Proposal for a Council Decision concerning the conclusion of the Interim Agreement on trade and trade related matters between the European Community, on the one part, and the United Mexican States, on the other part
Date: 1997-10-21
Institutions: European Commission
Subjects: Mexico, cooperation agreement (EU), economic relations, international relations, trade relations

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels,  21.10.1997 
COM(97) 525 final 

97/0281 (AVC) 

Proposal  for a 

COUNCIL  DECISION 

concerning the conclusion of the Interim Agreement on trade and trade related matters 
between the European Community,  on the one part, and the United Mexican States, on 
the other part 

(presented  by the Commission) 

EXPLANATORY  MEMORANDUM 

1.  By means of a decision  of 25 June  1996, the Council  authorised  the  Commission  to 
open  negotiations  with  Mexico with a view  to  concluding a new  political,  economic 
and trade agreement with Mexico, and approved  negotiating directives to that end. 

2.  The  said  negotiating  directives  expressly  anticipated  that  the  provisions  of  the 
agreement  falling  within  Community  competence  could  be the  subject  of  an  interim 
agreement between the Community and Mexico. 

3.  Negotiations  took  place  in  Brussels  on  10,  11 and  12  June  1997,  resulting  in  the 
draft  agreement  on  both  an  Economic  Partnership,  Political  Co-ordination  and  Co 
operation  Agreement  and  an  Interim  Agreement  on  Trade  and  Trade-related 
Aspects. 

4.  Negotiations  also  resulted  in  agreement  on  the  draft  Joint  Declaration  whereby  the 
parties  enter  into  a  political  undertaking  to  ensure  that  the  trade  and  trade-related 
aspects  included only  in the draft  Economic Partnership,  Political  Co-ordination  and 
Co-operation  Agreement  should be negotiated  in parallel  with those aspects  included 
in the draft  Interim Agreement on Trade and Trade-related  Aspects. 

5.  The  texts  were  initialled  on  23  July  1997  following  a  detailed  examination  by  the 

Council. 

6.  The  Interim  Agreement  on  Trade  and  Trade-related  Aspects  is  intended  to  effect 
advance  implementation  of  the  trade  and  trade-related  provisions  of  the  Economic 
Partnership,  Political  Co-ordination  and  Co-operation  Agreement  that  fall  within 
Community  competence.  This advance implementation  will ensure that both sides can 
commence  detailed  negotiations  with  a  view  to  achieving  at  the  earliest  possible 
opportunity,  the  objective  of  trade  liberalisation  established  in  the  Economic 
Partnership,  Political Co-ordination and Co-operation  Agreement. 

7.  The Commission  considers that the initialled  Agreement  conforms  to the  negotiating 

directives adopted by the Council. 

8.  The  Commission  considers  the outcome of the negotiations  to be  satisfactory  to both 
parties  and  proposes  that  the  Council  should  approve  the  results  of  the  negotiations 
and  should  initiate  the  procedures  for  the  signature  of  the  Interim  Agreement  on 
Trade  and  Trade-related  Aspects.  The  Commission  also  presents  a  proposal  for  a 
Decision by the Council to conclude the Agreement once it has been signed. 

9.  The  European  Parliament  will  be  asked  to  give  its  assent  to  the  Agreement  prior  to 

its conclusion. 

10.The Commission  also proposes  that the Council  should  approve  the  aforementioned 
Joint  Declaration  and  should  authorise  the  President  of the  Council  to designate  the 
persons empowered to sign it on behalf of the Community 

4 

Proposal for a 

DECISION  OF THE COUNCIL 

No 

concerning the conclusion of the Interim Agreement on trade and trade related matters 
between the European Community,  on the one part, and the United Mexican  States, on 
the other part 

3 

THE COUNCIL OF THE EUROPEAN  UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular 
Articles  57(2)  last  sentence,  66  and  113,  in  conjunction  with  the  first  sentence  of  Article 
228(2)  and the second  subparagraph of Article 228(3)  thereof, 

Having regard to the proposal from the Commission, 

Having regard to the assent of the European Parliament, 

Whereas pending the entry into force of the Economic Partnership, Political  Co-ordination 

and  Co-operation  Agreement  signed  in 
,  the  Interim  Agreement  on 
trade  and trade  related  matters  between  the  European  Community,  on  the  one  part,  and 
the  United  Mexican  States,  on  the  other  part,  signed  in 
,  should  be 
approved, 

on 

on 

HAS DECIDED  AS FOLLOWS: 

Article 1 

The  Interim  Agreement  on  trade  and  trade  related  matters  between  the  European 
Community,  on  the  one  part,  and  the  United  Mexican  States,  on  the  other  part,  together 
with  the  declarations  made  by  the  Community  unilaterally  or jointly  with  other  parties,  is 
hereby approved on behalf of the European Community. 

