MEXICO CITY: Mexico is confident that an agreement on a major free-trade pact spanning the Pacific Ocean can be reached in late July in what would be a milestone with the potential to reshape economic ties between Asia and the Americas, a top government official said.
“Around 10% of issues are still to be agreed, but I hope we can seal an agreement in a final round of negotiations at the end of the month,” Economy Minister Ildefonso Guajardo said in an interview. He said leaders could sign an agreement before the end of the year.
The Trans-Pacific Partnership would lower trade barriers and set new standards for business investment among 12 countries of the Pacific rim, including the U.S., Japan, Canada, Australia, Mexico, Chile and Singapore.
The group would have combined economic output of about $28 trillion, or around 39% of global gross domestic product. Some experts consider the partnership to be the most ambitious trade deal since the North American Free Trade Agreement was signed in 1993, linking the U.S., Canada and Mexico in a free-trade zone.
One of the main outstanding issues is the exact terms for intellectual-property protection, Mr. Guajardo said, as the U.S. has been pushing for stronger copyright protections and broader protection for patents.
Final details on access to several politically sensitive markets such as the U.S. and Japanese agricultural sectors and on some investment agreements among participants have also yet to be resolved, he added.
The negotiations recently accelerated after U.S. President Barack Obama was granted in late June wide powers to negotiate a final deal, allowing him to put the agreement before Congress for an up-or-down vote without amendments.
“That was a very important step. Many of the countries, particularly the Asians, were waiting for this to happen before making their final offers,” Mr. Guajardo said.
The Trans-Pacific deal could yield annual global income gains of $295 billion, according to a report by the Peterson Institute for International Economics, although some detractors in the U.S. have argued that the agreement will translate into lower wages and job losses.
As China isn’t part of the agreement, some experts also see the deal as a geopolitical move by the U.S. to bolster its presence in Asia and balance China’s power in the Pacific.
For Mexico, the Pacific trade deal could strengthen its position in fast-growing Asian markets and increase limited trade exchanges with the region. In 2014, more than 80% of Mexico’s nearly $800 billion in total trade was with the U.S., Canada, Europe and Latin America.
Aside from Nafta, Mexico has signed free-trade agreements with 46 countries, including the European Union and many Latin American countries. But in Asia, Mexico’s only trade agreement is with Japan.
“Our strategic alliances in Asia have been limited to Japan. The Trans-Pacific pact would allow us to change that,” Mr. Guajardo said.
Mexico currently exports mostly minerals, oil and food to its main Asian trade partners China, Japan and South Korea. The bulk of Mexican imports from those markets are components and accessories for local automotive and electronic goods assembly.
