RESTRICTEDWORLD TRADE
ORGANIZATIONWT/REG124/M/1
18 June 2003
(03-3249)
Committee on Regional Trade Agreements
Thirty-Fourth Session
EXAMINATION OF THE FREE TRADE AGREEMENT
BETWEEN ISRAEL AND MEXICO
Note on the Meeting of 3 April 2003
Chairman:  Mr. S. Dalela (India)
1. The meeting was convened in document WTO/AIR/2056/Rev.1.
2. Under Agenda Item C.XVII of its Thirty-Fourth Session, the Committee on Regional Trade
Agreements (hereinafter CRTA or the Committee) t ook up the first round of examination of the Free
Trade Agreement between Israel and Mexico.  The following topics were discussed:
A. General Remarks
B. Section I – Background Information on the Agreement
C. Section II – Trade Provisions
3. The Chairman noted that it was the first round  of examination of the Free Trade Agreement
between Israel and Mexico.  The Agreement had been signed on 10 April 2000 and had entered into
force on 1 July 2000.  It had been notified to the WTO on 8 March 2001 as document
WT/REG124/N/1, with the text of the Agreement appearing in document WT/REG124/1 and the
Standard Format in WT/REG124/3.  With respect to the latter document, the Chairman noted that the
date of entry into force of the Agreement under Section I.1 should read 1 July 2000 rather than 1 July2001.  He proposed to organize the examination by first asking the Parties and other Members for
general comments and then turn to the specifics of the Agreement, using the Standard Format to guide
the debate.  He recalled the terms of reference for the examination, adopted on 14 March 2001 by the
Council for Trade in Goods, as contained in document WT/REG124/2.
A. G
ENERAL REMARKS
4. The representative of Israel, speaking also on behalf of the representative of Mexico,
informed the Committee that the Agreement, which had entered into force on 1 July 2000, clearly
reflected the mutual desire of the Parties to d eepen and strengthen existing trade relations and
economic cooperation between the two countries.  It was the view of Israel and Mexico that, by
establishing a legal framework for eliminating tr ade barriers, the Agreement also reflected the
consistent trade policy of their respective governments at the bilateral, regional and multilateral levels
in furtherance of trade liberalization.  He said that  the Parties saw the removal of obstacles to trade as
an important step to expanding world trade.  In ne gotiating the Agreement, the need to ensure the full
compliance with WTO obligations had always been taken into account, and particularly with Article
XXIV of the GATT 1994.  In many articles of the Free Trade Agreement, specific agreements of theWTO had been incorporated into the text.  The Agreement had been duly notified to the WTO after
completion of the internal approval procedures by the Parties, on 22 February 2001.  In accordance
with Article XXIV of GATT 1994, the Agreement covered substantially all trade between the Parties.WT/REG124/M/1
Page 2
Most of the tariffs on industrial products had been removed immediately upon entry into force of the
Agreement and for the rest in a gradual process, with a final phase-out by 1 January 2005.  For
agricultural and processed agricultural products, which represented a small share of imports, the
Agreement covered a substantial part of existing and potential trade between the Parties.  Moreover,
the Agreement provided for the possibility of gran ting further concessions in trade in agricultural
products.  As for the industrial sector, 100 per cent coverage was assured by the Agreement and full
duty-free treatment for all products would be achieved within two years.  The Agreement used clear
rules of origin that were in compliance with Annex II of the Agreement on Rules of Origin of the
WTO.  The Agreement did not create any new barriers to trade from third countries, nor did it make
duties or other regulations of commerce any higher than before the formation of the free-trade area.  It
was the view of the Parties that the Agreement enhanced and complemented the multilateral system
and added to the liberalization achieved under the GATT and the WTO.  He concluded by saying thatthe Agreement under examination was a simple, straightforward trade agreement within the terms of
Article XXIV.  He assured the Committee that the State of Israel and the United Mexican States, had
been, and remained, dedicated to being as forthcoming as possible in supplying Members of the
Committee with detailed and timely information rega rding the Agreement as it deemed necessary.  He
looked forward to proceeding expediti ously with the examination process.
