Splits threaten delays in EU-Mexico free trade talks

Date: 21/01/1999

By Gareth Harding

TALKS aimed at securing a free trade agreement between Mexico and the EU began in earnest this week, with basic differences between the two sides threatening to delay a deal until late next year.

Although both blocs favour opening up their markets, splits have already emerged over the rate of liberalisation.

The Union is pushing for trade in all industrial goods to be tariff-free by 2003 - the same year that such products have to be liberalised under the North American Free Trade Association (NAFTA) - whilst Mexico would prefer ten years.

Jaime Zabludovsky Kuper, Mexico's new ambassador to the Union, believes trade in agricultural products is also likely to be a “sensitive” issue, given the country's current trade deficit with the EU in this sector.

However, a European Commission official said agriculture was unlikely to be as large a stumbling bloc as it had been in ongoing talks with South Africa. “There is nothing insurmountable in this area,” he added.

Union calls for Mexico to open up its service sector are also likely to cause problems. The country already has an agreement covering the sector within NAFTA, but is reluctant to extend this to the EU. The problem is compounded by the fact that this is the first time the Union has attempted to negotiate a free-trade area in services with a country not aiming to join the 15 member bloc.

Officials were hoping to agree on a future timetable for market liberalisation during this week's talks, with future negotiating rounds due to focus on specific sectors.

However, a final agreement is likely to prove more elusive. Zabludovsky has warned that given the global nature of the planned accord, it could take up to two years to hammer out. And while Commission officials hope for “substantial progress” this year, they have also shied away from setting over-ambitious targets. “Past experience has shown that when you set unreasonable deadlines, they do more harm than good,” said one.

Both sides have an interest in a speedy opening up of their markets, however. Mexico is keen to diversify its trade, which is highly dependent on the US, whilst the EU is anxious to gain a greater share of the lucrative Mexican market.

Although trade between the two has grown by almost a half since the beginning of the decade, the Union's share has consistently fallen since the NAFTA agreement entered into force.

Meanwhile, European and Mexican aid groups have expressed concern at “grave human rights violations” in the country and are calling for measures to protect such rights to be included in any agreement.

Demanding greater involvement in the talks, the groups have stressed the importance of ensuring that “the priorities of civil society are not subordinated to those of free trade”.