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EC expects benefits from NAFTA but has reservations.

A European Community Commission opinion paper on the North American Free Trade Agreement (NAFTA) was largely positive but also expressed some reservations about its potential impact.

The EC is Mexico's second-largest trading partner and has benefited from that country's growth and its open-door policy. The opinion paper expected some displacement of its products by North American ones as tariffs shrink, while it looked to increased economic growth in Mexico to further improve EC-Mexico trade. Also, as the second largest investor in Mexico, the EC was pleased with the greater economic security NAFTA should bring.

On the negative side, the EC considered NAFTA rules of origin for cars and textiles to be more restrictive than those in Europe. EC farm products could face higher barriers to the Mexican market under NAFTA. In addition, the EC did not rule out the possibility that NAFTA benefits in financial services would be limited to companies majority-owned by NAFTA nationals, which the opinion paper said was contrary to EC policy.
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Title Annotation:North American Free Trade Agreement
Publication:Journal of Accountancy
Article Type:Brief Article
Date:Sep 1, 1993
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