EU-Mexico free-trade deal in sight

Date: 21/10/1999

By Gareth Harding

THE EU and Mexico are firmly on course to sign a free-trade deal by the end of this year after the latest round of talks made major progress towards removing the remaining obstacles to an accord.

“We are very close to an agreement, but we need just a little bit more work on it,” said Mexico's chief negotiator Jaime Zabludovsky after the eighth round of talks ended last week.

The European Commission is also optimistic about the chances of a deal well within the end-of-year deadline set by both sides. “Some difficult issues still need to be resolved, but with some political effort we should be able to crack them,” said External Relations Commissioner Chris Patten earlier this week.

The latest round of negotiations in Mexico City added agreements on trade in investment and services to those already secured during the year-long talks. Officials say the two sides have also agreed on tariff reduction schedules covering 85&percent; of agricultural exports.

But despite these advances, some “tricky issues” have yet to be resolved when negotiations resume on 8 November. The most thorny of these is the scale and speed of market opening in the industrial sector. The EU is pushing for Mexican tariffs to be cut by 80&percent; between 2000-07, when duties are set to be scrapped. But Mexico is holding out for a reduction of only 60&percent; to protect its industries during the transition period.

Differences also remain in the area of public procurement, where the Commission is seeking full access to Mexican government purchases.

Mexico only finalised its offer at the end of last week's talks, prompting Union trade officials to accuse their central American counterparts of “dragging their feet”. They also reported continuing problems over fisheries and the rules of origin for products such as cars and electronic goods.