I. Facts and figures
Mexico in the world
Mexico is located in the North American
region, together with Canada and the
United States.
Mexico shares a 3,500 kilometres-long borderline with the United
States. Neighbours to the south are Guatemala and Belize.
I. Facts and figures
EMERGING ECONOMY
11th largest country in the world, in land and population size.
Land area: 2 million sq. km.
Total population: 112 million people
Largest Spanish-speaking Nation
12th largest world economy in GDP terms
Total GDP: 1 trillion USD
Per capita GDP: $9,700 US Dollars
10th largest contributor to the United Nations´ regular budget
I. Facts and figures
Trade
10th largest trading country (600 billion USD per year)
2nd trade partner of the U.S.
1st Latin American exporter
Investment
6th recipient of FDI among emerging economies
Tourism
8th most important destination in the world = 22 million tourists annually
A country of migrants, 23 million people of Mexican origin in the USA.
Remittances above 20 billion USD.
A country conducting a decisive fight against drug dealers and consumption.
A country with a vast culture, plentiful of traditions, music,
gastronomy, and a wide array of artistic manifestations.
II. Mexico has achieved major results in economic reform in the
last 30 years
• 1970-s – 1980´s Debt problem, end of inward-looking development.
• Since 1982, economic model has been oriented towards liberalization,
deep structural reforms and a diversification of the productive sectors.
• After the financial crisis of 1994-1995, decided orientation towards the
export market.
• Consecutive reforms oriented to modernize the productive infrastructure,
to encourage market diversification and competitiveness.
• Sound macroeconomic policies and a good management of public
finances and external debt have consistently contributed to stability and
growth, making Mexico one of the most relevant economies in the world,
member of the G-20, OECD, APEC, NAFTA, a leader in Latin America
and a country with a Strategic Association with the European Union.
Foreign trade supports Sustained growth
Mexico is one of the best linked countries in the world, with direct
communication to all areas of the United States, Europe, Latin
America and Asia.
Through a wide network of trade arrangements Mexico has
preferential access to 44 countries comprising more than 1 billion
consumers.
China has FTA agreements with 20 countries, the USA with 15,
India with 13 and Brazil with 12 only.
MEXICO’S TRADE AGREEMENTS
NAFTA:
Canada & USA
(Jan. 1, 1994)
Bolivia
(Jan. 1, 1995)
Uruguay
Argentina
Chile
(Jan. 1,1992)
Colombia
(Jan. 1, 1995)
Peru, Ecuador
EFTA: Switzerland, Liechtenstein, Norway & Island (July 1, 2001)
UE: 27 members since 2004, Global agreement since 2000 New Strategic Partnership 2008
Israel (July 1, 2000)
(North Triangle):
Guatemala, Honduras
& El Salvador
(Jan. 1, 2001)
Nicaragua:
(Jan. 1, 1998)
Costa Rica
(Jan 1, 1995)
Panama
OECD
APEC
Japan,
+ ALADI
Brazil
sectoral agreements
It is fair to say that most of these achievements were propelled by
NAFTA
What is the North American Free Trade Agreement (NAFTA) ?
A comprehensive agreement that sets the rules for international trade and
investment between Canada, the United States and Mexico.
It came into force on January 1st, 1994, and covers:
Market access for thousands of goods within North America
Gradual openness for agricultural, automotive and textile and apparel products.
Rules of origin
Trade in services
Special commitments regarding telecommunications and financial services
Investments
Dispute settlement mechanisms on trade and investment
Access to public procurement at the federal level
Competition rules
Protection for Intellectual Property Rights (patents, trademarks, copyrights, and
industrial designs).
Technical standards and phytosanitary standards
Safeguards
Easier access for business travelers
NAFTA additional contents
Side Agreements: the North American Agreement on
Environmental Cooperation and the North American Agreement on
Labor Cooperation
The Border Environment Cooperation Commission provides
technical support for the development of environmental
infrastructure projects in the U.S.-Mexico border region.
The North American Development Bank finances these projects.
What NAFTA is not?
From the very begining, NAFTA was conceived as an agreement on
trade, investment and services, ONLY.
Not a Customs Union nor an agreement to create a predetermined
integration area.
Issues like migration, energy, labor markets, or the establishment of
cohesion funds for development were left out of the negotiations.
Nonetheless, NAFTA was instrumental to lock in economic reforms
in Mexico
Results
NAFTA revolutionized trade and investment in North America, helping to
unlock the region’s economic potential, stimulate growth and
employment, creating higher-paying jobs across North America.
It has paved the way for greater market competition and enhanced choice
and purchasing power for North American consumers and businesses.