The texts are attached to this Decision. 

Article 2 

The  President  of  the  Council  shall  give  the  notification  provided  for  in  Article  18  of  the 
Agreement  on behalf of the European Community. 

Article 3 

1.  The  position  to  be  taken  by  the  Community  within  the  Joint  Council  and  the  Joint 
Committee  established  by  the  Agreement,  shall  be  laid  down  by  the  Council,  on  a 
proposal  from the Commission,  in accordance  with the corresponding  provisions of the 
Treaty establishing the European  Community. 

2.  The  President  of  the  Council  shall  in  accordance  with  Article  8  of  the  Agreement, 
preside  over  the  Joint  Council  and  present  the  position  of  the  Community.  In 
accordance with Article  10 of the Agreement,  a representative  of the Commission  shall 
preside over the Joint Committee,  and present the position of the Community. 

4 

This Decision shall be published in the Official Journal of the European Communities. 

Article 4 

Done at Brussels, 

For the Council 
The President 

.s~ 

INTERIM AGREEMENT 
ON TRADE AND TRADE-RELATED  MATTERS 
BETWEEN THE EUROPEAN COMMUNITY, 
OF THE ONE PART, 
AND THE UNITED MEXICAN STATES, 
OF THE OTHER PART 

C 

I N T É R IM  A G R E E M E NT  ON  T R A DE  A ND  T R A D E - R E L A T ED  M A T T E RS  B E T W E EN  T HE 

EUROPEAN COMMUNITY, OF THE ONE PART,  AND THE UNITED MEXICAN  STATES,  OF 
THE OTHER PART, 

The European Community, hereinafter referred  to as 'the Community' 

the United Mexican States, hereinafter  referred  to as 'Mexico', 

of the one part and, 

of the other part, 

WHEREAS 
the  Economic  Partnership,  Political  Coordination  and  Cooperation 
Agreement between  the Community and its Member  States of the one part  and Mexico 
of  the  other  part,  hereinafter  referred  to  as  the  Global  Agreement,  was  signed  in 

on 

; 

WHEREAS  the  Global  Agreement  is  intended  to  strengthen  and  widen  the  relations 
between  the Community  and  its Member  States  and  Mexico  established  by the  existing 
Cooperation Agreement of  1991; 

WHEREAS  it  is  in  the  mutual  interest  of  the  Parties  to  implement  as  speedily  as 
possible, by means of an Interim  Agreement,  the provisions of the Global  Agreement on 
trade and trade-related matters; 

HAVE DECIDED  to  conclude  this Agreement  and  to  this end  have designated  as their 
plenipotentiaries, 

THE EUROPEAN COMMUNITY: 

THE UNITED MEXICAN STATES: 

WHO, having exchanged their full powers, found  in good and due form, 

HAVE AGREED AS FOLLOWS: 

IIILKi 

GENERAL PRINCIPLES 

ARTICLE  1  (GA 1) 

Basis of the Agreement 

Respect  for  democratic  principles  and  fundamental  human  rights  proclaimed  by  the 
Universal Declaration of Human Rights, underpins the domestic and external policies of 
both Parties and constitutes an essential element of this Agreement. 

TITLE II 

TRADE LIBERALISATION 

ARTICLE 2 

Objective 

The objective  of this Title is to establish a framework to encourage the development of 
trade  in  goods  and  services,  including  a  bilateral  and  preferential,  progressive  and 
reciprocal  liberalisation  of  trade  in  goods,  taking  into  account  the  sensitive  nature  of 
certain products and in accordance with the relevant WTO rules. 

