Mexico Agrees to Resume Trade Negotiations with China to Endorse Membership in World Trade Organization

Article excerpt

Mexico moved one step closer to endorsing China's membership in the World Trade Organization (WTO) after President Vicente Fox agreed to resume trade negotiations with that country that have been stalled since the end of 2000.

Fox announced the Mexican government's decision during a trip to three Asian countries in early June that included stops in Beijing and Shanghai. Fox was in Shanghai to attend this year's meeting of the Asia-Pacific Economic Cooperation (APEC), which includes Mexico.

China has gained the endorsement of most WTO members in its bid to join the organization, but Mexico has declined to give its complete support until the two sides could agree on disputes regarding intellectual property, agriculture, and other matters.

The two countries had made some progress on these issues during discussions last year, but negotiations were suspended at the end of 2000 because of the change of administration in Mexico (see SourceMex, 2000-11-15).

China is also trying to convince Mexico to relax the stiff anti-dumping duties imposed on several Chinese products in 1994 and renewed in 2000 (see SourceMex, 1994-11-02, 2000- 04-05).

Economy Secretary Derbez to visit China in July

During his visit to Shanghai, Fox announced that Economy Secretary Luis Ernesto Derbez would meet with Chinese trade officials in late July to resume negotiations on a bilateral accord.

"This will only be a working visit to determine if we can put together some details for an eventual agreement," said Luis de la Calle, Mexico's deputy economy secretary in charge of trade negotiations.

De la Calle said Mexico has adopted a flexible position toward China, offering to drop its opposition to Chinese membership in the WTO even before a bilateral accord is concluded. "We have offered China flexibility," said the Mexican official. "If both sides show flexibility, then we can conclude the agreement."

Mexican officials said they view an agreement with China as an opportunity to expand commercial relations, which could help boost exports of agricultural, agroindustrial, electronic, cement, chemical, textile, and other products to that country.

But some trade experts said the stance of the Fox administration is somewhat optimistic.

"A trade agreement would increase exports of Chinese products to Mexico and expand an already wide trade deficit with that country," said Romer Alejandro Cornejo, a researcher at the Centro de Estudios de Asia y Africa, a unit of the Colegio de Mexico in Mexico City.

China's exports to Mexico totaled US$2.87 billion in 2000, while Mexican exports to China in the same year reached only US$203.5 million.

Cornejo suggested that the Fox government negotiate clauses that would encourage export of manufactured products rather than raw materials, which would help create jobs in Mexico.

Fox commits to negotiate trade agreement with Japan

Fox's trip to Asia also brought Mexico a step closer to negotiating a free-trade agreement with Japan.

During a meeting in Tokyo, Fox and Japanese Prime Minister Junichiro Koizumi pledged to begin negotiations on a free-trade agreement similar to accords Mexico has signed with other countries.

Economy Secretary Derbez was scheduled to meet with Japanese officials to begin discussions on an accord in July. The meeting will be coupled with Derbez's trip to China.

The negotiations are expected to build on the preliminary discussions between Japan and Mexico in early 2000 (see SourceMex, 2000-04-05).

"This will start a formal and serious negotiation," Fox told reporters after a meeting with Koizumi.

The renewed efforts to reach a Mexican-Japanese trade accord coincide with the explosive growth in trade between the two countries. Japanese exports to Mexico increased by 12% in 2000, totaling US$4.7 billion. Mexican exports to Japan in the same year grew by 37% to about US$2. …