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December 14, 2017updated 09 Apr 2021 7:44am

Mexico turns attention to concluding EU trade deal

Mexico appears to be turning its attentions to securing an agreement on a major trade deal with the European Union (EU) before the end of the year, as talks to renegotiate the North American Free Trade Agreement (NAFTA) largely stall.

Mexico appears to be turning its attentions to securing an expanded trade deal with the European Union (EU) before the end of the year, as talks to renegotiate the North American Free Trade Agreement (NAFTA) largely stall.

Speaking on the sidelines of the World Trade Organization (WTO) ministerial conference in Buenos Aires this week, Mexico’s Minister for Economy, Ildefonso Guajardo, told Reuters: “There is a possibility, but not a guarantee” of an “agreement in principle” by year-end.

“That will depend on the technical discussions that the teams are having in Brussels to see if there are conditions to get the ministers together and close it out.”

The comments followed the conclusion of a sixth round of negotiations towards a wider free trade agreement last week in Mexico City. The Ministry said progress was made on key issues such as market access for goods, services and public procurement, as well as trade, the investment court system, sustainable development, energy and raw materials, and anti-corruption.

The current EU-Mexico Economic Partnership Agreement (EPA) entered into force in October 2000.

Negotiations towards a new ‘Global Agreement’ launched in May 2016 and negotiating teams are expected to meet again from 18 December to continue talks and “outline a possible closing of negotiations,” the Ministry said.

With qualifying textiles and apparel, travel goods and footwear from Mexico already benefiting from duty-free access to the EU market, textile and clothing trade is growing between the two sides. The most recent data shows textile exports from Mexico to the EU rose 8.4% year-on-year in 2016 to EUR80m, while clothing exports jumped 11.6% to EUR88m.

Likewise, the EU exported textiles worth EUR369m to Mexico, a rise of 9.9% year-on-year, and clothing exports climbed 7.6% to EUR489m.

The timing of the talks comes as discussions are ongoing to renegotiate the NAFTA deal between the US, Mexico and Canada.

These remain hung up, however, on a US proposal to increase the minimum threshold for North American content in autos to 85% from 62.5% over a three-year period.

Guajardo told Reuters that Mexico was still “having difficulty seeing how this is possible,” but said the government was discussing the degree and timeframe of possible changes to content percentages with the Mexican automobile parts industry.

The administration is also pushing to add an end clause to NAFTA as well as to allow countries to opt out of its investment dispute settlement system, changes the trading partners also oppose.

Little progress was made in the fifth round of renegotiations that concluded last month, with concerns expressed by the US on the “lack of headway” due to neither Canada nor Mexico “willing to seriously engage on provisions that will lead to a rebalanced agreement.”

The sixth round of NAFTA renegotiations is set to take place from 23-28 January 2018, in Montreal, Canada.

Lack of NAFTA progress continues to cause concern

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