QUERETARO Europe and Mexico need to go back to the negotiating table to rework their 12-year-old free-trade agreement to include services and agriculture, the European Union's top trade official said on Monday.
EU Trade Commissioner Karel De Gucht said Mexico and Europe needed to rework their trade pact, which was signed in 2000, to match the framework of more recent and comprehensive deals.
"Mexico and the European Union have been pioneers of transatlantic free trade but our legal relationship now risks falling behind," De Gucht told a conference in the central Mexican city of Queretaro.
Europe is Mexico's third-biggest trading partner behind the United States and China, but the trade of Latin America's second-biggest economy is focused on its northern neighbor, which buys nearly 80 percent of Mexican exports.
The EU is nearing a wide-reaching deal with Canada, and the European Parliament could approve by the end of the year a deal with Colombia and Peru that ministers signed in March, De Gucht said.
The EU also hopes to launch talks on a similar comprehensive deal with the United States next year.
De Gucht said Mexico and the EU should reopen their previous agreement to include services, agriculture as well as investment, technical barriers and public procurement.
"It will make a lot of sense to upgrade our relations with Mexico (which is) in the middle of this whole cluster of agreements that we have been concluding and that we are concluding," De Gucht told Reuters on the sidelines of the conference.
"Now it is up to the Mexicans to reciprocate such an offer and then we can engage in a process," he said.
President-elect Enrique Pena Nieto will take office on December 1 and his government would need to follow up on Europe's overture. De Gucht said he expects to meet with Pena Nieto during the trade commissioner's current trip to Mexico.
De Gucht said he would meet Canadian Trade Minister Ed Fast next week in Brussels to discuss the sticking points holding up the treaty with Canada that ministers hope to sign this year.
The Canada-EU deal would mark Europe's first fully fledged trade pact with a developed country outside Europe and it would be Canada's biggest deal since the landmark North American Free Trade Agreement with the United States and Mexico in 1994.
"Hopefully we are very close to closing a deal," he said, declining to elaborate on the main obstacles. "On both sides we have a very clear desire to wrap up the deal before the end of the year."
Sensitive trade matters that remain to be settled between Europe and Canada include access for agricultural goods, opening up procurement markets and the extension of pharmaceutical patents.
Meanwhile, talks with South American trading bloc Mercosur are on hold and have been complicated by a trade row before the World Trade Organization between Europe and Argentina.
In addition to difficulties with Argentina, De Gucht said high-level talks were on hold until Brazil's government concludes consultations with domestic industries, set to finish before the end of the year.
He said Europe was interested in a deal but that there would need to be a "political breakthrough" to move talks forward.
"It is a little bit difficult to be optimistic," he said. "Obviously at this moment in time, it is extremely difficult with Argentina, but that should not discourage the others to move forward."
Mercosur includes Argentina, Brazil, Paraguay, Uruguay and Venezuela.
(Reporting by Michael O'Boyle; Editing by Lisa Shumaker)