An Era of Free Trade
Group of 3 refers to a ten-year free trade agreement between Mexico, Colombia, and Venezuela that commenced in 1995 and continued until 2005. This pact encompassed various areas such as intellectual property rights, public-sector investments, and the reduction of trade barriers.
Venezuela, led by Hugo Chavez, chose not to renew the agreement in 2006. Instead, it entered Mercosur, another free trade area that predated the Group of 3. Upon Venezuela’s exit, Colombia and Mexico maintained their partnership for approximately nine more years.
Understanding the Dynamics of Group of 3 (G3)
The Group of 3 was one of several free trade accords that Mexico pursued, with the largest being the North American Free Trade Agreement (NAFTA). Mexico, the predominant partner, used the Group of 3 as part of its strategy to extend free trade throughout Central America, including countries like Peru, Bolivia, and Ecuador.
Notably, in December 2004, there was a modification intended to boost free trade in other industries. Additionally, in August 2011, Mexico and Colombia agreed to further reduce tariffs on a variety of products.
In 2014, Mexico and Colombia concluded their bilateral trade agenda when they joined the Pacific Alliance with Chile and Peru. This alliance aimed to increase trade between all four nations and strengthen economic ties with Asia.
Legacy: The Impact of the Group of 3
Despite its relatively short duration, the Group of 3 played a significant role, particularly between Mexico and Colombia. Although Venezuela did not emerge as a strong participant, the agreement facilitated enhanced trade relationships.
One significant achievement was the integration of the energy sectors. For example, a gas pipeline linking Colombia and western Venezuela opened in October 2007, extending gas supply to previously underserved areas.
From Mexico’s perspective, the Group of 3 aligned with its strategy to open trade policies and significantly boost exports. This offered a platform to leverage labor markets across the region to produce goods for sale in the United States and Canada through NAFTA.
However, the agreement also faced competition from other regional trade agreements and specific bilateral arrangements between Central American countries and the U.S. This factor, along with divergent national interests, contributed to its eventual dissipation.
Conversely, Colombia and Venezuela had hoped that the Group of 3 would pave the way for their inclusion in NAFTA, an expectation that was never fulfilled.
Related Terms: NAFTA, Mercosur, Pacific Alliance.
References
- Congressional Research Service. “Mexico’s Free Trade Agreements”, Page 8.
- Asociación Latinoamericana de Integración. “About Us”.
- Australian Government, Department of Foreign Affairs and Trade. “Pacific Alliance Free Trade Agreement”.
- Reuters. “Venezuela and Colombia Inaugurate Gas Pipeline”.
