A free trade agreement between Colombia, Mexico and Venezuela. The three countries enacted the accord on January 1, 1995.
Together, these three countries comprise 70% of theentire population of the Greater Caribbean region and which created an extended market of 149 million consumers with a combined GDP (Gross domestic product) of US$486.5 billion.
The agreement statesa ten percent tariff reduction over ten years (starting in 1995) for the trade of goods and services among its members. The agreement is a third generation one, not limited to liberalizing trade, butincludes issues such as investment, services, government purchases, regulations to fight unfair competition, and intellectual property rights.
Venezuelan President Hugo Chávez announced in May 2006that his country would withdraw from the trade bloc, due to differences with its two partners. In April, Venezuela had also announced its plans to leave the Andean Community, after Colombia andPeru reached free trade agreements with the United States and Ecuador kept in negotiations for one. Venezuela has since applied to join Mercosur.
Mexico announced that a replacement for Venezuela wouldbe sought among interested countries, such as Panama, Ecuador and Peru.
The main financial feature of the agreement is to reduce all tariffs by 10 percent from 1995to 2005. In addition, it seeks to protect the environment and make investment a friendly and easy process from state to state. Importantly, one of the main features of the agreement is to protectintellectual property rights through the creation of a single code of patent law.
The agreement itself spells out its major functions. It is to encourage diversification ininvestment and consumption as well as remove, gradually, trade barriers among the various governments. But most importantly, the purpose of the G3 agreement is to promote fair and equitable trade among...