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News Article

Mexico: A Leader in Free Trade Agreements

By Antonio Gozain | Wed, 07/20/2022 - 15:40

Mexico ranks seventh in Free Trade Agreements (FTA) in the world, reports the World Trade Organization (WTO). Mexico’s main FTA is the US, Mexico and Canada Agreement (USMCA). July 1, 2022, marked the second anniversary of the enforcement of USMCA, with several experts and private sector players calling the treaty a success, as reported by MBN.

“There is a lot of interest from companies to come to Mexico because of the closeness we have with the US, especially many investments from companies from Asia. And although the figures are favorable, they could improve in the coming years,” said Claus von Wobeser, President, International Chamber of Commerce.

Mexico has 23 FTAs, and is only surpassed by the EU (46), the UK (38), Chile (31), the European Free Trade Association (EFTA, 29), Singapore (27) and Turkey (24). Other emerging economies, such as Peru, the Republic of Korea, India and Panama, have recently signed several FTAs, putting them close to Mexico’s 23.

FTAs are designed to reduce or eliminate certain barriers to trade and investment between two or more countries, facilitating stronger trade and commercial ties, according to WTO. FTAs contribute to greater economic activity and job creation in member countries, delivering opportunities for both big and small businesses.

From mid-October 2021 to mid-May 2022, WTO members penned eight FTAs, compared to the 51 between October 2020 and May 2022. Six of those ​​concerned the liberalization of trade in goods and services, while the other two concerned only trade in goods. In addition, five FTAs underwent changes.

Since 2021, Mexico and the US have traded close to US$620 billion. By April 2022, both countries had traded US$250 billion during 2022, according to the US Census Bureau.

This year has been active in regards to FTAs in Mexico. In May 2022, Minister of Economy Tatiana Clouthier traveled to London to meet with the UK’s Secretary of State for International Trade Anne-Marie Trevelyan and start negotiating the terms for a new FTA between both countries. Meanwhile, Mexico and South Korea are currently negotiating an FTA, as reported by MBN.

The FTAs in which Mexico participates involve relations with economies that together represent 59 percent of global trade, 60 percent of the world’s GDP and are home to 1.3 billion potential consumers of Mexican products, reported El Economista. In addition to the active FTAs, Mexico has two Partial Scope Agreements, six Economic Complementation Agreements and 32 Reciprocal Investment Promotion Agreements.

The data used in this article was sourced from:  
MBN, WTO, El Economista
Photo by:   Unsplash
Antonio Gozain Antonio Gozain Journalist and Industry Analyst