What is the Group of 3?
Let me explain what the Group of 3 is. It refers to a ten-year free trade agreement between Mexico, Colombia, and Venezuela that started in 1995 and ran until 2005. This pact covered a range of issues, including intellectual property rights, public-sector investments, and the easing of trade restrictions.
When the agreement came up for renewal in 2006, Venezuela, under Hugo Chavez's leadership, chose not to continue. Instead, Venezuela joined Mercosur, an older free trade area. After Venezuela's departure, Colombia and Mexico decided to keep their free trade partnership going for about nine more years.
Understanding the Group of 3 (G3)
You should know that the Group of 3 was one of several free trade agreements Mexico entered into, with the North American Free Trade Agreement (NAFTA) being the largest. Mexico was the biggest and most influential partner in the Group of 3. This pact fit into Mexico's broader agenda to expand free trade across much of Central America, including countries like Peru, Bolivia, and Ecuador.
There were some notable changes to the agreement over time. For instance, in December 2004, a decree was issued to increase free trade in additional industries. Then, in August 2011, Mexico and Colombia made adjustments to lower tariffs on various products.
Eventually, Mexico and Colombia ended their bilateral alliance in 2014 when they both joined the Pacific Alliance along with Chile and Peru. The aim of this new agreement was to enhance trade among these four nations and build stronger economic links to Asia, given that all border the Pacific Ocean.
Legacy of the Group of 3
The Group of 3 didn't last long, and Venezuela was never a particularly strong participant. However, it did succeed in increasing trade between Mexico and Colombia.
One key benefit was in the energy and utility sectors. Early on, the Group of 3 worked on connecting power grids and gas pipelines from Mexico to Colombia and Venezuela. In October 2007, a gas pipeline opened between Colombia and western Venezuela, allowing gas to reach previously inaccessible areas.
From Mexico's viewpoint, the Group of 3 was part of a strategy to open up its trade policies and boost exports significantly. It allowed Mexico to tap into labor markets across the region for producing goods that could be exported to the United States and Canada through NAFTA. This helped solidify Mexico's role as Central America's top trading partner, though other agreements like NAFTA contributed more. The Group of 3 weakened due to competing regional and bilateral trade deals, including those between Central American countries and the U.S.
On the other hand, Colombia and Venezuela had hoped the Group of 3 would lead to joining NAFTA, but that never happened.
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