Progress in EU-Mexico trade talks

Date: 10/06/1999

By Gareth Harding

FREE-TRADE talks between the EU and Mexico are steaming ahead after a slow start and are on course for completion by the end of the year, according to negotiators.

" Compared to previous experiences, these talks have moved quickly and efficiently," Mexico's Ambassador to the EU Jaime Zabludovsky, who helped ease his country's entry into the North American Free Trade Agreement (NAFTA), told European Voice.

But as the two sides prepare for the sixth round of talks next week, negotiators are steeling themselves for some hard bargaining over the speed of market opening.

Last month, Mexico improved its previous offer, promising to cut tariffs on industrial goods by 60% in 2003 and liberalise trade with the EU completely by 2007.

Whilst welcoming the move, European Commission officials want faster market-opening. "Our number one concern is to compete on equal terms with NAFTA," said one.

It seems unlikely, however, that Mexico will substantially improve its offer given the difficulties its industry had signing up to the package put forward last month. EU parity with NAFTA would mean the removal of all tariffs by 2003, a prospect which Mexico refuses to contemplate.

With the two sides edging towards a compromise on industrial goods, next week's talks are likely to focus on opening up trade in services, fisheries and agriculture. As these make up only a small share of trade, negotiators expect few problems.

Both sides favour liberalisation of fisheries and an opening up of the services sector after ten years. The only stumbling block remains the generous subsidies enjoyed by Europe's farmers. The Union promised to cancel export grants on some farm products last month, but Mexico is still concerned at the EU's high levels of price support.