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Political and Economic Context
The electoral victory in December 2000 of
Vicente Fox Quesada of the Partido de Acción Nacional (PAN)
opened a new chapter in Mexican political history. It signaled the
end of a period of 71 years of continuous government by the
Partido Revolucionario Institucional (PRI), and increased
confidence in the strength of Mexico’s democratic system. This
historic election raised expectations regarding significant
political, economic and social reforms. While there have certainly
been some positive achievements, the Fox government has often
struggled to meet the weight of these expectations partly due to
the lack of a majority in Congress needed to pass the necessary
reforms..
As for the near future, the three main
candidates for the 2006 Presidential elections will be Roberto
Madrazo (PRI), Felipe Calderon (PAN) and former Mexico City mayor
Andres Manuel Lopez Obrador (PRD).
On the international front, Mexico has
been a willing host of high profile conferences, although its
efforts to play a leading role in Latin America have at times been
eclipsed by the comparative assertiveness of Brazil. Actually
Mexico activism on UN Reform issues could be better understood,
among other things, by the intention of at least partially
counterbalancing Brazil’s aspiration to de facto regional
pre-eminence.
Mexico ratified the Rome Statute of the
International Criminal Court (ICC) and deposited the ratification
instrument at the UN headquarters in New York.
On the human rights front, the Fox government
initially tried to make human rights the centre-piece of its new
foreign policy. This commitment, which seemed to have lessened
during the mid-term phase of the mandate, has revamped during
2005, as testified by some important initiatives at regional
level.
In October 2005, South Eastern Mexico was hit successively by
two hurricanes. The first, Stan, caused significant damage to the
State of Chiapas, mainly through flooding caused by heavy rains.
The second, Wilma, was the strongest hurricane on record to hit
Mexico and caused severe damages to Cancun and other tourist
centers in the State of Quintana Roo.
Economy
On the positive side, macroeconomic stability
has been successfully maintained, with low inflation and the
public accounts showing a very limited deficit The 3.1% annual
increase in the Consumer Price Index represents a historic low and
the GDP growth could be over 3% in 2005 leaving clearly behind the
economic stagnation of the period 2001-2003. Regarding Foreign
Trade, figures showed a good performance during 2005, especially
for oil, which grew at a 12% annual rate.
From a macroeconomic perspective, the
measurement of the immediate impacts of the major natural
disasters in Chiapas and Quintana Roo points to limited effects.
More important are the microeconomic effects on specific sectors:
in the case of Chiapas, the social aspect is a priority; in
Quintana Roo, the economic effect is more relevant, although it
will eventually depend on the response strategies by the tourism
industry.
The improvement in public finances registered
this year and expected in 2006 is supported mainly by short term
factors (the high price of petroleum), as no structural
modifications have been introduced to strengthen the public
sector’s collection capacity, which implies that the vulnerability
of public finances in the face of external’s shocks is maintained.
However, the lack of a parliamentary majority -
a state of affairs reinforced by the results of the 2003 mid-term
elections – has so far prevented the Government from successfully
addressing a number of areas considered by many to be crucial to
the development of Mexico, in particular fiscal policy, the energy
sector, and the legal system. Growing divisions between different
factions of the PRI, still the largest party in the Senate has
complicated further the task of obtaining parliamentary approval
for new legislation on traditionally controversial topics.
The inability to date of the Fox government to
push through fiscal, energy and legal reforms could have a
negative effect on Mexico’s international competitiveness and
could leave the country less attractive as a destination for
foreign direct investment. There is awareness that Mexico’s
privileged position with regard to the US Market – a position
reinforced by the entry in force of NAFTA in 1994 – is now
threatened by the growing competitiveness of other countries, most
obviously China.
Depending on how poverty is measured, the
percentage of Mexicans living in poverty in 2004 was 39.4% whereas
in 1999 it reached 45.1%.(UN Economic Commission for Latin America
and Caribbean) According to the Millenium development goals, there
was an improvement between 1989 and 2002, period during which the
proportion of people living with less than one dollar a day passed
from 10.8 to 4.1.
