25 November 1999

Mexico and EU conclude free trade negotiations

The following article is excerpted from "The Journal of Commerce" of 24 November 1999.

Although the text of the agreement has yet to be hammered out, Mexico and the European Union announced Tuesday afternoon (23 November) the conclusion of trade negotiations.

'At our level we have reached an agreement,' said Pascal Lamy, commissioner responsible for trade with the European Commission. Significantly, few details were given by either side at the Tuesday news conference, although Mexican Commerce Secretary Herminio Blanco did say that a full opening of industrial goods trade is scheduled for 2007.

The schedule for agriculture is a full opening in 2010, with the exception of products that are excluded and separate list of products that will be reviewed at a later date.
Word of an agreement between Mexico and the EU has bearing for U.S. multinationals. Because the United States and Europe have been unable to move ahead on a Trans-Atlantic Free Trade Agreement, U.S. companies that manufacture in Mexico - providing they meet the local and regional content requirements of the pending accord - should be able to use the Mexico-EU deal as a springboard into Europe. However, there were no details provided about rules of origin and other complicated disciplines of trade agreements, nor how the trade pact differed from NAFTA.

The news conference announcing agreement on a ministerial level was delayed several hours as negotiators worked out final details. Both Mexican and European officials said that aside from ratification from both sides, the only missing piece of the negotiation was to rewrite the legal and technical text....

The rush to announce a conclusion to talks is believed to stem from time pressures to have something concrete before next week's meeting in Seattle to launch the so-called Millennium Round of global trade talks under the World Trade Organization.

Mexico hopes the agreement will help to lessen trade dependence on its North American Free Trade Agreement partners Canada and the United States. Total trade between Mexico and the European Union was $15.6 billion dollars, a fraction of the $200 billion between NAFTA partners. If all goes as planned well, Blanco said, the agreement should be implemented by July 1, 2000.