After experiencing many years of cyclical crisis, the Mexican economy has proved to be the most sound and reliable in Latin America as well as the best performer in the case of any emerging country in the world. In spite of the world economic slowdown, inflation rates have been reduced to single digits and GDP growth has been constant. As a result of these achievements, Mexico has received high awards by International Agencies (Moody's, Fitch and Standard & Poors) and currently holds the presidency of the G-20.
Over the last 16 years, Mexico has made a dramatic transition from a relatively closed economy, to one of the most open countries in the world. Aside from implementing a series of domestic measures to deregulate business activity and encourage private investment, Mexico has embraced international free trade agreements as a means to promote industrial competitiveness and exports oriented growth. As a result of this commitment, Mexico has had the opportunity to hold several international events such as the International Summit on Financing for Development as well as the APEC Summit. In September 2003, Mexico hosted the WTO Ministerial Meeting.
Mexico is one of the leading trading nations in the world and the first in Latin America. The country has entered into a network of 11 Free Trade Agreements with neighbours in North, Central and South America, as well as in Europe, Asia and Israel. This network promotes Foreign Direct Investment and the incorporation of Mexican content into export products, as it becomes key to access more than 800 million consumers in 32 countries under preferential conditions. Presently, Mexico is negotiating a free trade agreement with Japan.
Based on its preferential access in countries from regions such as Europe and Latin America, Mexico offers Canadian companies the opportunity to save a bundle on tariffs if they expand their operations to reach these markets from Mexico. By the end of 2003, it is estimated that 94% of the products currently exported by Mexico won't pay any export duties. Thus Mexico will have the highest proportion of duty free exports in the world.
Similarly, as of January 2003, 100% of Mexico's industrial exports will be duty free in the European Union and EFTA markets. If we consider that the European Union will soon be expanding its membership to 25 States, Mexico possesses unique advantages.
It has been estimated that Mexico's trade with the European Union could triple from the current $21 US billion dollars if Canadian and US companies take advantage of Mexico's free trade access.
Mexico has a well-developed structure to host these foreign capital flows, which include a supply of quality inputs, certainty and transparency from a legal framework, and a labour force which has proven to be able to learn fast in new production processes and organizational structures.
Mexico and NAFTA
NAFTA, , has continued to promote economic integration within Canada, Mexico and the United States. At the same time, NAFTA partners have cooperated to advance trade liberalization within North America, regionally as well as globally.
North America is not only one of the largest free trade areas in the world, with a market of 360 million consumers, but it is also seen as one of the most prosperous and integrated trading regions. Each day, the NAFTA countries conduct nearly $1.7 billion US dollars in trilateral trade, accounting for one third of the region's total trade. Regional trade has increased 109% since 1993, growing from $339 billion to $603 billion in 2002. This represents more than $1 million dollars per minute!
Furthermore, in 2001, trade between Mexico, Canada and the United States accounted for $622 billion US dollars, 116 per cent more than that registered in 1993. Similarly, during the NAFTA era, Mexico's trade with its treaty partners has tripled reaching $257 billion US dollars in the last year.
This year, NAFTA reached an important milestone in our trilateral relationship as 99 per cent of the goods traded by NAFTA partners now enter duty-free. Having reached this stage, our challenge now as governments is to continue with the promotion and the creation of a business environment that allows for greater economic integration and guarantees that the benefits of the Agreement reach the entire population.