Efta Mexico

Ref.24942 FREE TRADE AGREEMENT BETWEEN THE EFTA STATES AND MEXICO

SUMMARY The Free Trade Agreement between the EFTA States and Mexico was signed in Mexico City on 27 November 2000 and entered into force on 1 July 2001. The Agreement covers trade in industrial products as well as fish and marine products. The transitional period ends on 1 January 2007. In addition, bilateral agriculturalagreements between the individual EFTA countries and Mexico have been concluded which form part of the instruments creating the free trade area. Among the objectives of the Agreement (Article 1) are the progressive liberalisation of trade in goods in conformity with Article XXIV of the GATT and the liberalisation of trade in services in conformity with Article V of the GATS. It is thus a so-calledsecond generation Free Trade Agreement in so far as in addition to covering trade in goods, it also includes within its scope trade in services, investment and public procurement.

CONTENT OF THE AGREEMENT The Agreement consists of nine Chapters with a total of 85 Articles, twenty-one Annexes, four Joint Declarations and a Record of Understanding covering the following subjects: Trade in GoodsServices and Investment Competition Government Procurement Intellectual Property Institutional Provisions Dispute settlement

TRADE IN GOODS Mexico is one of the EFTA States’ most important trading partners in Latin America and an important market for its exports, with significant growth potential. Bilateral trade in goods in 2000 amounted to 816,4 million USD (EFTA exports amounting to 647million USD, whereas Mexico's exports to the EFTA States represented 169,4 million USD).

2 Rules of Origin The rules of origin for industrial goods (Annex I) concerning the definition of the concept of originating products and the methods for administrative co-operation, are based on the current European model, maintaining the general structure and the substance of the European standard rules. Thespecific list rules (Appendix 1 to Annex I) to the origin Annex are based on the EU-Mexico framework rules, adjusted to specific needs and requirements of the EFTA States and Mexico, taking into account the trade flows between the parties. The result is more liberal rules in sectors where either party is faced with a lack of raw materials or components (e.g. for chemicals, machinery and carparts). In the textile and apparel sector Mexico allocates quotas to the EFTA States for the importation into Mexico of textiles and apparel goods under a more liberal regime (Appendix 2(a) to Annex I). Industrial Goods The Agreement provides for effective market access for industrial goods in terms of tariffs and rules of origin, creating NAFTA and EU parity for EFTA exports to Mexico. Mexico willgradually liberalise all industrial products with the same tariff dismantling schedules as in NAFTA and the EU-Mexican Agreement (Annex V), meaning that 47 % of the industrial goods originating in the EFTA States will be duty free as of the entry into force of the agreement. By 2003 the percentage will increase to 60 % and by 2005 another 6 % of the goods will become free. Tariffs on the remaining34 % will be eliminated by 2007. In exchange, EFTA accords duty free access for Mexican exports of all industrial products by the entry into force of the Agreement (Annex IV). Fish and marine products The Agreement covers trade in all fish and other marine products (Article 4 and Annex III). The EFTA States grant duty free access on imports of all Mexican fish products. As of entry into force ofthe Agreement, an important share of fish and other marine products from the EFTA States will benefit from duty-free access to the Mexican market (Annex III). Other fish products are subject to tariff dismantling schedules of three, eight, nine and ten years, respectively. Mexico will maintain existing tariffs concerning a limited number of products for the time being which are of less economic...