Italy Delays Official Start of Mexico-European Union Accord

SourceMex Economic News & Analysis on Mexico, July 19, 2000 | Go to article overview

Italy Delays Official Start of Mexico-European Union Accord


The Italian Parliament voted to ratify the Mexico- European Union (EU) free-trade agreement in mid-July, after delaying a vote for more than two weeks.

Using an administrative maneuver, Italian legislators set aside a final decision on the accord until after the July 2 Mexican presidential and congressional elections.

The agreement, scheduled to go into effect July 1, required ratification by the European Parliament, the Mexican Senate, and the legislatures of the 15 EU-member nations before it could become official.

All those legislative bodies except the Italian Parliament approved the accord before its start-up date. The Italian Parliament was especially vocal during negotiations on the Mexico-EU accord about ensuring that the agreement became a tool to protect human rights and promote democracy in Mexico. In particular, the Italian legislators criticized President Ernesto Zedillo's actions against supporters of the Ejercito Zapatista de Liberacion Nacional (EZLN) in Chiapas (see SourceMex, 1998-01-28).

The maneuver to delay a ratification vote until after the Mexican election angered the Mexican government. Mario Moya Palencia, Mexican Ambassador to Italy, called the move unfair because the Mexican government no longer had control of the organization and tabulation of the elections. "This is equivalent to placing judgement on the independent Instituto Federal Electoral even before the election took place," Moya Palencia told reporters in late June.

The Italian Parliament's action to delay ratification became a moot point after Mexican and international observers declared the July 2 election fair and essentially fraud-free. In the election, opposition candidate Vicente Fox Quesada of the center-right Partido Accion Nacional (PAN) defeated Francisco Labastida of the governing Partido Revolucionario Institucional (PRI) by almost six percentage points (see SourceMex, 2000-07-05).

On July 18, the Italian Parliament ratified the Mexico-EU accord by a vote of 435 to 19. Deputy Stefano Morselli said Italian legislators wanted to send a signal to the government of president-elect Fox that they approve of his plans to employ "economic policies with social orientation."

Still, Italy's ratification of the Mexico-EU accord was viewed as a formality, since the tariff reductions approved by the two sides in November 1999 went into effect as scheduled on July 1.

The tariff reductions cover 90% of all goods and services traded between the two markets (see SourceMex, 1999-12-01).

As of July 1, the EU eliminated tariffs on 82% of the products from Mexico included on the list. Tariffs on the remaining 18% will be phased out gradually.

Mexico, in turn, agreed to eliminate tariffs on 47% of manufacturing imports from the EU as of July 1, with the remaining products phased out by 2007.

Accord to boost European investment in Mexico

Several Mexican business chambers are looking forward to the full implementation of the Mexico-EU accord, which is expected to attract much-needed capital to the steel sector and other industries.

In an interview in late June, Alejadro Elizondo Barragan, president of the Camara Nacional de la Industria del Hierro y del Acero (CANACERO), said the accord will promote an increasing number of partnerships between European and Mexican steel companies. …

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