In a bid to expand global commerce, Mexico hopes for a trade deal between the North American Free Trade Agreement (NAFTA) and the European Union that could leverage the economic powers of both unions and consolidate trade deals already in the works.
Mexico currently has a free trade deal with the EU, while Canada and the United States – the other two nations in NAFTA – are currently in talks their own trade deals with Europe. A NAFTA-EU trade deal would leverage the economic power of the NAFTA nations and separate deals wouldn’t “take full advantage of the economies of scale and scope that have resulted from NAFTA,” said Mexican Foreign Minister José Antonio Meade, according to Bloomberg News.
Mexico’s suggestion of a joint trade deal may be a maneuver to parry a looming agreement between the U.S. and the 27-nation EU that President Barack Obama promised in his State of the Union address. Despite varying ideas on farm subsidies, health protections and regulatory standards, a deal between the U.S. and the EU could add $111.7 billion a year to the bloc’s struggling economy that has been hit hard by the global recession and bailouts in Greece, Spain and Cyprus.
The EU hopes that the accord with the U.S. will lower tariffs, regulatory barriers and expand access in investment, services and public procurement with the expectation of raising trade and investment between the bloc and the U.S that was valued at $4.5 trillion in 2011.
Soon after taking office in December, Mexican President Enrique Peña Nieto met with José Barroso, head of the European Commission, and European Union President Herman Van Rompuy, where they agreed to update the country’s trade agreement with the EU that took effect in 2000.
Canada also began talks with the EU, with Prime Minister Stephen Harper claiming earlier in March that significant steps have been made – even as some details still need to be ironed out.
NAFTA took effect in 1994 amid much fanfare in the U.S. under then-President Bill Clinton and major protest in Mexico by the Zapatista rebel group. Mexico and Canada joined the U.S. last October in the Trans-Pacific Partnership that includes eight other nations in Latin American and Asia.
“It probably is the case that one can start by having the three bilateral agreements, but I think the region would benefit if at some point we keep in mind that a superior equilibrium can be reached if the negotiations were North America toward Europe rather than bilaterally each one of us with them,” Meade told Bloomberg.