The third round of negotiations, in Brussels on 3-7 April, for the upgrade of the comprehensive EU-Mexico agreement has enabled “good progress” on the trade part of the discussions, with the two sides hoping to finalise an agreement in principle by the end of 2017, a Commission source close to the issue told EUROPE on Friday 7 April.
“We are on track. We are going forward as we planned. We have made good progress. Our goal was to have our negotiating texts on the table and to begin working and making progress on the merging of these texts”, the same source stated.
This week, the EU has put new negotiation texts on the table. They cover the areas of trade and sustainable development, technical barriers to trade (TBT), transparency, services and investment – and the Commission will publish them next week.
The talks for upgrading the comprehensive EU-Mexico agreement, which has been in force since 2000, began in May 2016 and the second round was held in November 2016.
On 9 December 2016, the Commission published six EU negotiation texts covering access to public procurement, cooperation on sanitary and phytosanitary (SPS) issues, flexibility in the rules of origin, access to energy and raw materials, the protection of intellectual property rights (including geographical indications) and support to SMEs (see EUROPE 11686).
On the market access pillar (goods, services and public procurement) of the trade part of the talks, “we want to progress as quickly as possible. We are still discussing a date for the exchange of offers”, EUROPE’s source stated, adding that it remained uncertain that this exchange could take place before the first round of talks scheduled for June.
As regards tariff liberalisation, the interest of the negotiation is in the increased opening of agricultural markets. The EU has offensive interests in dairy products and pork in particular, and it wants account taken of its sensitivities in its concessions to Mexico, the source stated.
Alongside this, the EU wants "to better develop" the SPS arrangements and to obtain recognition and protection for its geographical indications (GIs). It has 300 GIs on the discussion table.
On access to public procurement, the EU wants a GPA+ agreement (in other words, concessions going further than the WTO agreement on public procurement – GPA) which Mexico has not yet joined. "We want an opening at the federal and sub-federal level", the source stated.
On the regulatory convergence pillar, the EU is trying to have convergence on "good regulatory practices", and does not want to harmonise but rather ensure the right of states to regulate.
As regards the rules pillar, the chapter on sustainable development is a challenge. "We want a legally binding commitment on clear and sustainable trade", the signature of ILO conventions, and in particular "we want their enforcement", EUROPE's source stated. On this issue, there are "questions and concerns" from the Mexican side, "this is new for them, but we can see they are involved", the source said.
As regards the chapter on investment protection and the settlement of disputes between investors and states, the EU has presented Mexico with its proposal of the investment court system (ICS) provided for in the EU-Canada and EU-Vietnam free trade agreements. "The Mexican side has asked questions and wants clarifications", but is ready to talk, EUROPE's source said.
With regard to access to energy and raw materials, the EU wants "to lock in the process of opening in the gas and oil sector" that has been undertaken by Mexico in recent years, with the reform of its state monopoly, the source stated. "Our approach aims to put an end to Mexico's possibilities of controlling and banning exports of energy and raw materials", the source added.
In addition, the EU wants to include anti-corruption arrangements in the broader framework of the comprehensive agreement and its arrangements on political coordination and cooperation. "We are still working with the European External Action Service on this approach", the source said.
On the sidelines of the negotiation round this week, the director general of the European Commission's DG Trade, Jean-Luc Demarty, and Mexico's deputy minister for trade, Juan Carlos Baker, underscored "the importance" that the EU and Mexico attach to this negotiation, agreeing to "move forward quickly" in order to "finalise and reach a political agreement by the end of 2017", EUROPE's source said. "But we will not sacrifice the substance on the altar of the timetable", the source added. (Original version in French by Emmanuel Hagry)