MEXICO AND JAPAN SIGN FREE TRADE AGREEMENT
On 17 September, Mexico and Japan signed a free trade agreement following 18 months of intense negotiations. Mexico hopes the deal will ease its reliance on the US, which currently absorbs 90 percent of Mexico’s exports, while encouraging Japan to open more factories in Mexico to revive an assembly-for-export industry that has been dented by Chinese growth and a US economic downturn. Japan, on the other hand, is anticipating that the pact will reduce and eventually eliminate Mexican tariffs on electronics, auto imports and steel, while enabling Japanese companies with Mexican factories to have tariff-free access to Mexico’s other free trade partners.
Japanese Prime Minister Junichiro Koizumi, at the National Palace in Mexico City to sign the agreement with Mexican President Vicente Fox, said that the accord "will be for our mutual benefit, and the benefits will be shared with the countries of North America, Central America and even South America". Japan will be granted tariff-free auto imports for up to five percent of the Mexican market, up from the current three percent, and tariffs will be gradually eliminated over six years. The pact is Japan’s second such agreement, after an agreement with Singapore. Mexico has 11 free trade agreements with 42 countries and expects its exports to Japan to increase by more than ten percent a year under the pact. The Mexican President said the pact "will mark the beginning of a new era … to increase trade and investments". He added that with the signing of this new agreement, the two countries have each gained a strategic partner - Mexico would become a bridge to North and South America for Japan, and Japan would become Mexico’s bridge to Asia. Of Mexico’s US$165.4 billion in exports last year, only US$605.8 million went to Japan, with US$149.6 billion going to the US, according to Mexico’s Economy Department.
"Mexico, Japan Signing Free Trade Deal," ASSOCIATED PRESS, 17 September 2004; "Mexico and Japan Sign Free-Trade Accord," EFE NEWS, 17 September 2004.
ASBESTOS SPARKS CONTROVERSY AT ROTTERDAM CONVENTION MEETING
Ministers and officials from over 100 countries are meeting in Geneva from 20-24 September for the first ministerial conference of the Rotterdam Convention. The Rotterdam Convention, officially the Rotterdam Convention on the Prior Informed Consent (PIC) Procedure for Certain Hazardous Chemicals and Pesticides in International Trade, entered into force on 24 February this year. It enables member countries to add chemicals to the Convention’s list of toxic chemicals by consensus voting. Chemicals on the list can only be exported from one country to another with the permission of the government of the importing state. At the Geneva meeting 14 new toxic chemicals, including a lead additive for petrol, were added to the list. However chrysotile, the most common form of asbestos, was again blocked from the list after producing countries, including Canada and Russia, blocked its inclusion (see BRIDGES Trade BioRes, 28 November 2003).
Chrysotile asbestos accounts for 94 percent of the commercial asbestos production and is known to cause cancer. Its exclusion from the list led to strong reactions from civil society groups such as the WWF. "Canada and Russia’s objections to listing chrysotile asbestos are embarrassingly self-interested, protecting domestic exporters interested in selling this dangerous chemical abroad," said Clifton Curtis, director of WWF’s Global Toxics Programme. The Canadian government defended its action, saying "If added to (the list), that might be perceived by some countries as a signal to ban chrysotile". Canada lost a dispute at the WTO in 2001, which it had brought against France’s ban on chrysotile (see BRIDGES Weekly, 13 March 2001). Chrysotile asbestos is the first chemical to face significant opposition at the Rotterdam Convention and has led Parties to express concern about potential conflicts between environmental and health concerns on the one hand and economic and trade concerns on the other hand.
"Treaty Curbs Trade in More Dangerous Chemicals," REUTERS, 22 September 2004; "Canada blocks asbestos type from global toxic list," REUTERS, 22 September 2004; "Up to 15 hazardous chemicals and pesticides to be added to trade watch list," PIC ROTTERDAM CONVENTION, 16 September 2004.
WEST AFRICA AGREES TO LAUNCH MONETARY ZONE BY JULY 2005
At a summit on 13 September held in the Guinean capital Conakry, the heads of state of the five countries party to the West African Monetary Zone (WAMZ) — Ghana, The Gambia, Guinea, Nigeria and Sierra Leone — agreed to launch a monetary union by 1 July 2005. The ministers also decided to locate the headquarters of the West African Financial Supervisory Authority in Nigeria, the WAMZ secretariat in Guinea and the West African Central Bank in Ghana. The launch had already been delayed by two years, but will now go ahead in tandem with efforts to facilitate intra-regional trade and investment. Many of the countries have had problems with weak currencies, and the WAMZ hopes to create a currency that eventually will merge with the CFA franc currency shared by former French colonies in West and Central Africa to create one stable currency.
ICTSD reporting; "Five West Africa Countries get into second monetary zone," GHANAWEB.COM, 13 September 2004; "WEST AFRICA: Plans for 2005 launch of new regional currency confirmed," IRIN NEWS, 3 September 2004.