ARTICLE 3 (GA 5) 

Trade in goods 

In order to achieve the objective laid down in Article 2, the Joint Council established by 
Article  7  of  the  Agreement  shall  decide  on  the  arrangements  and  timetable  for  a 
bilateral, progressive and reciprocal liberalisation of tariff and non-tariff barriers to trade 
in goods, in accordance with the relevant WTO rules, in particular Article XXIV of the 
GATT,  and  taking  account  of  the  sensitive  nature  of  certain  products.  This  decision 
shall address, in particular, the following matters: 

(a) 

coverage and transitional periods; 

(b) 

customs duties on imports and exports and charges having an equivalent  effect; 

(c) 

quantitative  restrictions  on  imports  and  exports  and  measures  having  equivalent 
effect; 

(d)  national treatment  including the prohibition  of fiscal discrimination  in respect  of 

taxes imposed on goods; 

(e) 

anti-dumping and countervailing measures; 

(f) 

safeguard and surveillance measures; 

f 

(g) 

rules of origin and administrative cooperation; 

(h) 

customs cooperation; 

(i) 

customs valuation; 

(j) 

technical regulations and standards, sanitary and phyto sanitary legislation, mutual 
recognition of conformity assessment, certifications, marks systems, etc.; 

(k)  general exceptions justified  on grounds of public morality, public policy or public 
security; the protection of human, animal or plant life or health; the protection  of 
industrial, intellectual and commercial property, etc. 

(1) 

restrictions in case of balance of payments  difficulties. 

IITLEJII 

PUBLIC PROCUREMENT. COMPETITION. INTELLECTUAL  PROPERTY 
AND OTHER TRADE-RELATED PROVISIONS 

ARTICLE 4 (GA Art 10) 

Public procurement 

1. 

2. 

The Parties  shall  agree to the gradual  and mutual opening  of agreed  government 
procurement markets on a reciprocal basis. 

In order to achieve this objective, the Joint Council shall decide on the appropriate 
arrangements  and  timetable.  The  decision  shall  address,  in  particular,  the 
following matters: 

a)  coverage of the agreed liberalisation; 

b) non-discriminatory access to the agreed markets; 

c)  threshold values; 

d)  fair and transparent procedures; 

e)  clear challenge procedures; 

f)  use of information  technology 

9 

ARTICLE 5 (GA Art 11) 

Competition 

1. 

The Parties shall agree on the appropriate measures in order to prevent  distortions 
or restrictions of competition  that  may  significantly  affect  trade between  Mexico 
and the Community.  To this end, the Joint Council shall establish mechanisms of 
cooperation  and  coordination  among  their  authorities  with  responsibility  for  the 
implementation  of  competition  rules.  Cooperation  shall  include  mutual  legal 
assistance,  notification,  consultation  and  exchange  of  information  in  order  to 
ensure transparency relating to the enforcement of competition laws and policies. 

2. 

In order to achieve this objective, the Joint  Council shall decide in particular, on 
the following matters: 

(a)  agreements  between  undertakings, decisions by  associations  of  undertakings 

and concerted practices between undertakings; 

(b)the abuse by one or more undertakings of a dominant position; 

(c)  mergers between undertakings; 

(d)state monopolies of a commercial character; 

(e)  public  undertakings  and  undertakings  to  which  special  or  exclusive  rights 

have been granted. 

ARTICLE 6 (GA 12) 

Intellectual property 

1.  Reaffirming  the  great  importance  they  attach  to  the  protection  of  intellectual 
property  rights  (copyright,  -including  the  copyright  in  computer  programmes  and 
databases- and neighbouring rights, the rights related to patents, industrial  designs, 
geographical  indications including designation of origins, trademarks, topographies 
of integrated  circuits, as well as protection  against unfair  competition  as referred  to 
in Article  10 bis of the Paris  Convention  for  the Protection  of  Industrial  Property 
and  protection  of  undisclosed  information),  the  Parties  undertake  to  establish  the 
appropriate measures with a view to ensuring  an adequate  and effective  protection 
in accordance with the highest international standards, including effective  means to 
enforce such  rights. 

2.  To this  effect,  the Joint  Council  shall  decide  on  a consultation  mechanism  with  a 
view  to reaching  mutually  satisfactory  solutions  in  the  event  of  difficulties  in  the 
protection of intellectual property. 

/o 

TITLE IV 

INSTITUTIONAL. GENERAL AND FINAL PROVISIONS 

ARTICLE 7 (GA 45) 

Joint Council 

A Joint  Council is hereby  established  which shall  supervise the implementation  of this 
Agreement. It shall meet at ministerial level at regular intervals and when circumstances 
require.  It  shall  examine  any  major  issues  arising  within  the  framework  of  this 
Agreement and any other bilateral or international issues of mutual interest. 

ARTICLE 8 (GA 46) 

1.  The  Joint  Council  shall  consist  of  the  Members  of  the  Council  of  the  European 
Union  and Members  of the European  Commission  on the one hand,  and  Members 
of the Government of Mexico, on the other. 

2.  Members  of  the  Joint  Council  may  arrange  to be  represented,  in  accordance  with 

the conditions to be laid down in its rules of procedure. 