It has improved competitiveness in the three North American countries,
as businesses have better access to materials, technologies, capital,
human resources and markets.
And contrary to some views, it has actually contributed for the three
countries to continue expanding trade with other regions.
Assessing NAFTA benefits:Trade
Trade : Since NAFTA came into effect, trade among the NAFTA
countries has more than tripled, reaching around $1 trillion USD
Canada-U.S. trade has nearly tripled,
while trade between Mexico and the U.S. has more than quadrupled.
Today, the NAFTA partners exchange close to $3 billion USD in
merchandise on a daily basis with each other. That’s about $120
USD million per hour.
NAFTA: Growth of Mexican exports since NAFTA
(In billions of USD)
0
50
100
150
200
250
300
19
85
19
86
19
87
19
88
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
"
NAFTA
Trade increase under NAFTA
Nota: Se utilizaron las importaciones reportadas por cada país. * A junio de 2007
Fuente: Secretaría de Economía con datos de importación de Banxico, USDOC y Statistics Canada.
Permanent surplus in favor of Mexico
Mexico-USA trade.
(mmd)
Mexico – Canada trade
(mmd)
Mexico has been third trade partner of the United States,
after Canada and China ..., and this year will be second only to
Canada
Fuente: USDOC
Mexican trade with USA is almost triple of that of Germany and four times that
of France
Trade partners of USA
(Billions of dollars)
worldwidesupplierUSthirdand…
Despite the fierce competition of China, Mexico has increased its total participation
in USA imports
Mexico´s share of total USA imports.
Mexico is already the second largest food supplier
to the USA
Fuente: Secretaría de Economía con datos de Banco de México.
* Agrofood is the total of Agriculture and livestock and agroindustrial products added together.
Mexico´s exports to NAFTA countries
(millions USD)
Mexican food sales represent 14.2% of US imports, more than those of France (3d),
Brazil (4th) and Italy (5th) together
Assessing NAFTA benefits: Investment
Mexico has become one of the largest recipients of foreign
direct investment among emerging markets, and received
more than US$156 billion from its NAFTA partners between
1993 and 2008.
Mexico: A platform for new investments
15.124.7 34.8
49
61.475.1
93.1
122.5
143.6
158.6
181.1
201.0
220.2
243
260
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Cumulative flows of Foreign direct investment in Mexico (FDI)
Fuente: Secretaría de Economía cit. Por Luis de la Calle
North American manufacturing base:
Since NAFTA came into effect, North American manufacturers have
enjoyed better access to materials, technologies, capital, and talent
available across the continent.
U.S. manufacturing output rose by 62% between 1993 and 2008, compared
with 42% between 1980 and 1993. In 2008,U.S. manufacturing exports
reached an all-time high of US$1.0 trillion.
Canadian manufacturing output (real GDP) increased by 62% between
1993 and 2008 compared with 23% between 1981 and 1993. Over the
same period (1993-2008), Canadian manufacturing exports grew at a much
faster pace (up 103.6%).
North American manufacturing base:
NAFTA has empowered Mexico’s industrial base by facilitating
modernization, transforming Mexico into a strategic manufacturing center in
North America,
◦ Growth of manufacturing output has tripled since 1994 .
◦ Mexico’s manufactured exports have multiplied six times over the past
17 years.
Examples of leading industries:
◦ The automotive sector accounts for 20% of Mexico´s manufacturing
GDP = 2.6 vehicles produced in 2011.
◦ The aerospace sector is growing rapidly = 249 companies. Exports in
this sector tripled in six years, having reached 4.4 billion USD in 2011.
30
50
70
90
110
130
150
1.01
11.01
5.02
9.02
1.03
5.03
1.04
8.04
1.05
5.05
10.05
2.06
10.06
5.07
9.07
12.07
3.08
6.08
11.12
International reserves
(billions of US dollars)
Source: Banco de México
Moreover, Mexican international reserves reached historic maximum levels in
recent years... Which allowed to weather down pressures in the last crisis
Assessing NAFTA benefits: jobs
Labor standards and wages: The parallel agreement on labor cooperation
added a social dimension to NAFTA. Trading partners seek to improve
working conditions and living standards, and to protect, enhance, and enforce
basic workers’ rights.
Labor cooperation highlights three key areas: industrial relations,
occupational health and safety, and employment standards. It has also raised
the public profile of major labor rights issues, including protection contracts
and protection of migrant workers.
NAFTA has promoted higher wages. In Mexico, for example, export firms
employ one in five workers; these workers are paid 40% more on average
than those in non-export jobs. Firms with foreign direct investment employ
nearly 20% of the labor force and pay 26% more than the domestic average
manufacturing wage.
