| WASHINGTON, Nov. 10 /U.S. Newswire/ -- The following was
released today by the Embassy of Mexico:
On Nov. 3, Mexico and the member states of the European Free Trade
Association (EFTA) (Iceland, Liechtenstein, Norway and Switzerland)
concluded negotiations for a free trade agreement that will create a free
trade area between Mexico and the highest per capita income countries in
the world. Mexico is the first country in the Western Hemisphere to
conclude a free trade agreement with EFTA.
For some time, Mexico and EFTA had expressed their interest in
concluding a free trade agreement, a commitment that was reaffirmed during
the meeting between Mexico's President Ernesto Zedillo with Swiss
President Adolf Ogi held early this year.
For Mexico this is a key trade agreement. In 1999, EFTA's gross
domestic product (GDP) was close to US$420 billion and its average per
capita income reached US$35,000, the highest in the world. EFTA's total
trade amounted to US$240 billion, with imports representing US$116
billion. Specifically, Mexico-EFTA trade added up to US$1.2 billion in
1999, with Mexican exports representing US$456 million and imports US$782
million.
The negotiation involved four rounds of talks that started in July
2000, and was carried out through four technical groups: trade in goods;
services and investment; legal and institutional aspects; and other
issues.
The negotiations for this free trade agreement were modeled after the
one concluded between Mexico and the European Union, which came into
effect on July 1st, 2000. This approach greatly facilitated consultations
with the private sector, and allowed negotiations to progress quickly.
Main Results:
Market access: trade liberalization is reciprocal and acknowledges
asymmetries in development levels, allowing Mexico to gradually open its
market to EFTA over a longer period of time. EFTA countries offered
Mexican products a faster liberalization schedule.
When this free trade agreement enters into effect, all Mexican
industrial products exported to an EFTA country will enter duty free.
Mexico will grant duty free access to 60 percent of its EFTA imports when
the agreement becomes effective, while access for the remaining 40 percent
will be phased out by 2003, 2005 and 2007. According to this schedule,
tariffs for the final 25 percent of EFTA imports into Mexico will be
eliminated by 2007. The liberalization schedule in this free trade
agreement is even more favorable compared to what Mexico obtained from the
EU.
In agriculture, current tariff levels will remain unchanged for certain
products such as cereals, meat, dairy and sugar (including sweets and
chocolates). Mexico obtained immediate preferential access for products
with great export potential such as coffee, bananas, orange juice and
other citrus juices, tropical fruits, grapes, honey for industrial use,
beer and tequila. Mexico also accomplished substantial preferential access
for its exports of sugar. The liberalization schedule for these Mexican
products is even more favorable than the one under the Mexico-EU free
trade agreement.
Tariffs for all fish products that originate in and are exported from
Mexico, with the sole exception of tuna and sardines, will be eliminated
upon the agreement's entry into force.
Rules of origin: Mexico and the EFTA members established rules of
origin as well as verification and certification procedures, similar to
those provided in the Mexico-EU free trade agreement. These rules of
origin are favorable to Mexican producers, particularly those in the
chemical, automotive, electric and electronic sectors.
Disciplines for trade in goods and services, investment, government
procurement, rules on competition and intellectual property rights, and a
dispute settlement mechanism, are similar to those established in Mexico's
free trade agreements with other countries and trade blocks.
Contingent on the Mexican Senate's approval of this Agreement, Mexico
could enjoy preferential access to 12 million additional consumers with
the highest purchasing power in the world. This market would add to the
860 million consumers in countries with which Mexico already has free
trade agreements in place. It could also give Mexico preferential access
to practically all of Western Europe and could promote foreign direct
investment from EFTA countries into Mexico. In 1998, the latest year where
there are figures available, Mexico was their tenth investment destination
with US$455 million.
This new free trade agreement will enable Mexico to further diversify
its market and its export platform. It will strengthen its network of free
trade agreements as it will expand it to include 32 countries, that
account for more than 60 percent of the world's GDP. Finally, it will
allow companies in Mexico to reach around 872 million consumers worldwide. |