• You are here:
  • Home »
  • Blog »

A Major Us Motive for Negotiating a Free Trade Agreement with Mexico Was to

  • 17 January, 2022

Democratic candidate Bernie Sanders, who opposed the Trans-Pacific Partnership trade deal, called it “a continuation of other disastrous trade deals such as NAFTA, CAFTA and normal ongoing trade relations with China.” He believes that free trade agreements have led to the loss of American jobs and low American wages. Sanders said America needs to rebuild its manufacturing base by using U.S. factories for well-paying jobs for American workers, rather than outsourcing to China and elsewhere. [126] [127] [128] The pact has catalyzed Mexico`s transition from one of the world`s most protectionist economies to one of the most trade-friendly. Mexico had eliminated many of its trade barriers when it acceded to the General Agreement on Tariffs and Trade (GATT), the forerunner of the WTO, in 1986, but still had an average tariff level of 10% before NAFTA. After World War II, U.S. leaders felt it was crucial to establish international trade rules that would lead to a steady reduction in trade barriers. Policymakers believed that this was necessary for the global economy to recover from the ravages of the Great Depression and war, and that it would help prevent international disputes that could lead to future conflicts. Mexico has other motivations for further liberalization of trade with other countries, such as. B expanding market access for its exports and reducing its dependence on the United States as an export market.

By concluding trade agreements with other countries, Mexico seeks to achieve economies of scale in certain sectors of the economy and to expand its export market. Free trade agreements provide partners with wider market access for their goods and services. Countries can benefit from trade agreements because producers can reduce their unit costs by producing larger quantities for regional markets in addition to their own domestic markets. If more units of a good or service can be produced on a larger scale, companies can reduce production costs. Chapter 19 of NAFTA was a trade dispute settlement mechanism that subjected anti-dumping and countervailing duty (AD/CVM) rulings to binational panel review instead of or in addition to traditional judicial review. [58] In the United States, for example, the review of decisions of anti-dumping and countervailing authorities is usually reviewed by the U.S. Court of International Trade, an Article III tribunal. However, NAFTA parties have had the opportunity to challenge the decisions before binational groups composed of five citizens of the two relevant NAFTA countries.

[58] The panelists were generally lawyers with experience in international trade law. Since NAFTA did not contain any substantive provisions relating to the AD/CVM, the panel was tasked with determining whether the agency`s final decisions on the AD/CVM were consistent with the country`s domestic law. Chapter 19 is an anomaly in the settlement of international disputes because it does not apply international law, but requires a group of people from many countries to review the application of a country`s domestic law. [Citation needed] The current global agreement between Mexico and the EU contains provisions on national treatment and market access for goods and services; public procurement; intellectual property rights; investments; financial services; standards; telecommunications and information services; agriculture; dispute resolution; and other provisions. The agreement also contains chapters on cooperation in a number of areas, including mining, energy, transport, tourism, statistics, science and technology, and the environment.14 For industrial products, the EU has agreed to remove tariffs on 82% of the value of imports from Mexico at the time of entry into force of the agreement and to allow the remaining tariffs to expire by 1 January 2003. Mexico agreed: remove tariffs on 47% of EU imports by value after the implementation of the agreement and the remaining duties until 1. January 2007. For agricultural and fishery products, the signatories agreed to phase out tariffs on 62% of trade within 10 years.15 Customs negotiations on certain sensitive products, including meat, dairy products, cereals and bananas, have been postponed. Most non-tariff barriers, such as quotas and import and export licensing, were removed during the implementation of the agreement. Mexico has agreed to phase out restrictions on imports of new cars from the EU by 2007.

In the area of government procurement, Mexico has agreed to follow provisions similar to NAFTA to allow the EU to enter the Mexican market, while the EU has agreed to comply with WTO rules.16 In trade in services, the agreement goes beyond the WTO`s General Agreement on Trade in Services (GATS). It immediately granted European service operators “NAFTA-equivalent” access to Mexico in a number of areas, including financial services, energy, telecommunications and tourism.17 The Mexico-Panama Free Trade Agreement entered into force on 1 July 2015. Negotiations on the agreement started on 25 May 2013. After five rounds of negotiations, the talks were concluded on March 24, 2014, and the agreement was signed on April 3, 2014 in Panama City, Panama.38 The agreement fulfills one of the conditions for Panama`s membership in the Pacific Alliance, in which all members must have free trade agreements with each other. In addition to market access measures, the agreement contains provisions on intellectual property rights, rules of origin, dispute settlement, sanitary and phytosanitary measures, electronic commerce, financial services, travel rules and investment. The free trade agreement has 21 chapters and about 4,000 tariffs.39 By 1995, U.S. efforts to liberalize trade had been enormously successful. The Uruguay Round, which has just been concluded, has not only significantly reduced barriers to trade, but has also transformed the post-war GATT into a more comprehensive system of international trade rules covering services and intellectual property, as well as goods, and including binding dispute settlement procedures.