Exporting companies are creating new jobs and pay
higher salaries
Fuente:SecretaríadeEconomía,condatosdelIMSSadiciembrede2006
Share of export-oriented companies in total job creation by state
National average
20%
Assessing NAFTA benefits: economic growth
Since NAFTA came into effect, the North American economy has
more than doubled in size.
The combined gross domestic product (GDP) for Canada, the United
States, and Mexico surpassed US$17 trillion in 2008, up from US$7.6
trillion in 1993.
NAFTA, macroeconomic impact
Convergence in consumptiom:
– The main benefit of NAFTA is that consumers in Mexico have access to the
same quality, variety, availability, price, service and credit conditions to those
existing in the US in the sectors open to trade.
Convergence on investment:
– Quality of investment in Mexico is similiar to those in USA and Canada in terms
of technological development, productivity and environmental protection.
Macroeconomic convergence:
– Mexico has economic and business cycles paralell to those in the US, with
inflation and interest rates converging
Social impact
Poverty reduction 1994 - 2006:
The first 15 years of NAFTA have coincided with an important reduction
in poverty in Mexico.
Food poverty was reduced from 21.2% to 13.8%
Poverty in terms of capacities went down from 30.0% to 20.7%
Wealth poverty went down from 52.4% to 42.6%
Source: INEGI and CONEVAL, as quoted by Luis de la Calle
Foreign trade expansion can be correlated to
improvement of standard of living
21.2%
13.8%
1994 2006
30.0%
20.7%
1994 2006
52.4%
42.6%
1994 2006
16.8%
31.9%
1994 2006
Patrimonial poverty
Food poverty Poverty in capabilities
Exports / GDP
Population by tipe of poverty and exports as percentage of GDP
NAFTA in a nutshell
NAFTA Partners
Canada U.S Mexico Combined
Population (July 2008
est.)
35 million 305 million
113. million
453 million people
Languages English and French
English Spanish
Gross Domestic
Product, 2008
(Current prices, US$)
1,501 billion
14,441 billion
1,087 billion
17.0 trillion
Trade with NAFTA
Partners, 2008
(Current prices, US$)
570.8 billion
919.9 billion
393.5 billion
946.1 billion
Inward Foreign Direct
Investment Among
NAFTA Countries,
2008 (US$)
240.0 billion
229.8 billion
156.0 billion
---
Jobs Created 1993-
2010 (millions)
4.5 27 10 41.5
National Employment
Level, 2008 (millions)
17.1 145.4 43.2 205.7
How do we connect these potential with Europe?
The European Union is Mexico´s second economic partner worldwide.
Open window for trade, investment, technology, tourism and best practices
in many sectors.
Active partners in international cooperation and dialogue.
Mexico and the EU signed an Agreement for Economic Association,
Political Dialogue and Cooperation, in application since 1997.
Since 2008, a new Strategic Partnership is being developed between
Mexico and the European Union.
Therefore, Mexico can play a role as a bridge to forge closer relations
between Europe and North America
Advantages of the Mexico-European Union Global Accord +
developing a Strategic Alliance for the 21st Century
Global
advanced
cooperation
Educational
Exchanges,
Training
Sustainable development
Coordination in
multilateral
institutions
Sectoral
Complementarity
And the Czech Republic can be an important link of that chain.
In the last 10 years, Mexico- Czech relations have increased in every aspect: political, economic, cultural, student exchanges, . . .
Reciprocal visits are frequent, including officials from the various levels of government, parliamentarians. business people, academic and research institutions, NGO´s, and other sectors.
Constant political dialogue. The Bilateral Mechanism on Political Consultations met three times in the last six years
Trade between Mexico and the Czech Republic went up by 500% between 2001 and 2008. This year it is expected to surpass 800 million USD
High level group on economic cooperation has met three times since 2008
Investment: Mexican companies in the Czech market: CEMEX, NEMAK, Impulse Logistics, food distributors.
Tourism doubled in the last few years.
Increasing number of educational exchanges.
Priority sectors for Cooperation
Automobile industry
Industrial equipment and intermediate products
Aeronautical and Space industries
Pharmaceuticals
Environmental protection
Water
Forestry
Institutional framework: Political dialogue forum,
High level group on economic cooperation,
visa elimination,
double taxation avoidance,
investment promotion and protection,
promotional activities between ProMexico and Czech Trade and CzechInvest;
a new agreement between the National Council on Science and Technology of Mexico
and the National Academy of Sciences of the Czech Republic, 2012
plus the Global framework between Mexico and the European Union.