The long awaited Mexico-Japan EAA, finally came into effect today, April 1st, 2005.1 With a wider scope than a free trade agreement, the Mexico-Japan EAA not only provides for a trade and investment liberalization environment, but also for a bilateral cooperation framework…. Japan has finally open up to the Americas and Mexico is the bridge, following is how:

I. Trade Liberalization

Mexico-Japan EAA provides Mexico with preferential market access to the world’s third largest economy, after the U.S.A. and the E.U. with whom Mexico already has trade agreements. Thus, its Trade in Goods General Rules establish the progressive elimination and phase-out of import duties applicable to Mexican and Japanese originating goods, pursuant to which, as of today import duties corresponding to 91% of the Harmonized Tariff System have been eliminated. This means that a variety of products that are sensitive to Mexico’s productive sectors, such as the agricultural, fishing and industrial industries may be imported into Japan with a 0% duty rate, such as the following:

Green coffee

Mangoes

Wine

Electrical and electronics manufactures

Lemons

Pectin

Tobacco

Footwear, leather, apparel (under quota)

Beer

Fresh broccoli

Egg

Orange, orange juice (under quota)

Avocado

Tomato

Papaya

Pork, chicken, beef (under quota)

Pumpkin

Garlic

Fresh and canned yellow-fin tuna

Tomato juice and tomato sauces (under quota)

Asparagus

Onion

Shrimp

Honey (under quota)

Tequila

Aubergine

Octopus, molluscs and crustacean

 

Products such as grapes, toasted coffee, melons, sauces, frozen strawberries, nuts will be liberalized in 5 years, and import duties applicable to bananas, prepared vegetables, jam’s will be eliminated in 10 years.

Therefore, with such an aggressive liberalization on the part of Japan, Mexico now enjoys a preferential duty advantages mainly over the U.S.A. Brazil and Asian countries.

On the other hand, Mexico granted immediate preferential access to Japanese originating products corresponding to only 40% of the Harmonized Tariff System, which include products which are not manufactured in Mexico and inputs for the domestic industry, such as high-tech products, i.e. heavy machinery, capital goods, chemicals, computer systems, consumer electronics, among others. Special treatment was negotiated by Mexico in connection with products which are sensitive for the domestic industry, such as the automotive and steel sectors.

Further, as part of its trade and investment liberalization framework, the Mexico-Japan EAA sets forth rules of origin, customs procedures, sanitary and phytosanitary measures, standards and related measures, safeguards, cross-border trade in services, investment, temporary entry for business persons, competition policies, dispute settlement and government procurement provisions.

Please note that in connection with the foregoing, various implementation bodies have been published in the Federal Official Gazette as follows:

March 23rd, 2005

  • Foreign Trade General Rules for 2005

March 31st, 2005

  • Resolution for the implementation of Mexico-Japan EAA’s customs rules.

April 1st, 2005

  • Accord which establishes the Origin Certification Rules of the Mexico-Japan EAA;
  • Accord which sets forth the Uniform Regulations of the Mexico-Japan EAA; and
  • Various accords establishing import quotas under the Mexico-Japan EAA.

II. Bilateral Cooperation

In connection with bilateral cooperation matters, Mexico-Japan EAA sets forth provisions intended for the strengthening of both countries’ economic relationship, for such purpose, in addition to the trade and investment liberalization framework, Mexico-Japan EAA further establishes provisions dealing with various matters such as trade and business development, science and technology, labour education and training, agriculture, intellectual property and business improvement measures.

We would be pleased to provide you with detailed information on the foregoing, as well as with an analysis of how your business may take advantage of Mexico-Japan EAA.

Footnotes

1. Published on the Federal Official Gazette on March 31st, 2005.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.