The Free Trade Agreement covers trade in industrial products as well as fish and marine products. In addition, bilateral agricultural agreements between the individual EFTA countries and Mexico have been concluded which form part of the instruments creating the free trade area.
Among the objectives of the Agreement (Article 1) are the progressive liberalisation of trade in goods in conformity with Article XXIV of the GATT and the liberalisation of trade in services in conformity with Article V of the GATS. It is thus a so-called second generation Free Trade Agreement in so far as in addition to covering trade in goods, it also includes within its scope trade in services, investment and public procurement.
The Agreement consists of nine Chapters, 85 Articles, 21 Annexes, five Joint Declarations and a Record of Understanding. The Agreement covers the following main subjects:
- Trade in Goods
- Rules of Origin
- Trade in Services
- Protection of Intellectual Property (IPR)
- Government Procurement
- Institutional Provisions
- Dispute settlement
Trade in Goods
The Agreement provides for effective market access for industrial goods in terms of tariffs and rules of origin. Mexico has gradually liberalised all industrial products (Annex V). In exchange, EFTA accords duty free access for Mexican exports of all industrial products by the entry into force of the Agreement (Annex IV).
Fish and marine products
The Agreement covers trade in all fish and other marine products (Article 4 and Annex III). The EFTA States grant duty free access on imports of all Mexican fish products. Mexico maintains tariffs for a limited number of products which are of less economic importance to the EFTA States.
Trade in agricultural products is covered in three bilateral agricultural agreements negotiated between the respective EFTA State (Iceland, Norway and Switzerland) and Mexico. These agreements form part of the instruments establishing the free trade area and are subject to the relevant disciplines for trade in goods in the main agreement. They provide for substantial concessions on both sides, while taking into account the respective sensitivities. Each agreement contains specific rules of origin, generally based on the “wholly-obtained” criteria.
Rules of Origin
The rules of origin for industrial goods (Annex I) concerning the definition of the concept of originating products and the methods for administrative co-operation, are based on the current European model, maintaining the general structure and the substance of the European standard rules. The specific list rules (Appendix 1 to Annex I) to the origin Annex are based on the EU-Mexico framework rules, adjusted to specific needs and requirements of the EFTA States and Mexico, taking into account the trade flows between the parties.
The result is more liberal rules in sectors where either party is faced with a lack of raw materials or components (e.g. for chemicals, machinery and car parts). In the textile and apparel sector Mexico allocates quotas to the EFTA States for the importation into Mexico of textiles and apparel goods under a more liberal regime (Appendix 2(a) to Annex I).
Trade in Services
The services provisions under the Agreement are of considerable importance to the EFTA States. The general services section covers all four modes of service supply, as defined under the WTO GATS (Article 19), as well as all services sectors – including maritime services, financial services, telecom, distribution, energy, audiovisual tourism and environment - with the exception of air transport.
A so-called standstill obligation (i.e., a prohibition on the introduction of new or more restrictive measures affecting market access) (Article 24) took effect as of the entry into force of the Agreement, securing that services suppliers from the EFTA States gain access to the Mexican market on an equivalent basis with that enjoyed by suppliers from Mexico’s preferential trading partners.
In the financial services sector, for which a separate section has been negotiated (Section III, Articles 28 to 43), another standstill obligation has been introduced (Article 34), and the Parties have listed measures maintained by them which are inconsistent with Article 29 to 33 (Article 34, Annex VIII) most of which are subject to further elimination starting three years after the entry into force of the Agreement (Article 34, paragraph 3). The financial services section ensures that EFTA banks and insurance companies will be authorised to operate and establish directly on the Mexican territory on equal terms with financial service suppliers from Mexico’s other preferential partners.
The Parties have committed to liberalise substantially all trade and service sectors, in conformity with Article V of the GATS. The investment section (Section V, Articles 45 to 49) mainly provides for the liberalisation and protection of certain payments and transfers related to foreign direct investment (Article 46), and for investment promotion between the Parties (Article 47).
The investment section is subject to a general review clause (Article 49).
Protection of Intellectual Property (IPR)
The Chapter on protection of intellectual property rights (Chapter VI, Article 69 and Annex XXI) covers, inter alia, patents, trademarks and copyright and geographical indications. The level of protection in certain areas goes beyond what is stipulated under the WTO Agreement on Trade Related aspects of Intellectual Property, taking into account the principles of most favoured nation treatment and of national treatment. The Agreement contains provisions regarding geographical indications.
The Chapter on government procurement (Chapter V, Articles 56 to 68) is the most comprehensive concluded by the EFTA States in this field with any partner.
The EFTA States and Mexico grant each other non-discriminatory access to procurement markets for goods, services and public works at the central government level (Annex XII, section 1) and for entities operating in the fields of drinking water, electricity, urban transport, airports and ports (Annex XII, section 2).
Regarding competition (Chapter IV, Article 51 to 55), the agreement includes provisions on co-operation and exchange of information with the aim of ensuring and facilitating the enforcement of the Parties' respective competition laws.
The Agreement establishes a Joint Committee (Article 70) which supervises and administers the Agreement. Information exchanges and consultations can take place in the Joint Committee. The Joint Committee also takes decisions in cases provided for by the Agreement or makes recommendations. The Joint Committee is further to keep under review the removal of further barriers to trade between the EFTA States and further elaboration of the Agreement.
A separate Chapter on dispute settlement (Chapter VIII, Articles 71 to 78) aims at ensuring effective dispute settlement and implementation of the provisions of the Agreement.
Annexes, Record of Understanding and Joint Declarations
Joint Committee Decisions - English
|Decision||Subject||Adopted||Entry into force|
|No. 5/2010||Technical Adaptations to Annex XIII - Government Procurement: Covered Goods||07.05.2010||01.05.2012|
|No. 4/2010||Amendment to Annex IV - Products for Animal Feeding||07.05.2010||01.05.2012|
|No. 3/2010||Technical Adaptations to Appendix 2(a) to Annex I - HS lists||07.05.2010||01.05.2012|
|No. 2/2010||Technical Adaptations to Appendix 2 to Annex I - HS lists||07.05.2010||01.05.2012|
|No. 1/2010||Technical Adaptations to Appendix 1 to Annex I - Introductory Notes to List in Appendices 2 and 2(a)||07.05.2010||01.05.2012|
|No. 1/2008||Annex I - Direct Transport||23.09.2008||01.05.2009|
|No. 3/2002||Model Rules of Procedure for the Arbitration Panel||22.10.2002||22.10.2002|
|No. 2/2002||Technical adaptations to Annex I||22.10.2002||01.01.2003|
|No. 1/2002||Rules of Procedure of the Joint Committee||22.10.2002||22.10.2002|
For EFTA-Mexico trade statistics, see EFTA Trade Statistics Tool