However, as it is much the case across Latin
America, poverty reduction will not only depend on economic growth
but also on a reduction in the high levels of inequality
(improvements in social cohesion). Mexico shows particularly large
inequalities between regions (in general, southern states are
poorer than northern states) and between ethnic groups (with
indigenous populations more likely to be poor). In 1999, Mexico
had a GINI coefficient of 0.57, one of the highest in Latin
America (UN Economic Commission for Latin America and Caribbean),
and in 2004, this rate was 0, 46, meaning that inequality has
increased in the most recent years (the closer the rate is to 1,
the more the income is concentrated, i.e., fewer inequalities).
EU-Mexico Relations
Bilateral relations between the EU and Mexico
are governed by the Economic Partnership, Political Co-operation
and Co-operation
Agreement  
(Global Agreement) signed in Brussels on
8 December 1997. This Agreement entered into force on 1st October
2000 (published OJ L276 of 28 October 2000).
Adopted by
32000D0658
(OJ L 276 28.10.2000 p. 44)
Implemented by
22001D0153
(OJ L 070 12.03.2001 p. 7)
This Agreement is based on democratic
principles and on the respect for human rights, which are an
"essential element" that "underpins the domestic and external
policies of both Parties". It also institutionalizes a regular
political dialogue at the highest level and extends bilateral
co-operation that existed in the 1991 Framework Agreement.
With respect to trade, the Agreement sets out
the objective of establishing a free trade area in goods and
services, the mutual opening of the procurement markets, the
liberalization of capital movements and payments, as well as the
adoption of disciplines in the fields of competition and
intellectual property rights
The trade aspects of the Agreement were
subsequently adopted through the following decisions of the
EU-Mexico Joint Council:
1.
Decision 2/2000, establishing a Free Trade Area in goods. This
decision was adopted on 23rd March 2000 by the EU-Mexico Joint
Council and entered into force on 1st July 2000. The full text of
the Decision is published in OJ L157 of 30 June 2000, and the
annexes are published in OJ L245 of 29 September 2000.
Decision 2/2000 provides for:
a. the progressive and reciprocal
liberalization of trade in goods, in conformity with Article XXIV
of GATT 1994;
b. the opening of agreed government procurement
markets of the Parties;
c. the establishment of a co-operation
mechanism in the field of competition;
d. the setting up a consultation mechanism in
respect of intellectual property matters; and
e. the establishment of a dispute settlement
mechanism.
2.
Decision 2/2001, establishing a Free Trade Area in services,
adopted on 27 February 2001 by the EU-Mexico Joint Council
(published OJ L 70 of 12 March 2001). This Decision entered into
forced on 1st March 2001 and lays down the necessary arrangements
for the implementation of:
a. the progressive and reciprocal
liberalization of trade in services, in conformity with
Article V of GATT;
b. the progressive liberalization
of investment and related payments;
c. adequate and effective
protection of intellectual property rights, in accordance with
the highest international standards;
d. and the establishment of a
dispute settlement mechanism.
3. Council decision of 31 January 2005 on the
conclusion of an Additional Protocol to the Economic Partnership,
Political Coordination and Cooperation Agreement between the
European Community and its Member States, of the one part, and the
United Mexican States, of the other part, to take account of the
accession of the Czech Republic, the Republic of Estonia, the
Republic of Cyprus, the Republic of Latvia, the Republic of
Lithuania, the Republic of Hungary, the Republic of Malta, the
Republic of Poland, the Republic of Slovenia and the Slovak
Republic to the European Union (JO
n° L 066 du 12/03/2005 p. 0022 – 0023).
