353
GRS 470
RESTRICTED
FM MEXICO CITY
TO PRIORITY FCO
TELNO 188
OF 26213OZ MAY 86
AKK 122/1 RESTRICTED
Amended Dist
27-5-86
INFO PRIORITY DTH, HMT, UKMI'S GENEVA, UKREP BRUSSELS, WASHINGTON
[ NEUTRAL]
DT FOR ITP1 AND OT4
HMT FOR REDLEY
FROM MILTON
MEXICO : GATT
1. IT APPEARS FROM BARTLETT'S LETTER OF 14 MAY TO HAYES THAT WE
MAY BE TAKING THE MOST CRITICAL ATTITUDE AMONG THE TWELVE TOWARDS
MEXICO'S APPLICATION. IN CONSIDERING OUR POSITION FURTHER PARAGRAPHS 9-10 OF BARLETT' LETTER YOU MAY WISH TO TAKE THE
FOLLOWING FACTORS INTO ACCOUNT.
-
-
2. THE MEXICAN AUTHORITIES CONTINUE TO ATTACH A GREAT DEAL OF
IMPORTANCE TO THE EARLY SUCCESS OF THEIR APPLICATION TO JOIN THE GATT (MY TELNO 183, PARAGRAPH 7). IT IS SEEN AS A MOST IMPORTANT
ELEMENT IN THE GOVERNMENTS'S PROGRAMME TO LIBERALISE THE ECONOMY
AND TO EMBARK AFRESH ON A PROGRAMME OF SUSTAINED AND BALANCED ECONOMIC GROWTH. IN VIEW OF THE PRESENT BALANCE OF PAYMENTS DIFFICULTIES THERE MUST BE AN OBVIOUS TEMPTATION FOR THE MEXICANS TO TAKE MEASURES DESIGNED TO REDUCE IMPORTS, AND IT MAY COME TO THAT. IT WOULD BE AN EASY OPTION THEREFORE TO DROP THE GATT APPLICATION,
WHICH MEXICAN INDUSTRY AND THE LEFT WING ARE LESS THAN ENTHUSIASTIC
ABOUT AS YOU KNOW ALREADY. IT IS TO THE GOVERNMENT'S CREDIT, THAT
THEY ARE GOING AHEAD WITH IT.
3. ON THE BASIS OF WHAT WE HAVE BEEN TOLD LATELY THE MEXICANS ARE
MAKING A DETERMINED EFFORT TO LIBERALISE THEIR FOREIGN TRADE REGIME. THEY REDUCED THE MAXIMUM TARIFF CEILING TO 45 PERCENT ON 30 APRIL. THEY ARE STARTING ON A PROGRAMME TO SWITCH TO NOT MORE THAN 5 TARIFF HEADS RANGING FROM O PERCENT TO 30 PERCENT OVER THE NEXT 30 MONTHS (ANNOUNCED BY THE MINISTER FOR TRADE IN CONGRESS ON 19
MAY - PARAGRAPH 6 OF MY TELNO 183). ALREADY, OVER THE LAST YEAR OR SO THE EXTENT OF THE ELIMINATION OF QUANTITATIVE RESTRICTIONS IN FAVOUR OF TARIFFS HAS BEEN STRICKING. AND ACCORDING TO WHAT MAUD WAS TOLD DURING HIS VISIT HERE EARLIER THIS WEEK THE AVERAGE SINGLE TARIFF CURRENTLY NOW STANDS AT 17.5 PERCENT (WHETHER NOMINAL OR EFFECTIVE WE ARE NOT SURE). THIS RAPID TRADE LIBERALISA-
TION PROGRAMME MAY BE SEEN AS A DEMONSTRATION OF THE GOVERNMENT'S
INTENTION TO ANTICIPATE THE DEMANDS GATT MEMBERSHIP WILL IMPOSE.
RESTRICTED
/IM
Page 150Page 151
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