Mexico's Path Towards the Free Trade Agreement with the U.S.

1. Presidents Bush and Salinas agreed on June 10, 1990, to begin comprehensive preparations which will eventually lead to the negotiation of a U.S.-Mexico Free Trade Agreement (FTA).They defined an FTA as follows: a process of gradual and comprehensive elimination of trade barriers between the United States and Mexico, including: (1) the fullphased elimination of import tariffs; (2) the elimination or fullest possible reduction of nontariff trade barriers, such as import quotas, licenses, and technical barriers to trade; (3) the establishment of clear, binding protection for intellectual property rights; (4) fair and expeditious dispute settlement procedures; and (5) other means to improve and expand the flow of goods, services, and investment between the United States and Mexico.See Kal Wagen-[Vol.23:1 consumer market made it the obvious nation with whom Mexico should establish a foreign trade relationship.III.PRIOR MEXICAN TRADE Of all Mexican trade agreements initially negotiated, none was as economically promising as the trade relationship with the U.S. Despite the historical indifference which had characterized trade relations between the two nations, 17 the U.S.-Mexican relationship was dramatically altered by 1982.A series of bilateral trade agreements and laws diminished many of Mexico's trade barriers.18 For instance, the U.S. and Mexico signed the U.S.-Mexican Understanding on Subsidies and Countervailing Dutiesin 1985.19While its focus was narrow, the agreement established the groundwork for Mexico's expansion into the international arena.By 1987, Mexico had imports valued at $12.2 billion. 2 0 In 1988, this figure grew to $18.9 billion, and by 1989, the figure escalated to over $35 billion, of which $24.7 billion were imports from the U.S. alone.1 Total United States-Mexico trade for 1989 surpassed $52 billion.22 With such a large volume of imports, it is no surprise Hous.J. OF INT'L L. 291, 292-94 (1990).17.See Ogarrio and Castro, supra note 11, at 226.Until 1982, Mexico had maintained a steadfast policy of inward development, which was finally relinquished due to a drastic economic crisis.Id.This crisis caused a 50% decrease in the standard of living throughout Mexico.Id. 18. See generally Foreign Trade Law, infra note 26; Reglamento contra pr~cticas desleales de Comercio Internacional [Regulations Against Unfair Trade Practices], D.O., Nov. 25, 1986, amended by Decreto por el cual se reforma y adiciona el reglamento contra pricticas desleales de comercio internacional, D.O., May 19, 1988 ; Decreto de promulgaci6n del Acuerdo relativo a la Aplicaci6n del Articulo VI del Acuerdo General sobre Aranceles Aduaneros y Comercio [The Antidumping Code of 1979], D.O., Apr.21, 1988 (executed on July 24, 1989); Decreto de promulgaci6n del Acuerdo sobre Procedimientos para el Trimite de Licencias de Importaci6n [The Code on Import Licenses of 1979], D.O., Apr.21, 1988 (executed on July 24, 1979); Decreto de promulgaci6n del Acuerdo relativo a la Aplicaci6n del Articulo VI del Acuerdo General sobre Aranceles Aduaneros y Comercio [Code on Customs Valuations of 1979], D.O., Apr. 25, 1988.In addition, a decree reforming the General Import Tariff, issued in April 1986, diminished trade barriers by modifying tariffs and lowering duties.See Report of the Working Party on the Accession of Mexico [hereinafter Working Party Report], para.16, GATT Doc.L/6010 (July 15, 1986) in BASIC INSTRUMENTS