FREE TRADE: Mexico and Brussels sign agreement By Henry Tricks in Mexico City
Trade officials from the European Union and Mexico yesterday signed an outline free trade agreement, the first between Europe and a Latin American country.
The agreement, signed in Brussels by Herminio Blanco, Mexico's trade minister and Pascal Lamy, the EU trade commissioner, aims to bolster transatlantic commerce and investment and provide a counterweight to Mexico's increasing business ties with the US.
"At our level, that is the chief negotiators, we have reached an agreement on the terms of the free trade area between the EU and Mexico," said Mr Lamy. "At least in terms of coverage, it is the most comprehensive FTA (free trade agreement) ever negotiated by the EU."
The negotiations have advanced more quickly than expected since they began in November 1998. Mr Lamy said the agreement would have to be ratified by the 15 member states of the EU, as well as by Mexico's Senate.
Mexican officials have said they do not expect the agreement to take effect until mid-2000.
The two sides gave few immediate details on the contents of the agreement, though they said it included the gamut of trade in manufactured and agricultural goods and services, as well as rules of origin, public procurement and dispute settlement mechanisms. But they said there were still technical details to be finalised. "We have negotiated the whole package, what has to be done is technical, not points of substance," said Mr Lamy.
The accord was expected to give European countries virtual tariff parity with Mexico's partners in the North American Free Trade Agreement (Nafta), signed in 1994. Some 85 per cent of Mexico's trade is with the US. Europe, meanwhile, hopes an accord with Mexico will help ease access not only to Mexico's market of 100m consumers, but also to the US and Canada. "It is a truly historic step. We are opening a new relationship between the two countries," said Mr Blanco.
He noted that trade between Mexico and the EU had declined recently, which he hoped would be reversed by the agreement. Since 1994, the EU's share of trade with Mexico has dropped by half.
Details on the timetable of tariff reductions were not immediately available, though Mexican tariffs for industrial products from the EU would not be eliminated until 2007. Europe was expected to drop its tariffs by 2003. The latest round of negotiations had dragged on for two weeks in Brussels, partly, Mexican officials said, because of difficulties with Spain in the area of citrus fruits.