Japan, Mexico to Discuss Free Trade Agreement

Mexico and Japan said Sunday that they will begin negotiating a wide-ranging free trade agreement in November to help end nearly a decade of static trade growth between the two nations.

In a joint statement on the sidelines of the Asia Pacific Economic Cooperation leaders’ summit in Los Cabos, Mexico, Japanese Prime Minister Junichiro Koizumi and Mexican President Vicente Fox said they hoped to complete talks in a year.

“In order that Japan and Mexico will benefit, without delay, from the strengthening of the bilateral economic partnership, the two leaders shared the view that the two governments should start official negotiations for the agreement in November 2002 in Tokyo,” they said.

Since Mexico entered the North American Free Trade Agreement with the United States and Canada in 1994, Japan’s share of Mexican imports has fallen to 4.8% of the total, from 6%. Mexican sales to Japan fell to 0.3% from 1.6% of Japanese imports.

A free trade agreement with Japan would give Mexico access to the world’s second-largest economy and provide Japan with another gateway to the coveted U.S. market.

“Japan can buy a great quantity of agriculture and livestock products from us. We are complementary in this sense; they send us industrial products, opening markets for these products, and we will be able to send them a great quantity of agricultural products,” Mexican Economy Minister Luis Ernesto Derbez told Reuters.

Far from a match made in heaven, a successful Mexico-Japan free trade agreement would have to overcome opposition from powerful political lobbies over rules for movement of farm goods.

A face-off between Japan’s powerful farming lobby, which traditionally opposes any competition, and struggling Mexican farmers, desperately in search of new markets, could turn nasty.

Mexican farmers, many in crisis as prices for their goods fall below the costs of production, accuse the government of having ignored their needs when Mexico joined NAFTA in 1994, with Canada and the United States.

Opposition legislators recently called on Fox to renegotiate the treaty’s agriculture chapter.

Japanese officials at the APEC leaders’ summit said there is no intention of excluding agriculture from the free trade talks with Mexico, although one government spokesman did say it “could be one field” of difficulty in negotiating a deal.

Tadakatsu Sano, a senior international affairs official for Japan’s economy and trade ministry, said that 20% of the goods Mexico already exports to Japan are agricultural and that it would be impossible to exclude the issue from talks.

Mexico’s lead government trade negotiator, Angel Villalobos, said negotiators agree that no sector will be excluded.