Partial Scope Agreement between Mexico and ecuador (GOODS)

Note on the meeting of 10 November 2021

Chairman: H.E. Dr Muhammad Mujtaba Piracha (Pakistan)

1.  The 15^th Dedicated Session on Regional Trade Agreements (RTAs) of the Committee on Trade and Development (CTD) was convened in document WTO/AIR/COMTD/RTA/10/Rev.1 of 29 October 2021. Under item D (I) of the agenda, the Committee considered the Partial Scope Agreement between Mexico and Ecuador (Goods) (WT/COMTD/RTA3/N/1, WT/COMTD/RTA3/1, WT/COMTD/RTA3/2). The agreement was concluded in the context of the 1980 Treaty of Montevideo (TM80) of the Latin American Integration Association (LAIA). The present document contains the minutes relating to the consideration of this agreement.^[1]

2.  The Chairman said that the Partial Scope Agreement between Mexico and Ecuador was notified under paragraph 4(a) of the Enabling Clause by Mexico on 23 July 2019 in document WT/COMTD/RTA3/N/1. The factual presentation on the agreement – document WT/COMTD/RTA3/1 dated 14 July 2021 – had been prepared by the Secretariat on its own responsibility, and in full consultation with the parties. Written questions from the United States, as well as the replies from the parties, were circulated in document WT/COMTD/RTA3/2.

3.  The representative of Mexico indicated that she would be making a statement on behalf of the parties. She began by expressing appreciation to the Secretariat for the preparation of the factual presentation. She said that the bilateral relationship between Ecuador and Mexico, as well as relations with Latin America and the Caribbean at the regional level, had been crucial to the development of these countries' trade policy strategies. Ecuador currently ranked 13^th among trading partners in the region, and Mexico was Ecuador's 6^th most important trading partner. The agreement between Mexico and Ecuador was signed on 30 April 1983 and entered into force on 1 May of the same year. The agreement was established in the context of the TM80, with the objective of integrating into LAIA the historical preferential tariffs of the Latin American Free Trade Association. The agreement provided economic agents with certainty and security in their commercial operations through its provisions relating to trade in goods. Preferential treatment under the agreement was granted through margins of preference (MOPs) relative to the most-favoured-nation rates. The originating products being granted preferential treatment and the corresponding MOPs were contained in annexes I and II of the agreement. Ecuador granted preferences for 282 tariff lines and Mexico for 326 tariff lines at the eight-digit level of LAIA's 1996 Naladisa tariff nomenclature. The 10^th additional protocol to the agreement included additional preferences granted by Ecuador in respect of 21 products, which included an MOP of 80% for specific minerals, chemicals and synthetic rubber; and an MOP of 100% for pneumatics. In turn, Mexico granted an MOP of 100% on seven tariff lines. With regard to rules of origin, annex III of the agreement established classification criteria for the place of origin, as well as the procedures for making declarations and obtaining certification and corresponding origin verification. Moreover, the agreement provided for the preservation of tariff preferences and non-tariff restrictions. It also included safeguard clauses, a section on withdrawal of concessions, differential treatment, and a section on institutional matters such as duration, accession, withdrawal, evaluation, review, administration of the agreement and general provisions. She was also pleased to inform the Committee that Mexico and Ecuador were currently working on updating and consolidating the agreement. In particular, the parties were working on a concrete and ambitious free trade agreement with next-generation disciplines that would benefit both economies. The purpose of the negotiations was to increase the flows of trade in goods and services, as well as two-way investment, with a view to continuing to provide certainty to the economic operators involved in trade between the two countries. In closing, she indicated that she wished to reiterate the parties' commitment to continue enhancing the ties of cooperation and friendship that bound the two nations, based on commonalities that went beyond trade.

4.  The representative of Ecuador thanked Mexico for its intervention. She said that she wished to underscore the great importance her country attached to strengthening its trade ties with Mexico. She also expressed her appreciation for the questions that had been posed, and for any other questions that delegations may have.

5.  The representative of the European Union thanked the parties for the notification and the Secretariat for the preparation of the factual presentation.

6.  The representative of the United States expressed appreciation to Mexico and Ecuador for the presentation of their agreement, and for the responses provided to her delegation's questions. She also noted the value that her delegation attached to the transparency exercise.

7.  The Chairman said that oral discussion of the Partial Scope Agreement between Mexico and Ecuador could be concluded in accordance with paragraph 11 of the Transparency Mechanism for RTAs (RTA TM). Follow-up questions by Members would need to be submitted in writing to the Secretariat within one week, by 17 November 2021. The parties would then be given two weeks to submit written replies, by no later than 1 December 2021. In accordance with paragraph 13 of the RTA TM, all written submissions as well as the minutes of the present meeting would be circulated promptly in all WTO official languages, and would be made available on the WTO website.

8.  The Committee took note of all interventions.

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