Mexico Expects to Enact Free-Trade Agreements with Israel & European Union This Year

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During February, the Mexican government concluded negotiations on a free-trade agreement with Israel and came a step closer to implementing its free-trade accord with the European Union. Both agreements are expected to take effect sometime this year.

The Mexican-Israeli accord, concluded in Mexico City in mid-February, will be signed by the leaders of the two countries during President Ernesto Zedillo's scheduled visit to Israel the first week of March. The agreement, Mexico's eighth free-trade accord, still needs Mexican and Israeli legislative approval. The two sides completed the groundwork for the negotiations in September 1997, but did not begin actual talks until April 1998 (see SourceMex, 1997-10-01).

The accord is expected to greatly boost Mexican-Israeli trade, which amounted to only US$155 million in 1998. In recent years, that trade relationship has benefited Israel, which held a surplus of US$119 million over Mexico in 1998.

Agriculture sector to benefit from Israel accord The Secretaria de Comercio y Fomento Industrial (SECOFI) said the accord with Israel will particularly benefit the Mexican agriculture and food sectors. Half of Mexican agricultural exports to Israel will gain immediate duty-free access, including sugar, concentrated orange and citrus juices, sesame seeds, and coffee. Israel is also planning to phase in reductions in duties for another one-fourth of Mexican agricultural exports to that country.

Other Mexican products that will gain duty-free access to Israel include tequila, mescal, beer, motor vehicles, steel, and certain chemicals.

The Mexican agriculture sector also stands to benefit from increased imports of Israeli agricultural technology and feed additives. Among the Israeli products that will gain immediate duty-free access to Mexico are irrigation equipment, greenhouses, and certain soy proteins in high demand by the Mexican agriculture and livestock industries.

Imports of Israeli high-technology medical equipment will also receive preferential treatment, as will certain agricultural products like kosher instant coffee and anise seed.

Under the accord, Mexico reserved the right to restrict imports of products that are strategic to the national economy, including petroleum, used clothing, pre-owned machinery, and automobiles, said SECOFI. Similarly, SECOFI said Mexico recognized Israel's right to reject meat products that were not prepared according to kosher standards.

SECOFI said the negotiation of the accord with Israel was a natural progression, since both countries will soon have common trade partners. Israel has accords with the US and Canada, Mexico's partners in the North American Free Trade Agreement (NAFTA). In addition, Mexico recently completed negotiations on a trade accord with the European Union (EU), which has an agreement with Israel.

EU foreign ministers approve Mexico agreement The Mexican agreement with the EU received another boost in mid-February, when the community's foreign ministers voted overwhelmingly to ratify the accord completed in November 1999 (see SourceMex, 1999-12-01). …