Magazine article SourceMex Economic News & Analysis on Mexico

Disagreements on Tariff-Reduction Timetable & Rules of Origin Stall Negotiations on Mexico-European Union Trade Accord

Magazine article SourceMex Economic News & Analysis on Mexico

Disagreements on Tariff-Reduction Timetable & Rules of Origin Stall Negotiations on Mexico-European Union Trade Accord

Article excerpt

Negotiations between the European Union (EU) and Mexico on a free-trade agreement have hit a snag because of major disagreements regarding a timetable for tariff reductions and the criteria to be used for rules of origin. The differences are wide enough to block the Mexican government's goal of completing an accord before President Ernesto Zedillo's visit to Brussels in October. But EU negotiators believe the two sides have enough common ground to complete an accord before the end of the year, and some EU leaders have asked Zedillo to postpone his trip to Brussels until November or December, when they hope to have the agreement completed. But the Zedillo administration's eagerness to complete an accord has been strongly criticized in Congress, particularly by the opposition parties. Sen. Jorge Calderon Salazar of the center-left Partido de la Revolucion Democratica (PRD) said a hasty conclusion of a free-trade accord with the EU would boost the standing of the governing Partido Revolucionario Institucional (PRI) during the upcoming presidential race in 2000. The differences regarding tariff reductions center on the timetable for Mexico to open its market to EU products. The EU is insisting that Mexico eliminate or reduce tariffs for 80% of EU products as soon as the accord goes into effect and then open its market to the remaining 20% by 2003. The Mexican government's counterproposal is to trigger market-opening mechanisms in four phases. Some EU products would receive immediate market access when the accord is implemented, but others would wait until 2003, 2005, and 2007 before gaining preferential treatment. The two sides were unable to resolve their differences on this issue at the seventh round of talks in Brussels in mid- July. EU representatives criticized their Mexican counterparts for failing to substantially improve their tariff proposal from one presented at the sixth round of talks in June. But the Mexican government is facing strong pressures at home to protect domestic manufacturers and agricultural producers. In recent weeks, representatives of various industries, including wine producers and toy manufacturers, have appealed to the Zedillo administration to maintain existing protections or seek greater access for their products to the EU.

Agriculture sector seeks greater access to EU market Mexican agricultural producers are also pressuring the government to seek a greater opening from the EU for Mexican produce. "Neither side has moved from its position since the second or third time we met," said Humberto Jasso Torres, director of agricultural and industrial negotiations for Mexico's Secretaria de Comercio y Fomento Industrial (SECOFI). Victor Celaya del Toro, research director for the Consejo Nacional Agropecuario (CNA), said the two sides have drafted a list of 360 agricultural products or categories of products to exclude from the negotiations. Mexico is seeking to protect its dairy, grain, and meat industries, while the EU has insisted on maintaining restrictions on 60 products, including tropical fruits and other items produced in its former colonies in the Caribbean. …

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