Aug. 17 (Bloomberg) -- Mexican President Felipe Calderon urged companies and lawmakers in his country and in Brazil to consider a free-trade agreement between the two countries.

Mexico, which sells about 80 percent of its exports to the U.S., will strengthen trade relations with Brazil as part of an effort to speed up diversification of its trading partners, Calderon said during a visit to Brasilia. Officials from both countries will begin talks soon to increase investment and study a free-trade deal, Calderon’s press office said in a statement.

Mexico, Latin America’s second-largest economy, has been especially hurt by the global economic crisis because of its heavy dependence on trade with its northern neighbor, Calderon said. Gross domestic product will probably contract 6.9 percent this year, the most since 1932, a central bank survey of 32 economists in July showed.

“Depending economically on only one region is inadequate for any country,” Calderon said after meeting with Brazilian President Luiz Inacio Lula da Silva. “Such dependency explains why Mexico was so affected in this crisis.”

Mexico’s state-run oil monopoly Petroleos Mexicanos, known as Pemex, will also form a partnership with Brazil’s Petroleo Brasileiro SA, Calderon said yesterday. Collaboration between the two countries’ oil companies, including more scientific and technological cooperation, could turn around falling oil production at Pemex, Calderon said.

Calderon and Lula also agreed not to recognize the acting government in Honduras or any elections it oversees, according to Calderon’s press office. Deposed President Manuel Zelaya was removed from the country by the military on June 28.

To contact the reporter on this story: Jens Erik Gould in Mexico City at jgould9@bloomberg.net; Maria Rabello in Brasilia at mrabello@bloomberg.net

Last Updated: August 17, 2009 14:33 EDT