4. In addition, there exist three sectoral
agreements:
-
Agreement between the European Commission and
the United States of Mexico concerning the mutual recognition
and protection of designations for spirit drinks, signed on 27
May 1997
OJ L 152 , 11.06.1997
-
Agreement between the European Commission and
the United States of Mexico on co-operation regarding the
control of precursors and chemical substances frequently used in
the illicit manufacture of narcotic drugs or psychotropic
substances, signed on 13 March 1997. OJ L 077 19.03.1997
-
html - Adopted by
31997D0184
-
Agreement between the European Commission and
the United States of Mexico on Scientific and Technological
Cooperation, promoting the establishment of long-term
institutional alliances between research centers, signed on 3
February 2004. Council Decision of 13 June 2005 on the
conclusion of the Agreement for Scientific and Technological
Cooperation (2005/766/EC).
OJ L 290 04.11.2005
Other documents of interest
- Framework Agreement for cooperation between the European
Economic Community and the United Mexican States - Unilateral
Declarations - Exchange of Letters
OJ L 340 11.12.1991 p. 2 -
html - Adopted by
31991D0627 (OJ L 340
11.12.1991 p. 1)
- Decision No 1/2001 of the EU-Mexico Joint Council of 27
February 2001 establishing the Rules of Procedure of the
EU-Mexico Joint Council and the Rules of Procedure of the
EU-Mexico Joint Committee (2001/152/EC)
OJ L 070 12.03.2001 p. 1
html
pdf
- Decision No 2/2001 of the EU-Mexico Joint Council of 27
February 2001 implementing Articles 6, 9, 12(2)(b) and 50 of the
Economic Partnership, Political Coordination and Cooperation
Agreement (2001/153/EC)
OJ L 070 12.03.2001 p. 7
html
pdf
- Decision No 1/2002 of the European Union-Mexico Joint
Committee of 20 December 2002 relating to Annex III to Decision
No 2/2000 of the European Union-Mexico Joint Council of 23 March
2000, concerning the definition of the concept of "originating
products" and methods of administrative cooperation (2003/99/EC)
OJ L 044 18.02.2003 p. 97
html
pdf
- Decision No 3/2002 of the EU-Mexico Joint Council of 13 May
2002 relating to the tariff treatment of certain products listed
in Annexes I and II to Decision No 2/2000 of the EU-Mexico Joint
Council (2002/370/EC)
OJ L 133 18.05.2002 p. 28
html
pdf
- Decision No 5/2002 of the European Union-Mexico Joint
Council of 24 December 2002 relating to Annex III to Decision No
2/2000 of the European Union-Mexico Joint Council of 23 March
2000, concerning the definition of the concept of "originating
products" and methods of administrative cooperation (2003/98/EC)
OJ L 044 18.02.2003 p. 1
html
pdf
- Decision No 4/2002 of the EC-Mexico Joint Council of 6
November 2003 adopting rules of procedure of the EC-Mexico
special committees (2003/824/EC)
OJ L 311 27.11.2003 p. 24
html
pdf
- Decision No 1/2004 of the European Union-Mexico Joint
Committee of 22 March 2004 relating to Annex III to Decision No
2/2000 of the EU-Mexico Joint Council of 23 March 2000,
concerning the definition of the concept of "originating
products" and methods of administrative cooperation
(2004/362/EC)
OJ L 113 20.04.2004 p. 60
html
pdf
- Decision No 1/2004 of the EU-Mexico Joint Council of 29
March 2004 accelerating the elimination of customs duties of
certain products listed in Annex II of Decision No 2/2000 of the
EU-Mexico Joint Council (2004/369/EC)
OJ L 116 22.04.2004 p. 29
html
pdf
Political Relations
The Economic Partnership, Political
Co-ordination and Co-operation Agreement (or “Global Agreement”)
signed in December 1997 provides for the institutionalization of
the political dialogue "covering all bilateral and international
matters of mutual interest" at all levels:
a. Summit at the level of Presidents
-
On 18th May, 2002 the
First Mexico-European Union Summit
took place in the
framework of the Global Agreement. The leaders re-stated their
belief that interregional dialogue provides an ideal forum for
addressing the main issues on the current global agenda and
confirmed their commitment to the United Nations. They
reaffirmed their belief that the strengthening of multilateral
institutions and the implementation of international law help
to achieve international security, prosperity and well-being.
b.