3.  The  Joint  Council  shall  establish  its  own  rules  of procedure.  It  shall  meet  for  the 

first time within 30 days of the entry into force of this agreement. 

4.  The  Joint  Council  shall  be  presided  in  turn  by  a  Member  of  the  Council  of  the 
European Union  and a Member of the Government  of Mexico, in accordance  with 
the provisions to be laid down in its rules of procedure. 

ARTICLE 9 

The Joint Council  shall, for the purposes of attaining the objectives  of this  Agreement, 
have the power to take decisions in the cases provided therein. The decisions taken shall 
be binding  on the Parties which  shall take the measures to  implement  them.  The  Joint 
Council may also make appropriate recommendations. 
It  shall  draw  up  the  decisions  and  recommendations  by  agreement  between  the  two 
Parties. 

The  application  of  the  decisions  provided  for  in  Articles  3, 4.2,  5.2  and  6.2  shall  be 
suspended until the signature of the Global Agreement. 

ARTICLE 10 

Joint Committee (GA 48) 

1.  The  Joint  Council  shall  be  assisted  in  the  performance  of  its  duties  by  a  Joint 
Committee composed of representatives of the Community on the one hand, and of 
representatives of the Government of Mexico on the other, normally  at senior civil 
servant level. 

u 

In  its  rules  of procedure  the  Joint  Council  shall  determine  the  duties  of  the  Joint 
Committee,  which  shall  include  the  preparation  of  meetings  of  the  Joint  Council 
and how the Committee shall  function. 

2.  The Joint  Council  may  delegate  to  the  Joint  committee  any  of  its powers.  In  this 
event the Joint Committee shall take its decisions in accordance with the conditions 
laid down in Article 9. 

3.  The Joint Committee shall generally meet once a year, on a date and with an agenda 
agreed in advance by the Parties, in Brussels one year and Mexico the next. Special 
meetings  may  be  convened  by  mutual  agreement.  The  office  of  chairman  of  the 
Joint Committee shall be held alternately by a representative of each of the Parties. 

ARTICLE  11 (GA 49) 

Other special committees 

The  Joint  Council  may  decide  to  set  up  any  other  special  committee  or body  that  can 
assist it in the performance of its duties. 

In its rules of procedure, the Joint Council shall determine the composition and duties of 
such committees or bodies and how they shall  function. 

ARTICLE  12 (GA 50) 

Dispute settlement 

The Joint  Council  shall decide on the establishment  of a specific  trade or trade related 
dispute settlement procedure compatible with the relevant WTO provisions in this field. 

ARTICLE  13 (GA 52) 

National security clause 

No provision of this Agreement shall preclude a Party taking measures: 

(a)  which  it  considers  necessary  to  prevent  disclosures  of  information  which  are 

contrary to the essential interests of its security; 

(b)  relating  to  the  production  of,  or  trade  in,  arms,  munitions  or  war  material  or  to 
research, development  or production connected with defence  needs, provided  these 
measures  do not  adversely  affect  the conditions  of competition  regarding  products 
which are not intended for specifically military purposes; 

(c)  which  it  considers  essential  to  its  security  in  the  event  of  serious  domestic 
disturbances liable to disrupt public order, war, or serious international tensions that 
might  erupt  into  armed  conflict  or  to  fulfil  obligations  it  has  entered  into  for  the 
maintenance of peace and international security. 

a 

ARTICLE  14 (GA 56) 

Territorial application 

This  Agreement  shall  apply  to  the  territory  in  which  the  Treaty  establishing  the 
European  Community  is applied  under the conditions  laid  down  in  that  Treaty,  on  the 
one hand, and to the territory of the United Mexican States, on the other. 

ARTICLE 15 

Duration 

This  Agreement  shall  be  applicable  until  the  entry  in  to  force  of  Global  Agreement 
signed on 

Each  of  the  Parties  may  denounce  the  Agreement  by  notifying  the  other  Party.  The 
Agreement shall cease to apply six months after the date of such notification. 

ARTICLE  16 (GA 58) 

Fulfillment  of obligations 

1.  The Parties  shall  adopt  any  general  or specific  measure required  for  them  to  fulfil 
their  obligations  under this Agreement  and  shall  ensure that they  comply with  the 
objectives laid down in the Agreement. 

If either Party considers that the other Party has failed  to fulfil  an obligation  under 
this Agreement, it may take appropriate measures.  Before doing so, except in cases 
of  special  urgency,  it  must  supply  the  Joint  Council  with  all  the  relevant 
information  required  for  a thorough  examination  of  the  situation,  within  30  days, 
with a view to seeking a solution acceptable to the Parties. 