B. S
ECTION I - B ACKGROUND INFORMATION ON THE AGREEMENT
5. The representative of the United States remarked  that the Agreement had been notified to the
WTO with a substantial delay.  She asked the Parties whether they could comment on the reasons for
such delay since that might shed some light on the discussions being held in the Negotiating Group on
Rules on the reasons preventing the timely notification of  RTAs by Members.  The representative ofIsrael was of the opinion that the CRTA was not the appropriate forum to discuss issues pertinent to
the Negotiating Group on Rules.  With respect to the Agreement, he was not aware of the reasons forits late notification, but he assumed that an oral announcement of the Agreement had been made
before the written notification.
6. Referring to scope, the representative of Australia expressed concerns over the very limited
coverage of agriculture under the Agreement as provided by the concessions contained in Annexes
2-03.4(a) and 2-03.4(b).  She questioned whether an agreement that excluded a significant tradable
sector to such an extent could meet the test of GATT Article XXIV for coverage of substantially all
trade.  She added that her delegation was interested in knowing from the Parties whether any further
liberalization of the agricultural sector had been negotiated pursuant to Article 2-03(5) of the
Agreement.  The representative of the United States shared the concerns expressed by the
representative of Australia.  She reiterated a comment made earlier in the Session as to the basis in
GATT Article XXIV for having preferential duties apply as opposed to MFN rate or elimination.  She
commended the Parties for the information provided in the annexes to the Agreement; however, she
wondered whether they could also provide information on the percentage of tariff lines covered by the
Agreement.  The representative of Israel considered some of the questions as being of a systemic
nature; especially on the issue of tariff lines, his delegation was of the view that the information
required from the Parties was the percentage of trade covered and not the percentage of tariff lines.
He indicated that the Agreement covered over 97 per cent of the Parties' mutual trade, of which a very
high percentage concerned agricultural trade.  Furthermore, he pointed out the existence of a clause in
the Agreement allowing for the further opening up of the Parties' agricultural sectors.  He added that
the questions posed would be passed on to the Part ies' respective authorities for further answers and
trade data.  He stressed, however, that systemic issues ought not to be brought up in the framework of
that discussion.WT/REG124/M/1
Page 3
C. SECTION II - T RADE PROVISIONS
7. The representative of Japan noted that the quotas on tariff concessions contained in Annexes
2-03.4(a) and 2-03.4(b) to the Agreement were described at either the four-six-or eight-digit level of
the Harmonized System.  He said that his delegation was interested in receiving further details on the
tariff lines on which the quotas were set.  Furthermore, he asked whether more information on thoseissues was available on either the Israeli or Mexican government web sites.  The representative of
Israel asked that the question be submitted in writing.  He reiterated, however, that further data on
coverage of the agricultural sector would be submitted to Members, which would clarify theconcessions being given in that sector.  As for on-line information, he was sceptical that further
information on those issues would be found on the Israeli's government web site, but said he would
check.  The representative of Mexico added that her delegation would provide joint answers with
Israel to the questions by Japan and other Members.
8. The representative of Korea sought clarification on the nature of the quantitative restrictions
referred to in Section II:2.2 of the Standard Format and contained in Annex 2-02 to the Agreement.
The representative of Israel was of the opini on that Annex 2-02 was self-explanatory; however, he
would pass on the question to his authorities for further explanation.
9. With respect to rules of origin, the representative of the United States noted that the
Agreement referred to both regional content and bilateral cumulation between the producers from
Mexico and Israel.  She was interested in k nowing whether content from any country other than
Mexico and Israel would be cumulated into the origin of a product in considering whether it was
eligible.  The representative of Israel asked that the question be submitted in writing.
10. The Chairman said that the first round of examination of the Free Trade Agreement between
Israel and Mexico had allowed the Committee to clarify a number of issues, but some remained
pending.  He asked delegations to submit questions to the Secretariat by the end of July 2003 and for
the Parties to submit replies no later than the end of October 2003.
11. The Committee took note of the comments made.
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