Joint Council at Ministerial level -
On the agenda of the
First Joint Council meeting on the
27th of February 2001,
within the framework of political dialogue, the ministers
referred to current issues both within Mexico and the EU such
as human rights, democracy and the fulfillment of the Nice
Treaty.
At the
Second EU-Mexico Joint
Council meeting on 13th May 2002
the Parties confirmed the importance of the meetings to
consolidate bilateral relations and also examined the results
of the Agreement during its first eighteen months in force. In
addition, other issues discussed were developments in Latin
America, the Plan Puebla Panama, and the preparation and
importance of the Second Summit of Heads of State and
Government of Latin America, the Caribbean and the European
Union, which was held in Madrid later that same month.
At the
Third EU-Mexico Joint Council Meeting
on 27th March 2003,
the Parties drew a positive assessment of the implementation
of the agreement; they discussed the impact of EU enlargement
on bilateral relations; they highlighted the important
potential and dynamics of bilateral trade and investment
flows; they expressed satisfaction with the conclusion of
negotiations of the bilateral agreement in science and
technology; and they emphasized the importance of the first
EU-Mexico Civil Society Forum held in Brussels in
November 2002.
At the
fourth EU-Mexico Joint Council on
25th May 2005, the parties proceeded to a discussion
about ways to reinforce their political dialogue and enhance
coordination in international fora. They reaffirmed their
determination to contribute to achieving the Millennium
Development Goals (MDGs). Future EU-Mexico cooperation should
take into account specific sectoral policy dialogues and
specific sectoral agreements foreseen in the global agreement.
In this context, particular attention will be devoted to the
issue of social cohesion The Parties expressed their
endorsement in principle for institutionalization of the
dialogue with the Civil Society.
The fifth meeting of the EU-Mexico Joint
Council will be held in the first half of 2007 in
Brussels.
c.
Joint Committee at senior civil servant level - On 2 October 2001 the
First EU-Mexico Joint Committee meeting
took place in
Brussels one year after the entry into force of the Global
Agreement. The agenda not only included co-operation and trade
issues but also aspects of political dialogue covering among
others the United Nations conference on financing development,
the fight against terrorism, high level meetings between the
EU and Mexico in 2000-2001 and the next summit between
EU-Latin American and Caribbean countries in May 2002.
Moreover, the
Second EU-Mexico Joint Committee meeting
(in
Puebla, Mexico, 3 October 2002), confirmed the mutual desire
to strengthen political ties and to work together to bring
about closer political and economic co-operation.
The Third EU-Mexico Joint Committee meeting
took place
in Brussels on 11 November 2003. The parties reviewed the
state of bilateral cooperation, particularly in the field of
human rights and emphasised the importance of the dialogue
with civil society. Regarding trade aspects, the
implementation of the FTA Agreement and its perspectives after
the accession of the 10 new Member States in 2004, was
discussed among other subjects.
The fourth EU/Mexico Joint Committee
meeting took place in Mexico on 10 November 2004. Both parties
showed a strong interest in upgrading the level of existing
bilateral relations and expressed their willingness to work
closely together in that direction. In parallel to the JC, two
EU-financed seminars were carried out (on Social Cohesion and
on Torture). Regarding the trade aspects, the main result was
the decision to start negotiations during 2005 on Services,
Agriculture and Investment, as provided for in the review
clauses of the Global Agreement. As regards cooperation, the
parties reviewed the existing programs and sectors and, within
the general framework of the reinforcement of the bilateral
cooperation, reemphasized the importance of the dialogue with
civil societies.
