Mexico's Trade Agreements
Mexico has twelve free trade agreements:
- NAFTA with the USA and Canada (1994)
- G-3 with Colombia and Venezuela (1995)
- Free Trade Agreement with Costa Rica (1995)
- Free Trade Agreement with Bolivia (1995)
- Free Trade Agreement with Nicaragua (1998)
- Free Trade Agreement with Chile (1999)
- Free Trade Agreement with the European Union (2000)
- Free Trade Agreement with Israel (2000)
- TN Free Trade Agreement with Guatemala, El Salvador, and Honduras (2001)
- AELC European Association of Free Trade with Iceland (2001)
- Free Trade Agreement with Uruguay (2004)
- Free Trade Agreement with Japan (2005)
Mexico has also participated in free trade negotiations with South Korea, Brazil, and Argentina and also has expressed interest in joining Mercosur, a South American customs union.
NAFTA
Mexico’s most significant trade agreement is NAFTA. NAFTA established a continent-wide free-trade zone consisting of 439 million people and a combined GDP of $14 trillion. Foreign investment in Mexico has grown to more than $16 billion a year since its enactment. Additionally, Mexico has one of the top ten best performing stock markets world wide because of the increasing flow of foreign capital into the stock market. It has also reduced the annual inflation rate to an average of three to four percent.
NAFTA allows free profit repatriation by firms in the USA and Canada. Excluding the energy sector, it also requires removal of limitations on foreign investment. Further, barriers to banking and securities have also been abolished.
Maquiladoras
Many countries send parts to be assembled in Mexico with the end product being returned back to the original country, better know as a Maquiladora. Maquiladoras have allowed products to enter the USA duty-free since the 1960’s. The Foreign Investment Act was modified in 1993 to allow foreigners to own agricultural land thereby creating the agromaquila where a foreign grower imports seeds into Mexico and exports the produce. It is also interesting to note that real estate and commercial growth are often a result of new and expanding maquila construction.
Free Trade Zone
Mexico created a Free Trade Zone, Grupo Empresarial Logistik (Integrated Logistics Center), in 2005 located in an industrial park near San Luis Potosí. As long as the goods are to be sold outside of Mexico, this 1300-acre zone allows for finished merchandise to be tax-free. Like the maquila model, it reduces taxes and barriers to trade. Another advantage is the zone’s location on Highway 57 which is the main route that connects Mexico City to Nuevo León, a city that lies directly across the border from Laredo, Texas.
China
In September 2005, Mexico and the People’s Republic of China entered into bilateral trade negotiations and signed a Memorandum of Understanding which serves to enhance social welfare, labor dialogue, job creations, and cultural exchange. Among Latin American countries, Mexico is first in imports and fourth in exports to China. China’s interests include:
- Metal ores and iron
- Soybeans and soy oil
- Copper
- Machinery
- Steel
- Oil
- Electronic circuitr
Real Estate Buyers
If you are considering purchasing land in Mexico it’s very important to get proper representation.
We Are Members of :