In this selection of measures, priority must be given to those measures which  least 
disturb  the  functioning  of  this  Agreement.  These  measures  shall  be  notified 
immediately  to  the  Joint  Council  and  shall be  the  subject  of  consultations  in  that 
Council, if the other Party so requests. 

2.  The  Parties  agree  that  the  term  "cases  of  special  urgency"  in  paragraph  1 of  this 
Article means a case of material  breach of the Agreement by one of the Parties. A 
material breach of the Agreement consists of: 

(a)  repudiation  of  the  Agreement  not  sanctioned  by  the  general  rules  of 

international law; 

(b)  violation of the essential elements of the Agreement referred to in Article 1. 

/s 

3.  The  Parties  agree  that  the  "appropriate  measures"  referred  to  in  this  Article  are 
measures taken in accordance with international law. If a Party takes a measure in a 
case of special  urgency as provided  for  under this Article, the other Party may ask 
that an urgent meeting be called to bring the Parties together within  15 days. 

ARTICLE  17 (GA 59) 

Authentic Text 

This Agreement is drawn up in duplicate in the Danish, Dutch, English, Finnish, French, 
German, Greek, Italian, Portuguese, Spanish and Swedish languages, each of these texts 
being equally authentic. 

ARTICLE 18 

Entry into Force 

1.  This  Agreement  shall  be  approved  by  the  Parties  in  accordance  with  their  own 

procedures. 

2.  This Agreement  shall enter into  force  on the first day of the month  following  the 
date  on  which  the  Parties  notify  each  other  of  the  completion  of  the  procedures 
necessary for this purpose. 

3.  Notification  shall be  sent to the Secretary-General  of the Council  of the  European 

Union which shall be the depositary for the Agreement. 

/H 

FINAL ACT 

IC 

JOINT DECLARATION 

JOINT INTERPRETATIVE DECLARATION ON ARTICLE 2 

The commitments  resulting from Article  2 of this Agreement  will not  take effect  until 
the decision referred to in Article 3 is adopted. 

/c 

DECLARATION BY THE EUROPEAN COMMUNITY 

DECLARATION BY THE EUROPEAN COMMUNITY ON ARTICLE 5 

The  Community  declares  that,  until  the  adoption  by  the  Joint  Council  of  the 
implementing rules on competition referred  to in Art. 5 paragraph  2, it will assess any 
practice  contrary  to  that  Article  on  the  basis  cf  the  criteria  resulting  from  the  rules 
contained  in  Articles  85,  86  and  92  of  the  Treaty  establishing  the  European 
Community,  and,  for  products  covered  by  the Treaty  establishing  the  European  Coal 
and Steel Community, by those contained  in Articles 65 and 66 of that Treaty  and the 
Community rules on State aids, including secondary legislation. 

'4 

JOINT DECLARATION  BETWEEN THE EUROPEAN COMMUNITY AND 
THEIR MEMBER STATES AND THE UNITED MEXICAN STATES 

With a view to the adequate coverage of the issues contained  in Titles III and IV of the 
Economic  Partnership,  Political  Coordination  and  Cooperation  Agreement  signed  on 
within  a  comprehensive  framework,  the  European 

[intialled  on] 

Community and its Member states and the United Mexican States undertake to: 

1.  Start  and  if  possible,  conclude  negotiations  regarding  the  arrangements  for  the 
liberalisation of trade in services and of capital movements and payments as well as 
the measures relating to intellectual property provided for in Articles 6, 8, 9 and 12 
of that Agreement,  in parallel with negotiations on the arrangements  and  timetable 
for  liberalisation  of trade in goods provided  for both in Article 5 of that Agreement 
and  in  Article  3  of  the  Interim  Agreement  on  trade  and  trade-related  matters 
between the European Community and Mexico signed on 

[initialled on ....] 

2.  Aim  at  ensuring  that,  without  prejudice  to  the  accomplishment  of  their  respective 
internal  procedures,  the  results  of  the  negotiation  on  the  liberalisation  of  services 
and  of  capital  movements  and  payments  as  well  as  the  measures  relating  to 
intellectual  property, provided  for  above, may enter into  force  as soon  as possible, 
thereby  achieving  the  Parties'  shared  objective  of  a  global  trade  liberalisation 
covering  both  goods  and  services,  in  accordance  with  Article  7 of  the  Economic 
Partnership, Political Coordination and Cooperation Agreement. 