The fifth EU/Mexico Joint Committee
meeting took place in Brussels on 26-27 October 2005. Prior to
starting of the meeting, the European Union expressed its
solidarity to Mexico for the victims and damages caused by the
hurricanes Stan and Wilma. During the political dialogue, the
European Union and Mexico discussed how to strengthen
bilateral political dialogue, the follow-up to the UN Summit,
the preparation of the next EU-LAC Summit in Vienna and
developments both in the EU, Latin America and the Caribbean
Region.
The sixth meeting of the EU/Mexico Joint
Committee is due to take place in Mexico in last semester
2006.
Trade Relations
Mexico is traditionally one of the EU’s most
important trading partners in Latin America and a strategically
important market for its exports, with significant growth
potential. The EU is Mexico’s second trading partner after the
USA. According to EUROSTAT, bilateral trade between the EU and
Mexico in 2004 totaled € 21.1bn, with EU exports amounting to €
14.6bn, and Mexico’s exports to the EU representing € 6.8bn,
leaving the EU with a trade surplus of € 7.8bn.
The Free Trade Agreement (FTA) covers a broad
spectrum of economic aspects. It includes: a full liberalization
of industrial products by 2003, for the EC, and by 2007 - with a
maximum 5% tariff applied by 2003 - for Mexico; substantial
liberalization for agricultural and fisheries products;
and, as regards rules of origin, a satisfactory balance between EU
policy of harmonization and market access considerations. The FTA
will also provide EU operators with access to the Mexican
procurement and services markets substantially equivalent to
NAFTA.
In the 4 years following the entry into force
of the FTA, bilateral trade between the EU and Mexico grew by
nearly 40 %. This in accordance with both parties' imports data.
During the fourth EU-Mexico Joint Committee,
which took place in Mexico in November 2004, the parties agreed to
start the review clauses in agriculture, services and investments
as foreseen in the Agreement. Parties are confident that such a
review, once concluded, will provide a more dynamic environment
for business operators and a full exploitation of the market
access possibilities already offered by the FTA.
Co-operation
In past years, an annual average of
approximately € 13M was committed to co-operation projects with
Mexico, covering mainly areas such as tropical forests, NGOs, ECIP
(European Community Investment Partners), ECHO (humanitarian aid),
economic co-operation, demographic policies, and refugees and
displaced persons. There were also significant activities under
horizontal programs such as AL-Invest (Latin America Investment
Programs), ALFA (Latin America Academic Formation) and URB-AL
(horizontal program of decentralized cooperation between European
Union and Latin American cities).
Bilateral co-operation activities for the
period 2002-2006 focus on the priorities identified in the
Country Strategy Paper
(CSP). The priority
action sectors are the following:
Social
development and the reduction of inequalities.
Economic
growth by facilitating the implementation of the Free
Trade Area and by fostering trade and investment through
SMEs projects.
Scientific
and technical co-operation.
Consolidation of the rule of law and institutional
support. The two areas of intervention are: reform of the
judicial system and actions in the Human Rights domain
through specialized EC budget lines.
An indicative total of €56.2 million is
available from the EU for the period 2002-2006 to finance projects
and programmes in these priority areas. As of early 2004,
financing for the following projects had already been signed (EU
contributions in brackets):
Strengthening the rule of law (€15
million)
Integrated and sustainable social
development in Chiapas (€15 million)
Integrated programme in support of
Mexican small and medium sized enterprises (€12 million)
A programme for the facilitation of the
EU-Mexico Free Trade Agreement, with an EU contribution of €8
million, was due to be agreed during the first semester of 2004.
Also during 2004, preparatory work is being carried out for a new
science and technology programme. It is hoped that the financing
agreement for this project will be signed in early 2005.
Mexico is one of three priority countries in
Latin America for the 2002-2004 European Initiative on
Democracy and Human
Rights.
Various projects are supported under this initiative,
including a project to strengthen human rights Ombudsmen in
Mexico, and an innovative project using radio to promote the human
rights of women.
