Mexico to put new trade accords on back burner

Reviewed by Hitoshi URABE

Article:
"Mexico to put new trade accords on back burner"
(Reuters) Forbes
http://www.forbes.com/home_asia/newswire/2003/11/12/rtr1146026.html

Comments:

This is an interesting story indeed. It reports that the Mexican Economy Minister Fernando Canales said that they would slow down the process of other FTA negotiations after a deal is struck with Japan.

It was a month ago when the Mexican President Vicente Fox visited Japan, with the hope, of himself and Japan's Prime Minister Koizumi, to agree to an FTA accord between the two countries. In fact, the senior officials from both countries, including those of ministerial levels, worked through the night prior to the formal meeting of the two leaders, which was a rare event in itself. Even more unusual was the fact that they could not come up with an agreement through this vigorous negotiation, even well being aware that the success could have been lauded as a political accomplishment in either of the countries.

According to the follow up reports of the failed negotiation, Japan was ready to give way to just about every demand Mexico had raised, especially in the agricultural sector, but Mexico at the last moment brought on the table a new issue with regard to orange juice trade. Some Japanese bureaucrats condemned Mexicans for their raising a new issue at the last minute, but more objective observers suggested that it was an incident between naive Japanese officials in such dealings against the canny Mexicans who had the experience of over 30 those discussions, including the formidable NAFTA.

The failure was taken not lightly by the Japanese. The business sector virtually yelled at the negotiators for their impotence in handling the affair, as for them at stake was the real possibility of losing their business in Mexico. Most of the ordinary people, too, knowing that Japan cannot live without facilitating trade with other countries, were disappointed. People also have long been aware of who the villains are in always bringing about failures in trade negotiations. They were the farmers and all the vested interest surrounding them.

Accordingly, farmers and lawmakers backed by them were about to be cross-fired when the Farming Ministry, considered being the core of the villains, announced that they, too, believe promotion of FTA's is necessary, and in order to accomplish it farming policies may need to be changed. In retrospect, the failure in October could have functioned as a catalyst in finally making the vested interest realize that they just cannot go on like this, and some sort of reform is finally necessary.

Talks with Mexico are reported to resume toward the end of the year, and the authorities involved are working hard to prepare for it. In fact, as so many have realized the importance of FTA's, and that with Mexico, as a symbol as well as in application, the concern now is who is leading the preparations. The traditional habit of Japan's bureaucrats, the compartmentalization of administration, apparently have emerged, and now the bureaucrats are arguing who is to take the lead among themselves instead of tackling the real issues. Somewhere along the line a strong lead by the Prime Minister's office is inevitable, and probably warranted.

Having said all this, considering the shrewdness of Mexicans over international negotiations, it could be quite possible that the announcement by Minister Fernando Canales is a part of their tactic to entice Japan into an early restart of the negotiation. But then, even if that were the case, it would doubtlessly be a benefit for Japan to conclude the deal with Mexico swiftly, to set a precedent for negotiations with other countries to follow.