European Union & Mexico Create Special Council to Coordinate Negotiations on Free-Trade Agreement

Article excerpt

In mid-July, the European Union (EU) and Mexico announced the creation of special council to oversee negotiations on an EU-Mexico free-trade agreement. The council is required by an interim accord negotiated by EU and Mexican representatives in December 1997. The interim accord, which set the parameters for negotiation on a full agreement, commits the two sides to work toward "progressive and bilateral" reduction of tariffs (see SourceMex, 03/11/98 and 05/20/98).

The council will oversee the negotiations of working groups in 10 areas that will form part of the final agreement. Those areas include rules of origin, agriculture, dispute- resolution mechanisms, protection of intellectual property, market access, agriculture, and movement of capital and payments.

At a press conference announcing the creation of the joint council, Trade Secretary Herminio Blanco said the working groups are scheduled to begin meetings in September and October to define their goals.

Blanco said Mexican negotiators will seek an agreement that, among other things, will allow Mexico to diversify its export markets, foster increased direct foreign investment, and promote the transfer of technology to Mexico.

The EU and Mexico had announced their intention to negotiate a free-trade agreement in May 1995. But formal negotiations were delayed because of disagreements on agricultural trade, the timetable for tariff phaseout, and the EU's insistence that the accord include a clause committing Mexico to respect human rights (see SourceMex, 10/23/96).

In December 1997, the two sides finally reached an interim accord that set parameters for negotiation (see SourceMex, 12/17/98). In May 1998, the European Parliament overwhelmingly approved the accord, which set the stage for negotiations to begin (see SourceMex, 05/20/98).

Deputy trade secretary Jaime Zabludovsky Kuper, who will head the Mexican negotiating team, said he anticipates difficult and complex negotiations because the two sides must reconcile discrepancies in such areas as textile tariffs and automobiles.

Difficult negotiations anticipated on agriculture

In addition, negotiators will face difficulties reaching a compromise on agricultural trade. Groups like the Consejo Nacional Agropecuario (CNA) have urged President Ernesto Zedillo's administration to "exercise extreme caution" in negotiations with the EU.

In a meeting with Zabludovsky in late July, CNA president Ramon Iriarte urged the administration to take all steps necessary to protect domestic agricultural producers. In recent years, Mexico has imported grain, oilseeds, meat, and dairy products to supply the domestic market. Rather than allow the EU to export these products to Mexico at low tariffs, said Iriarte, the administration should promote self- sufficiency. …