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JUDGE DERAILS FREE TRADE AGREEMENT A federal judge yesterday derailed the North American Free Trade Agreement with Mexico and Canada that President Clinton has insisted Congress approve by January. US District Judge Charles R. Richey ruled that the agreement negotiated last year by former President Bush and the president of Mexico and prime minister of Canada violates the National Environmental Policy Act. "NAFTA will have significant environmental effects and ... may worsen the environmental problems already existing in the United States-Mexico border area," the judge said in a 23-page ruling. He issued an order forbidding the Clinton administration from submitting the proposed pact to Congress until it first prepares a formal statement on its environmental impact, a process that could take several months or even years. US factory orders drop

Orders to United States factories fell 1.4 percent in May, marking the first decline for three straight months in more than two years, the government said yesterday. The Commerce Department said orders for both durable and non-durable goods totaled a seasonally adjusted $249.3 billion, down from $252.8 billion in April and the lowest since $244.0 billion last November.

It was the latest sign of weakness in the manufacturing sector since it began fading last winter after spurting ahead briefly at the end of 1992. Haiti talks progress

UN Special Envoy Dante Caputo yesterday reported progress in talks on restoring democracy to Haiti, despite the military ruler's insistence that many of his colleagues retain power in a civilian government."It was the most important meeting to date," Mr. Caputo said of his session Tuesday with Haiti's military ruler Lt. Gen. Raoul Cedras.

Meanwhile in Haiti, a little-known group calling itself "Liberty or Death" sent media outlets a "hit list" Tuesday with names of 80 journalists and supporters of ousted President Jean-Bertrand Aristide. Information Minister Andre Calixte scolded journalists for reporting on a Sunday police raid of a church. …