Brussels, 08/05/2002 (Agence Europe) - The EU/Mexico Joint Council will be meeting on Monday afternoon in Brussels, under the chairmanship of Spanish Foreign Minister Josep Piqué and his Mexican counterpart, Jorge Castañeda. The Joint Council will take stock of political dialogue, cooperation and the impact that the association and free trade agreement, that has been in force for the past two years, will have on trade.
On the trade front, the Joint Council is expected to decide to speed up dismantling of customs duties in the automobile and pharmaceuticals sectors. Mexico would abolish, from 20 May on, customs duties on a series of pharmaceutical and chemical products (used as components by pharmaceutical firms established in Mexico), as well as on spare parts for cars. Mexican duties on these products vary at the present time from 2.2% to 8%. In 2001, exports of the products concerned amounted to EUR 852 million, out of a total exported value of EUR 1 billion. On 20 May, instead of the date scheduled, i.e. 1 January 2003, Mexico will also be abolishing customs duties on an import quota for automobiles equivalent to 14% of the Mexican automobile market. Duties are only 1.1% at present, but this extra 6 months will allow Europeans to gain an equal footing with their American competitors on the Mexican market.
The EU will for its part abolish, on 20 May, duties on Mexican exports of cars, buses, bicycles, and automobile chassis. Duties currently vary from 1.1% to 3.3% on these products. In 2001, Mexican automobile exports amounted to a value of EUR 644 million out of exports worth EUR 659 million. The Commissioner recalled, in presenting his mandate, that this decision would be "very advantageous for the EU", since "for industrial products, the EU must at any rate eliminate customs duties by 1 January 2003, whereas Mexico has until 2007 to complete its liberalisation" (see EUROPE of 15 March, p.8). The abolition of European duties on automobiles should also be to the advantage of European makers such as Volkswagen (for the "beetle" model) or Renault, which produce, in Mexico, a number of models sold in Europe.
The Joint Council is expected to also take a decision that will mean the two parties will apply the basic tariffs (in force before the agreement) on products that have still to be liberalised, instead of MFN (Most Favoured Nation) tariffs currently applied by the EU.
Both parties, moreover, are to evoke the "review clause" of the agreement, which provides for going back on the liberalisation of sensitive agricultural products and services (milk products, cereals, beef and veal, etc.), a clause left hanging when the agreement was concluded, pending the end of the multilateral negotiations at the WTO. Concluded before the failure of the Seattle talks, the agreement provided for the question to be reviewed in 2003, but delays in multilateral negotiations could encourage Europeans to ask for this deadline to be postponed. Both parties are to continue "reflection" on the question, notes a European diplomat.
In the context of political dialogue, the ministers will take stock of bilateral relations, on the eve of the visit by Mexican President Vicente Fox, in Tuesday in Brussels. They are expected to discuss the "Plan Puebla Panama" project, the preparation of the EU/Latin America/Caribbean summit on 17 and 18 May, and the follow-up of the United Nations conferences in Monterrey and Johannesburg.
In cooperation matters, Europeans are to urge for the rapid conclusion of new sector-specific agreements in the field of science and technology, education and the environment, as provided for in the association agreement.
First meeting of the "Business dialogue" will, moreover, be held on 14 May in Brussels, with the participation of Mexican President Vicente Fox, his Economy Minister Louis Derbez, and European Trade Commissioner Pascal Lamy.