EU, Mexico Aim To Upgrade Bilateral Trade Pact

The European Union and Mexico will soon enter into new negotiations to beef up their existing free trade agreement, the two governments announced Monday, citing the need for the accord to tackle new areas like investment, regulatory hurdles and intellectual property rights.

Having recently completed talks for a trade deal with Canada and forging ahead with the Transatlantic Trade and Investment negotiations with the U.S., EU Trade Commissioner Cecilia Malmstrom said that upgrading the 28-nation bloc's 15-year-old pact with Mexico is crucial to ensure better integration with North America.

“Our agreement needs to adapt to a new reality,” Malmstrom said Monday. “Therefore, we will make the modernized EU-Mexico trade agreement comparable to our deal with Canada and to what TTIP will become.”

Malmstrom said that she will formally seek a negotiating mandate from European lawmakers sometime this fall. In the meantime, the two sides are wrapping up a so-called scoping exercise to hammer out the details of exactly how far the new talks will reach, according Malmstrom's office.

Enacted in October 2000, the EU-Mexico agreement was negotiated at a time when the global economy was far less interconnected and certain commercial innovations were still in their infancy.

The resulting pact therefore focused heavily on the removal of tariffs, which are now among the least controversial commercial barriers to overcome, Malmstrom said, ticking off a list of policy areas that a new iteration of the accord should address.

Chief among those was the need to smooth out regulatory differences between the two partners, which has proven to be a key EU priority in both the Canada and U.S. trade initiatives.

“That means comprehensive chapters on nontariff barriers for industrial goods, food and agriculture,” Malmstrom said. “We should also make commitments to promote good regulatory practices like impact assessments and public consultations. And we should address barriers in specific sectors where this is needed.”

On intellectual property, Malmstrom honed in on the EU-Mexico agreement's language on geographical indications for food and beverage products, adding that the mutual recognition arrangement at the core of the deal was inked in 1997, leaving many of the partners' valuable labels unprotected.

The EU trade chief also stressed the need for a new agreement to open market access for investors in industries like telecommunications and renewable energy, as well as open up Mexico's sub-central government procurement markets.

Along with boosting commercial opportunities, Malmstrom said that the new deal must be underpinned with strong and enforceable rules to safeguard labor conditions and the environment.

“All of this ambition to open markets needs to be backed up by clear commitments on sustainable development,” she said. “We need a modern approach here too, that makes sure workers and the environment are fully protected. A new deal must be about raising standards, not lowering them.”

An updated EU-Mexico trade pact would mean an even more expansive global trade network among the world's leading economies, as Europe would sport highly advanced pacts with the U.S., Canada and Mexico, all three of which are also parties to the 12-nation Trans-Pacific Partnership.

Source: Law360