MEXICO - EFTA

Mexico's wide network of free-trade agreements (FTA) was further enhanced with the recent signing of a free-trade agreement with the members of the European Free-Trade Association. The new agreement will enter into force on July 1^st 2001, making Mexico the only country in Latin America to have a free-trade area with the highest per capita income countries in the world.

¿What is the European Free Trade Association?

The European Free Trade Association (EFTA) was created on November 4th 1960, with the aim of forming a free-trade area in Europe. The EFTA now includes four countries: Iceland, Norway, Liechtenstein and Switzerland. In 1999 the EFTA's GDP reached 419 billion dollars with an average annual per capita income of 35 thousand dollars.

In 1999, the Association's total trade reached US$240 billion, of which US$116 billion were imports. Total trade between the EFTA countries and Mexico reached US$ 1.2 billion.

Three members of the EFTA (Norway, Iceland and Liechtenstein) currently participate in the European Union single market through the mechanism known as European Economic Area (EEA). For its part, Switzerland has an ample free-trade agreement with the European Union.

Results of the Negotiation

MEFTA negotiations involved four rounds of talks between July and November 2000 and were organised in four technical groups: trade in goods; services and investment; legal and institutional aspects; and other issues.

Antidumping and subsidies: The Parties agreed to maintain their rights and obligations to apply their respective anti-dumping and countervailing measures, in conformity with the WTO rules. Aiming to promote constructive solutions, the Parties agreed to a consultation period after a complaint is presented and before the investigation is formally initiated.

Competition: This chapter sets up the commitment undertaken by the different Parties in implementing their respective competition laws to proscribe monopolistic behaviours. It contains general rules in the area of co-operation as well as a consultation mechanism between the competent authorities of both Parties. 

Public Procurement: The basic structure of this chapter lies on the principles of national treatment, denial of benefits and right of appeal. With respect to public procurement procedures, rectifications and modifications to the lists of entities covered under this chapter, Mexico will apply the NAFTA proceedings, and the EFTA members will apply the WTO Government Procurement (GPA).

Market Access: The FTA sets up a gradual and mutual market liberalisation schedule for both Parties.

• Industrial products. Upon entry into force of the FTA, Mexico negotiated a full market access for all its industrial exports.
  EFTA countries negotiated gradual tariff elimination for industrial exports to Mexico, upon entry into force of the treaty through the year 2007.
   
• Agricultural products. Mexico negotiated preferential access for a great variety of products such as: bananas, orange and other citrus juices,  tropical fruits, grapes, honey for industrial use, green coffee, beer and tequila.
  In the agricultural sector, Mexico negotiated three bilateral agreements with each of the EFTA countries (Iceland, Norway and Switzerland/Liechtenstein) providing specific access treatment and tariff reduction in each case.

Rules of Origin: Mexico and EFTA countries set up rules of origin,  verification and certification procedures similar to those provided in the Mexico-EU FTA.

Services: The chapter contains rules and disciplines in conformity with the requirements of Article V of GATS (General Agreement on Trade in Services).

Investment: The Parties agreed on a definition of investment close to that of direct foreign investment, and assumed the obligation of guaranteeing free transfer of investment-related payments. They also ratified their international commitments in the area of investment.  

Intellectual property: In this chapter the Parties ratified their obligations under the different international treaties and conventions in accordance with the domestic internal legislation in the area of intellectual property. They also set up a specific consultation mechanism for intellectual property-related matters.

Dispute settlement procedures: The Parties agreed on expedite and transparent dispute settlement procedures, giving preference to conciliation prior to the establishment of an arbitral panel. Both Parties reserve the right to appeal before the WTO for any decision taken by the foreseen mechanism.