On 3 February 2004 Mexico and the EU signed the
Agreement on
Scientific and
Technological Cooperation, promoting
the establishment of long-term institutional alliances between
research centres. The agreement also allows for the participation
of European and Mexican research institutes to participate in each
other’s national research programmes. As a first step in this
direction, Mexican research centres will be able to participate in
the
EC’s 6th Framework
Programme for research and technological development.
Bilateral co-operation activities for the
period 2007-2013 (CSP 2007-2013) are currently being examined by
the Commission and should be made available to the public in early
2006.
The priority sectors should be:
1. Social
cohesion and support to other policy dialogues,
Co-ordinated with specific policy
dialogues:
Social cohesion
Regional development and
decentralization;
Rule of law and institutional
strengthening;
Environment.
2. Economy and competitiveness
3. Education and Culture
It is also worth noticing that cross-cutting
issues of relevance, such as gender issues, indigenous
populations, etc. will receive particular attention when specific
projects and programs are formulated. In addition, assistance in
this sector will be conveyed through horizontal and regional
programs
Civil Society
The European Commission organised a first
EU-Mexico Civil Society
Forum in Brussels on 26 November 2002. Over 200
participants from Mexico and the EU – NGO representatives,
academics, business associations – met to discuss different
aspects of the EU-Mexico Agreement. The discussions, in the form
of initial presentations followed by debate, were divided into
three working groups covering political aspects, economic and
trade relations, and development cooperation.
During the forum civil society representatives
argued that civil society should have a greater say in influencing
the decision-making process. They suggested the establishment of a
social observatory to study the effects and implementation of the
EU-Mexico Agreement, and the creation of a Joint Consultative
Committee to facilitate discussions between civil society and
Mexican and European authorities.
The Second EU-Mexico Civil Society Forum took
place in Mexico, from 28 February to 1 March 2005. Four main areas
were discussed: a) the evaluation of the political and economical
impact of the Global Agreement, b) cooperation c) social cohesion
and d) the institutionalization of the political dialogue. The
creation of a Consultative Committee, as proposed by civil society
representatives during the first Forum, has also been discussed.
See:
 http://www.delmex.cec.eu.int/es/eventos/foro_social.htm
Basic Data
|
Official name: |
United States of Mexico |
|
Capital: |
Mexico City (Distrito Federal) |
|
Surface area: |
1,972,550 sq km |
|
Population : |
104,959,594 (July 2004 est.) |
|
Official language: |
Spanish / 56 indigenous languages |
|
Currency: |
New Peso.
More information |
|
Nature of the State: |
Federal Republic |
|
Administrative divisions: |
31 states and 1 federal district |
|
Head of Government
(President): |
Vicente Fox (PAN) |
|
Next presidential and legislative
elections: |
July 2006 |
|
GDP per capita : |
5.350 euros (2003) |
|
GDP growth : |
1.3% (2003) |
|
Inflation |
4.5% (2003) |
Related links:
Delegation of the European
Commission in Mexico D.F.
http://www.delmex.cec.eu.int/
EuropeAid Co-operation Office
http://europa.eu.int/comm/europeaid/index.htm
DG Trade
http://europa.eu.int/comm/trade/index_en.htm
Mexican Presidency
http://www.presidencia.gob.mx/
Mexican Government
http://www.gob.mx/wb2/
Mexican Government - Members of Cabinet
http://www.presidencia.gob.mx/gabinete/
Mexican Chamber of Deputies
http://www.cddhcu.gob.mx/
Mexican Senate
http://www.senado.gob.mx/
Mexican Political Parties:
Partido Revolucionario
Institucional (PRI)
http://www.pri.org.mx/
Partido de Acción Nacional
(PAN)
http://www.pan.org.mx/ver2002/
Partido de la Revolución
Democrática (PRD)
http://www.prd.org.mx/
Last updated: December 2005
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