EU Commission: Mexico Trade Talks “Progressing at a Good Pace”

27 July 2017

Efforts to upgrade an existing EU-Mexico trade accord are “progressing at a good pace,” according to the EU’s executive branch, which published last week recent textual proposals and a report on the advances made in the latest negotiating round.

The European Commission said that this release, along with a round summary relating to the EU’s negotiations with the Mercosur customs bloc, are part of its efforts to ensure more transparency in trade policy. The EU and Mexico were slated to hold “intersessional” discussions this week, with the next formal round planned for late September.

The reports say that recent rounds have yielded steady advances, with the announcement affirming that “both negotiations are progressing at a good pace with full engagement from both partners.”

Updating the Global Agreement

The EU-Mexico trade talks are a part of a bigger agenda of revamping the Global Agreement, which sets out the rules on trade and cooperation between the two parties. Concluded in early 2000s, proponents of an upgrade say that the provisions on goods and services trade have become somewhat outdated, while also noting the gains seen under the original deal as an argument supporting deeper ties.

Four years ago, the EU and Mexico began exploring “options for a comprehensive update,” and later announced in 2015 that they planned to move ahead with a new negotiation. (See Bridges Weekly, 13 May 2015)

Since then, they have held four formal rounds, with the latest taking place in Mexico City in late June and early July this year. “Significant progress was achieved during this round on most of the key issues, although further works are still required,” the report sums up.

Official Mexican communications prior to the meeting stressed the intention of both parties to conclude the talks before the end of the year. “Secretary Ildefonso Guajardo Villarreal and Commissioner Cecilia Malmström, held a telephone call in which they endorsed the commitment of both parties to conclude the modernisation this same year,” says the release, referring to the top Mexican and EU trade officials, respectively.

Malmström has also stated previously that both parties are “committed” to finishing trade talks to modernise the agreement in 2017. (See Bridges Weekly, 11 May 2017)

Advances reported on services, investment

The Commission’s report identifies the areas where the two partners have achieved progress, and builds off the previous communication from the third negotiating round, held in April.

Constructive dialogue was reported in the July round regarding issues of customs valuation, export and import licensing, various aspects on trade in services, public procurement, trade facilitation, and trademarks, according to the EU.

On services, the two trading partners are already working towards developing consolidated texts, including provisions relating to digital trade, telecommunications, and financial services, among others.

The report also says that the two sides agreed “on provisions relating to investment liberalisation and protection,” without delving into further detail. One of the areas that saw “significant progress” was a planned chapter relating to supporting small and medium-sized enterprises’ (SMEs) engagement in trade.

Discussions are still ongoing on issues such as export duties and charges, export restrictions, trade remedies, trade in repaired or remanufactured products, an annex on wine and spirits, geographical indications, subsidies, competition, and technical barriers to trade (TBTs).

Despite the various advances reported, the two sides will still need to reconcile differing approaches to certain areas of trade policy going forward.

For example, the EU also released last week an updated textual proposal for TBTs, which highlights the modifications that the bloc is seeking in the course of the negotiations. Major changes relate to conformity assessment, which refers to the steps needed to meet the requirements for selling a product within either party.

“Mexico raised concerns related to the level of ambition of the proposals and compatibility with its system and legal framework,” the negotiating round report mentions on the subject of TBT.

Protection of EU’s geographical indications (GIs) has long been a crucial topic for EU trade negotiators, whether in this accord or in other contexts. Geographical indications are used for products who have a specific geographical origin, with reputation and characteristics tied to that location. Common EU examples include Feta cheese from Greece, or champagne from France. An example from Mexico would be the liquor tequila.

In the latest round of negotiations, Mexico “explained how it intended to proceed with the publication of the public opposition for the EU GIs.”

Mercosur recap, leaders’ push

The release of negotiating reports also included an update on EU free trade talks with four founding members of Mercosur – Argentina, Brazil, Paraguay, and Uruguay. The long-running negotiations have picked up steam since in 2016, and Brussels hosted the 28th round in early July. (See Bridges Weekly, 13 July 2017)

“As a result of the round, we have practically an agreed text on: customs and trade facilitation, mutual administrative assistance, financial services and capital movements and payments, as well as important progress on a range of other texts, notably goods, services and establishment, government procurement, geographical indications, trade and sustainable development and dispute settlement,” says the Commission’s report.

Mercosur leaders, at a summit held last week in Mendoza, Argentina, flagged the uptick in momentum as one of the most promising areas for the group, with some officials reiterating the hope that those talks might come to a close before year’s end.

“Mercosur’s participation in world trade should increase significantly and that is why trade agreements have been prioritised. We are moving forward with a view to finalising the EU deal in December this year,” said Argentine Foreign Minister Jorge Faurie, according to comments reported by EurActiv.

Other officials, while similarly suggesting that an accord might be possible in 2017, have suggested that both sides will need to be “pragmatic” in their approach to doing so. The talks for a region-to-region trade deal fall within a larger effort to ink an Association Agreement between the two blocs, and have been underway since 1999 with mixed results.

ICTSD reporting; “Mercosur nations prioritise end-of-year EU trade deal,” EURACTIV, 25 July 2017; “Mercosur pide pragmatism para cerra acuerdo con la UE,” DEUTSCHE WELLE, 20 July 2017.

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