/f 

FINANCIAL  STATEMENT 

the  budgetary 
The  following  financial  statement  concerning 
expenditures  and  revenues  linked  to  the  implementation  of  this  agreement  was 
approved  by  the  Commission  in  the  context  of  the  transmission  to  the  Council  of  the 
draft  directives  for  a New  Agreement,  on 23 October  1995. 

the  evaluation  of 

1 

TITLE  OF OPERATION 

Economic  partnership  and  political  consultation  agreement  between 
European  Community  and  Mexico. 

the 

2 

BUDGET HEADINGS  INVOLVED 

(a) Implementation  of the agreement  will  directly  involve  the following  items: 

B7-3010: 

B7-3011: 

B7-5000: 

B7-5010: 

B7-5020: 

B7-5040: 
B7-5041: 
B7-5046: 

B7-5050: 

B7-5051 : 
B7-5077: 
B7-5080: 

B7-5091: 

B7-5096: 
B7-5230: 
B7-5300: 

carried 

towards 

schemes 

out  by 

countries 

concerning 
non-governmental 

technical  cooperation  with  Latin  American 

Financial  and 
developing  countries 
Economic  cooperation  with  Latin  American  developing 
countries 
Promotion  of  Community  investment  in  developing  countries  of 
Asia,  Latin  America,  the  Mediterranean  and  in  South  Africa  by 
economic  cooperation  and  trade  agreements 
Community 
contribution 
developing 
organizations 
Commercial  and  economic  cooperation  agreements  with  third 
countries 
Environment  in the developing  countries 
Tropical  forests 
Health  programmes  and 
developing  countries 
Aid  for  population  policies  and  programmes  in  developing 
countries 
Women  in development 
Decentralized  cooperation  in the developing  countries 
North-South  cooperation  schemes  in  the context  of  the campaign 
against drug  abuse 
Coordination  of  development  policy,  evaluation  of  the results of 
Community  aid and practical  follow-up  measures 
Development  cooperation  inspectorate 
Democratization  process in Latin  America 
Measures  to combat  fraud  in the cooperation  sector 

the  fight  against  HIV/AIDS 

in 

(b) Other items that  may be used: 

B4-1000: 

Thermie  II  (Community  programme  of  financial  support  for  the 
promotion  of energy  technology  in  Europe) 

/9 

B4-1041: 

B6-5211: 

B6-5311: 

European  Energy  Charter  and  cooperation  with  third  countries 
in  the energy  field 
Completion  of  the third  framework  programme  (1990  to  1994) -
projects  concerned  by  Agreement  on  the  European  Economic 
Area 
Completion  of  projects  not  covered  by 
framework 
programme  and  not  concerned  by  Agreement  on  the  European 
Economic  Area 

the 

3 

LEGAL  BASIS 

Economic  partnership  and  political  consultation  agreement  between  the  EU  and 
Mexico 

4 

DESCRIPTION  OF OPERATION 

4.1  General  objective 

Conclusion  of  economic  partnership  and  political  consultation  agreement 
between  the EU and  Mexico 

4.2  Period covered and arrangements  for  renewal  or extension: 

The agreement  will  have no time limit. 

5 

CLASSIFICATION  OF EXPENDITURE OR REVENUE 

5.1 

Non-compulsory  expenditure 

5.2 

Differentiated  appropriations 

5.3 

Type of  revenue  involved: not applicable 

6 

TYPE OF EXPENDITURE OR REVENUE 

Expenditure  will  usually  take the form  of a  100%  grant,  though  operations  may 
sometimes be co-financed  with  other donors (Member States). 

The  recipients  will  systematically  be  required  to  contribute  according  to  their 
means. 

7 

FINANCIAL IMPACT 

7.1 Method  of calculating  total  cost of operation  (definition  of  unit costs) 

c 2^ 

This  Agreement  establishes  a  framework  for  new  measures  to  reflect  the  changing 
content  and  methods  of  Community  cooperation/relations  with  Mexico  in  the light 
both  of  recent  social  and  economic  developments  in  that  country  and  the 
developing  political  dialogue between  it and  the  Union. 

The objective  is to bring about a qualitative  improvement  in  relations  by  enhancing 
the Community's  capacity  to respond  to specific  new  requests  from  Mexico on  the 
basis  of a  new  dialogue  aimed  at establishing  a true partnership;  it  is  not  to  create 
a specific  budget  for a new operation. 

