Hot trade pact action under the wire as year expires

Welcome friend
Welcome friend

Since the launch of the North American Free Trade Agreement (NAFTA) in 1994, the Mexican government has pursued additional trade liberalization pacts aggressively.  Remarkably, legislators recently managed to advance on three trade fronts before tearing off to have fun for the holidays.

The first step forward was the November 22 signing of a new single free trade agreement between Mexico and Central America, which our Mexico Today colleague Sean Goforth discussed in a recent post to Foreign Policy Blogs.  Economy Minister Bruno Ferrari and his team had a tougher time, however, with their effort to push through an expanded trade liberalization agreement with Peru.  The proposed pact spent much of this year under consideration in the Mexican Congress before being rejected by the Senate Trade and Industrial Development Committee on December 14, to the supreme aggravation of the Calderón administration.  Despite having the support of various industrial sectors, the Peru deal was initially blocked by influential agricultural interests over fears of increased competition from Peruvian avocados, beans, potatoes and other farm products.  Ferrari faced not only the vexation of the jilted Peruvians but a potential blow to Mexico’s free trade bona fides as it flirts with possible inclusion in the developing Trans-Pacific Partnership trade bloc.  In a surprising turnabout, however, the treaty squeaked through in a vote by the full Senate on December 15, and now goes to President Calderón for signing.

The administration fared better with its effort to upgrade Mexico’s Economic Association Agreement with Japan.  Protocols negotiated between the two countries to expand access to each other’s markets were approved by the Japanese legislature on December 9, sending the new framework back to the Mexican Senate for approval.  In contrast to the Peru agreement, the Japan protocols sailed through with nary a peep and were approved by the full Senate December 15.  The modified agreement will increase Japanese import quotas for Mexican beef, pork, chicken, oranges and agave syrup in exchange for accelerated duty reduction in Mexico for Japanese products such as paper and auto parts, among other stipulations.  Enhanced access for auto parts is presumably of particular interest to Japan in light of the roaring performance of Mexico’s automotive manufacturing industry, much of it composed of Japanese OEMs.  The protocols will now go to the President’s office for signature, where they are highly unlikely to meet resistance.

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