Policy Memo

Policy Memo to Francisco de Rosenzweig
Analyzing Mexico’s role in TAFTA 27 May 2013

Currently on the Transatlantic Free Trade Area also known as TAFTA or TTIP (Transatlantic Trade and Investment Partnership) is a proposed free trade area between Europe and the United States, the original trade was proposed in the 90s, but it in 2007 they consider making it happen again but it finished in nothing.
In March 2013, President Barack Obama, told that it was a priority to his government to made TAFTA happen, so he announced that the United States would submit a formal request to start negotiations with de European Union, setting July 2013 as the deadline to reach an accord on the start of the negotiation.
Before all the information and relevance of TAFTA the United States efforts were made in TPP (transpacific partnership) that includes de most developed countries in Asia and the most important in America.
The TAFTA is a Free trade Agreement, supposedly to be between all the countries in de European Union, the United States, Canada, Mexico, EFTA and some other countries Turkey that doesn’t be part of EU.
United States as part of NAFTA is seeking to have his partners in the new Free-Trade-Agreement making them stronger and with a more ambitious position. Mexico and Canada have an implied risk and opportunity if they be part of TAFTA, because it has a very high grade of discipline to make and make the objectives that the TAFTA will need to make it happen.
In this TAFTA Mexico plays a different role that with NAFTA agreement which is with his principal commerce partner USA and Canada, so USA which is one of the principal countries in TAFTA, Mexico knows the benefits of this type of agreements.
Mexico as an exporting country, may be benefited maintaining the FTA with the EU have concluded an Economic Partnership, Political Coordination and Cooperation Agreement in 1997, which included trade provisions that were developed in a comprehensive Free Trade Agreement that entered into force in October 2000 for the part related to trade in goods - and in 2001 for that related to trade in services, so Mexico will be benefited with being part of TAFTA but it isn’t new for Mexico to have FTA with the European Union.
From another perspective in a German study about the position that the countries will have if TAFTA happens, including cutting-edge disciplines, Mexico would have an effect equivalent to a welfare loss of 7.2 percent.
Under the initial agreement, the TAFTA should include disciplines on non-tariff barriers, small and medium enterprises, transparency, competition policy, intellectual property rights and relevant global opportunities, among others.
The relevance of TAFTA can be seen with this kind of numbers, trade area between the United States and the European Union would represent 50% of global GDP, with only 11.8% of the global population.
Mexico can approach for TAFTA like when Mexico begin in NAFTA, but there is a huge difference because Mexico’s macroeconomic stability in this moment implied that the risk in Mexico is so much lower than in 1994, also the industrialized part of Mexico is more competitive worldwide now than It was in the begging of NAFTA, so Mexico is more prepared for this kind of globalized agreement, that make all the countries compete in a more fairly condition.
I think that Mexico should find a way to be part of the Transatlantic Free Trade Agreement, the ideal way to be part of the TAFTA is if the members of NAFTA enter the TAFTA as one unit, so they can be supported between them and can watch for the interest that they have.

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[ 1 ]. http://www.bmwi.de/English/Redaktion/Pdf/dimensions-and-effects-of-a-transatlantic-free-trade-agreement-between-the-eu-and-usa,property=pdf,bereich=bmwi2012,sprache=en,rwb=true.pdf