7.2  Itemised  breakdown  of cost 

EC in ECU  million  (current  prices) 

Breakdown 

Budget 
year n 

n  +  1  n  +  2 

n  +  3 

n  +  4 

n  +  5 and 
subs,  yrs 

TOTAL 

Total 

7.3  Schedule of commitment/payment  appropriations 

EC in ECU  million 

n 

n  +  1  n  -1- 2  n  +  3  n  +  4 

n  +  5 and 
subs,  yrs 

TOTAL 

Commitment 
appropriations 
Payment 
appropriations 
n 
n  +  1 
n  +  2 
n  +  3 
n  +  4 
n  +  5 and subs. 
yrs 
TOTAL 

8.  Fraud prevention measures; results of measures taken 

In  order  to  ensure  maximum  accountability  in  the  management  of  budget  resources, 
projects  are subject  to the following  procedures: 

- committee for  the assessment of restricted  invitations  to tender  (technical  assistance); 
- system  of codirectors  (one local and one Community); 
- project  administration  involving cost accounting; 

eft/ 

- supervisory  missions by desk officers  and/or  technical  and/or  financial  units; 
- ad  hoc audits in conjunction  with  the relevant  units of  DG VIII; 
-  inspections by the Court of  Auditors and  Financial  Control. 

For  projects  of  above-average  duration  involving  large  budgets,  there  will  be  annual 
financial  and  accounts audits,  to be conducted  by an internationally  recognized  firm. 

9.  ELEMENTS OF COST-EFFECTIVENESS  ANALYSIS 

9.1 Specific  and quantified  objectives;  target  population 

The  objectives  specific  to  each  project  are  defined  in  the  financing  proposal, 
which  includes  an  economic  and  financial  analysis  of  the  project  and,  where 
certain  budget  headings  (e.g.  B7-3010 and  B7-3011) are concerned,  is approved 
by  the  ALA  Committee  in  the  case  of  projects  costing  more  than  ECU  1 
million.  For  other  projects,  the  specific  objectives  are  defined  in  the  detailed 
commitment  form  accompanying  each  project. 

Target  population:  indirectly,  the whole population  of  Mexico,  but especially: 

-  the  private  sector,  business  circles  in  Mexico  and  in  Europe,  taking  due 
account of the principle of  mutual  interest; 
-  the most disadvantaged  groups. 

9.2 Grounds  for  the operation 

The  projects  launched  will  be  financed  under  existing  budget  items  and  are 
therefore  underpinned  by  the  financial  statements  accompanying  those  items  in 
the PDB. 

9.3 Monitoring  and  evaluation  of  the operation 

10. ADMINISTRATIVE EXPENDITURE  (PART  A  OF THE BUDGET) 

10.1  Increase in the  number of  staff 

The  actual  mobilization  of  the  administrative  resources  required  will  depend  on  the 
annual  Commission  decision  on  the  allocation  of  resources,  taking  into  account  any 
amounts or  staff  allowed  by the budgetary  authority. 

The following  comments on the need  for  additional  resources  shall be without  prejudice 
to any decision  on this subject  by the Commission. 

The allocation  of any additional  resource  may be assessed  only  in  the overall  context of 
the  priorities  which  the  Commission  may  be  required  to  decide  in  the  framework  and 
within  the limits of  the  1996 PDB. 

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I.  Impact on  the number of posts 

(a)  Relations  with  Mexico  have so far  been  handled  by an  A official,  who is also in 
charge  of  the  Cuba  desk,  assisted  by  a  non-regular  A  and  a  non-regular  C 
official.  They  are  unable  to cope  with  the  steady  increase  in  political  contacts, 
cooperation  programmes  and  the  day-to-day  workload  of  the  desk  office 
generated  by the stepping-up of relations over the past year. 

The  objective  of  the  economic  partnership  and  political  consultation  agreement 
is  to  strengthen  relations  between  Mexico  and  the  Union  in  all  areas.  The 
agreement  will  therefore  bring  with  it  qualitative  requirements  quite  distinct 
from  the volume of aid  granted. 

This  agreement  has  to  reflect  the  Union's  will  to  maintain  closer  relations  not 
only  in  the  context  of  cooperation  but  in  the  form  of  deeper  political  dialogue 
and  trade cooperation  geared  to the future  liberalization  of trade. 

