By Julia Love and Anthony Esposito
MEXICO CITY, March 1 (Reuters) - NAFTA negotiators paved the way for closing the telecommunications portion of the trade deal this weekend, as the United States has dropped a proposal to enshrine measures targeting Mexican billionaire Carlos Slim'sAmerica Movil, sources said.
Telecommunications are due to be discussed in Mexico City on Saturday as part of talks to rework the 1994 North American FreeTrade Agreement, according to a schedule.
Although officials in Mexico are upbeat about the chances of an agreement, political considerations have in the past dragged out the process of announcing the conclusion of chapters.
Progress on the telecom chapter, viewed as an area of commonground in the tough negotiations, was stalled by a U.S. proposalto include Mexico's 2014 telecommunications reform in an annexthat would apply only to Mexico, Reuters reported. U.S. negotiators have signaled they will only seek toinclude general principles of the reform that would apply to allthree countries, said two sources with knowledge of the matter.
The new proposal allays Mexico's concerns considerably, saidSenator Gerardo Flores, who has been briefed on the matter.
Negotiations "have advanced a lot," he said. "There is anexpectation that they will close the chapter this round."
The reform aimed at loosening America Movil's grip on themarket was one of President Enrique Pena Nieto's signaturelegislative accomplishments. But Mexico balked at being singledout in the trilateral pact, and was concerned the annex wouldtie the hands of its telecommunications regulator.
Mexican officials saw the U.S. proposal as an attempt tofavor U.S. telecom giant AT&T (NYSE:T), which spent billions to enterMexico after the telecommunications reform was announced.
A spokeswoman for AT&T declined to comment. A spokesman forAmerica Movil did not respond to a request for comment.
A private sector trade expert close to the NAFTA talks saidthe U.S. team had agreed the revised accord did not need torefer to antitrust provisions against the dominant player inMexico under which America Movil faces tougher regulation.
In particular, the United States sought to codify in NAFTA ameasure agreed in the Mexican reform bill to bar America Movilfrom charging competitors for calls to its network.
However, Mexico abandoned the policy last year after thecountry's Supreme Court ruled that the regulator, notlegislators, should set so-called interconnection rates.
With roughly two-thirds of mobile users, America Movil'smarket share in Mexico is unparalleled in the NAFTA region.Canada's largest operator, Rogers Communications Inc RCIb.TO ,held about 33 percent of wireless subscriptions in the fourthquarter of 2017, excluding wholesale and mobile virtual networkoperators (MVNO) subscriptions, according to research firmStrategy Analytics.
In the United States, Verizon and AT&T held 33.9 percent and27 percent, respectively, of wireless subscriptions in thefourth quarter, excluding wholesale and MVNOs, according toStrategy Analytics.
NAFTA negotiators are now discussing including keyprinciples of the Mexican telecom reform that can be applied toall three nations, such as regulatory transparency andcompetitive conditions in the marketplace, Senator Flores said.