Having completed free trade agreements with 46 countries, Mexico boasts more trading partners than any other nation in the world. While the pace of economic growth is slowing, opportunities to export abroad still beckon.
Parts for cars and engines, avocados and pears, air conditioning components, and even tortillas and bread: The Mexican economy is chugging along producing and exporting all of these commodities—and many more—to diverse and widespread markets across the globe. Manufacturing GDP has continued to rise slowly in 2017, although other sectors like services, mining, and agriculture are down on the year. Overall, the economy is still growing, albeit at a modest pace.
With a forward and optimistic approach to international trade, Mexico leads the world in free trade agreements (FTAs). Thus far, the North American nation has entered into 12 FTAs with 46 different countries around the globe; the latter figure outnumbers any other country in the world. Trade partners include the United States and Canada, the European Union, the European Free Trade Area, Japan, the Pacific Alliance, Israel, and 10 other countries in Latin America.
Emilio Cadena, the President & CEO of business and government consultant Grupo PRODENSA, points to the transformative effect trade can have on a nation. Mexican citizens have a better quality of life, and businesses exist in a “culture of compliance, of paying taxes, of quality and continuous improvement and innovation,” he says. “We now compete worldwide and we win worldwide.”
Thanks to President Trump, Mexico will be forced to enhance its trade relationships with Europe, Canada, and the rest of the world, and not concentrate so much on the United States.” —Fernando de Ovando, Partner, Jones Day
THAT’S NOT ALL
The Latin American nation has further extended its reach with 32 Reciprocal Investment Promotion and Protection Agreements (RIPPAs) with 33 countries, and nine Economic Completion and Partial Scope Agreements within the framework of the Latin American Integration Association (ALADI). Mexico also participates in multilateral regional organizations and forums such as the World Trade Organization (WTO), the Asia-Pacific Economic Cooperation (APEC), and the Organization for Economic Cooperation and Development (OECD).
All told, through these various agreements, México City has successfully negotiated access to a global market of 1.3 billion potential customers comprising 58 percent of the world’s GDP and 53 percent of all global commerce.
One potential disappointment for Mexico is the Trans-Pacific Partnership (TPP), the fate of which has been imperiled by the United States’ exit from the agreement. A fully functioning TPP would allow Mexico to shore up its economic and commercial presence in 10 key markets in the Asia-Pacific region,
one of the most dynamic in the world. World leaders are still optimistic that they can salvage the partnership. Juan
Carlos Baker, a TPP negotiator for Mexico, attended a ministerial meeting on the agreement in Hanoi on May 21, 2017. “Mexico and Japan have a very important role to play,” he said, regarding efforts to pull the remaining 11 signatories together.