Mexico Fails to Leverage Free Trade Agreements

Strategic Insights -

The Mexican Foreign Trade Council's president, Carlos Rojas Magnon, has reported that Mexico is not fully utilizing its free trade agreements (FTAs) with other countries. Despite having agreements with the US and Europe, Mexico's trade activity is limited, with many businesses missing out on opportunities to export a wide range of products, including fruits, vegetables, and meats. Rojas Magnon attributes this to a lack of interest among businesses, as well as a lack of information about the FTAs.

Key Takeaways:

  • Mexico's free trade agreements with the US and Europe are not being fully utilized, with many businesses missing out on export opportunities.
  • The lack of interest among businesses is a significant factor in this underutilization, despite having the necessary information.
  • Mexican businesses find it easier to establish deals with Mexican-American counterparts in the US rather than navigating trade agreements with European countries.
  • The US Bio-terrorism Law's third phase, which goes into effect on Wednesday, could affect up to 700 small businesses in Mexico.
  • The agreement with Europe has a vast potential for trade, but it is being "much more misused" compared to the North American Free Trade Agreement.
  • The Swedish market is seen as a long-term option for Mexican businesses, offering loyalty and better prices once relationships are established.
  • Mexican businesses prefer to establish relationships with Mexican-American counterparts in California rather than negotiating in English with European clients.
  • The Swedish client offers better loyalty and prices once business ties are established, making it an attractive option for Mexican exporters.

Statistics:

  • Up to 700 small businesses in Mexico could be affected by the US Bio-terrorism Law's third phase.
  • Mexico has free trade agreements with the US and Europe, but is not fully utilizing them.
  • The US-North American Free Trade Agreement (NAFTA) has been in effect since January 1, 1995.
  • The EU-Mexico Free Trade Agreement went into effect in October 2000.
  • The US Bio-terrorism Law's third phase will go into effect on an unspecified date.

Sources:

  • Cronica/Corporate Mexico by Internet Securities, Inc. via COMTEX (May 19, 2004)
  • Internet Securities, Inc.
  • COMTEX (http://www.comtexnews.com)