There  must  therefore  be  an  increase  in  staffing,  with  one  new  temporary  A 
official,  one  B  official  and  one  C  official.  Their  responsibilities  will  be  as 
follows: 

A official  and  temporary  A  official 

* 

* 

Overall  direction,  overall  consistency  of  policy,  coordination  of  activities, 
in-house 
and 
dissemination,  overall  administration; 

coordination,  dealings  with  Mexico, 

information 

technical  monitoring  of  trade relations,  supervision  of  the  working  parties 
that  will  be  set  up,  coordination  of  trade-related  issues  with  other 
departments,  day-to-day  handling  of  trade  questions,  preparations  for 
meetings  of  the joint  trade  subcommittee,  drawing-up  of  reports,  studies 
and analyses on trade aspects of the future  bilateral  relations; 

* 

cooperation:  identification,  implementation,  management,  monitoring etc. 

B  official 

* 

Support  to  A officials,  particularly  data  searches,  processing  of  statistics, 
data processing,  administration  and  accounting. 

C  official 

* 

Secretarial back-up. 

(b) This  shall  be  without  prejudice  to  any  requirements  which  may  arise  in  other 

Directorates-General  as a result of strengthening  relations  with  Mexico. 

ds 

Type of  post 

Staff  to be assigned  to 
the  project 
permanent 
posts 

temporary 
posts 

Officials  or 
temporary 
officials 

Other  staff 
Total 

A1 

B1 
C1 

3 

A1 

2 
3 

of which 

duration 

by  using  existing 
staff  in the DG 
or service 
concerned 
A1 

by  recourse  to 
additional  staff 

A1 

(3 years) 

B1 
C1 

3 

2 
3 

10.2  Overall  financial  impact of the additional  staff 

B3 officials 
C5 officials 
Temporary  A7 officials 
Other  staff 
(indicate  budget  heading) 
1 Total 

Total 

Method  of calculation 

78 794  Gross salary.  List of average annual 
54 028  cost of existing  posts. 
88 436 

I 

2212581 

The  figures  give  the  total  cost  of  the  additional  posts  for  the  entire  duration  of  the 
project  if it is of a fixed  duration  or  for  12 months if it of unlimited  duration. 

II.  Increase  in  other  operational  expenditure  resulting  from  the  operation:  Mission 

expenses 

From  the outset  of  its  dealings  with  the  Community,  Mexico  has  expressed  its  wish  to 
receive  technical  assistance  from  the  EC  in  several  fields  drawing  on  the  Community 
institutions'  technical  experience.  It has expressly  asked  to work  directly  with  officials 
of  those institutions. 

The  Commission  has  attempted  to  satisfy  their  requests  by  involving  various  DGs and 
departments  in  specific  efforts  to transfer  integration  know-how. 

Even  though  the  various  DGs  have  expressed  their  readiness  to  take  part  in  such 
activities,  the  financing  of  missions  has  proved  very  difficult.  The  Commission  has 
had  to  refuse  a  considerable  number  of  requests  from  Mexico  owing  to  the  lack  of  a 
specific  budget. 

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These  handicaps  will  be  exacerbated  if  no  suitable  arrangements  are  adopted  to 
facilitate  these  specific  activities,  especially  since  the  economic  partnership  and 
political  consultation  agreement  would  extend  the scope of  this technical  assistance. 

Since it is impossible  to  forecast  by  how  much  each  DG's  reserve  should  be  increased, 
leaving  aside  the  agreements  between  DGs  on  the  authorization  of  missions,  a  further 
ECU 50 000/year  should  be budgeted  from  1996 just  to  cover  operations  in  this  field, 
to  be  initiated  and  coordinated  by  departments  of  the  DG  handling  relations  with 
Mexico. 

An  estimate  of  additional  funds  are  therefore  estimated  for  projects  to  transfer  the 
particular expertise of  the Community  institutions  to Mexico. 

The estimated  funding  is intended  for  the organization  of  missions averaging  one week 
for  ten  officials. 

Budget heading  (No) 
A  1300 
[ Total 

j 

Amount 
50 000 
50 000 

Method  of calculation 
See table below 
|  . 

| 

Number of 
missions 

10 

Average 
cost of 
ticket 
3 500 

Average 
daily 
allowance 
207 

Total 
(ECU) 

Round  total 
(ECU) 

49 490 

50 000 

The  figures  give  the  total  cost  of  the project  if  it  is of  a fixed duration  or  the  cost  for 
12 months if it is of unlimited  duration. 

<âs 

ISSN 0254-1475 

COM(97) 525 final 

DOCUMENTS 

EN 

02  08  10  11 

Catalogue number  : CB-CO-97-540-EN-C 

ISBN 92-78-25977-2 

Office  for Official  Publications of the European Communities 

L-2985 Luxembourg 

&s