a free trade agreement with Brazil.

"Trade enriches economies," said Mr Calderon during a meeting of business leaders in Sao Paulo.

The comments came as he embarked on a three day visit to Brazil, when he will meet President Luiz Inacio Lula da Silva and visit oil firm Petrobras.

Brazil and Mexico are Latin America's largest economies. Mexico already has trade deals with the US and Canada.

"I offer to put the idea [of a trade agreement] out there before different industries, and political and social groups," said Mr Calderon.

The two nations are responsible for around 70% of all economic activity in the region.

Mexico's economy has been hard hit by the recession and more recently by swine flu.

The US slowdown has meant less money is being sent home by migrant workers, and Mexican exports have fallen.

Mexico sends 80% of its exports to the US, so has been particularly exposed to the US fall in consumer spending.