Mexico Free Trade Agreements 2020

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Mexico Free Trade Agreements 2020: Key Trade Partners and Updates

Mexico has become an increasingly important player in the global economy, thanks to its numerous free trade agreements (FTAs) with countries around the world. In 2020, Mexico continues to pursue new trade deals, while also strengthening its existing partnerships. Let’s take a closer look at Mexico’s FTAs, their impact on the Mexican economy, and the latest updates and developments.

Mexico’s Free Trade Agreements: Overview

Mexico has 13 free trade agreements with 50 countries, making it one of the most open economies in the world. These agreements cover countries from North, Central, and South America, Europe, and Asia. Here are some of the most important trade partners for Mexico:

– United States (USMCA): The USMCA agreement (formerly NAFTA) is the most important FTA for Mexico, as the US is Mexico’s largest trading partner. The new agreement, which came into effect on July 1, 2020, updates and modernizes NAFTA, while also addressing new issues such as digital trade, intellectual property, and labor standards.

– European Union (EU-Mexico FTA): The EU is Mexico’s second-largest trading partner, and the two sides signed a new FTA in 2018. The agreement removes most tariffs on goods traded between the two regions, while also including provisions on services, investment, and intellectual property.

– Canada: Canada is Mexico’s third-largest trading partner, and the two countries have a long-standing FTA that predates NAFTA. The new USMCA agreement incorporates many of the provisions of the Canada-Mexico FTA.

– Pacific Alliance: Mexico is a member of the Pacific Alliance, a free trade agreement between Mexico, Chile, Colombia, and Peru. The alliance aims to deepen economic integration and increase trade within the region, and has a combined population of over 225 million people.

Impact of FTAs on the Mexican Economy

Mexico’s FTAs have had a significant impact on the Mexican economy, helping to boost exports, attract foreign investment, and create jobs. Here are some key statistics:

– Mexico’s total trade (exports + imports) was worth $997 billion in 2019, up 3.2% from the previous year.

– Mexico’s exports were worth $461 billion in 2019, up 2.7% from the previous year. The top export sectors were vehicles (including auto parts), electrical machinery, and crude oil.

– Mexico’s trade with the US was worth $614 billion in 2019, up 1.4% from the previous year. The US accounted for 81% of Mexico’s exports and 49% of its imports.

– Mexico’s trade with the EU was worth $74 billion in 2019, up 9.5% from the previous year. The EU accounted for 6.5% of Mexico’s exports and 12% of its imports.

– Mexico’s trade with Canada was worth $27 billion in 2019, down 4.1% from the previous year. Canada accounted for 3.4% of Mexico’s exports and 2.6% of its imports.

Latest Updates and Developments

In 2020, Mexico has continued to pursue new FTAs, while also trying to maintain its existing partnerships. Here are some of the latest updates and developments:

– Mexico-United Kingdom FTA: Mexico and the UK are currently negotiating a new FTA to replace the EU-Mexico FTA after Brexit. The two countries hope to reach an agreement by the end of 2020.

– Mexico-Argentina FTA: Mexico and Argentina signed a new FTA in March 2020, which removes most tariffs on goods traded between the two countries.

– USMCA implementation: Mexico has been working to implement the new USMCA agreement, which includes new rules on labor and environmental standards, as well as provisions on digital trade and intellectual property.

– COVID-19 impact: The COVID-19 pandemic has had a major impact on global trade, including Mexico’s FTAs. Many countries have imposed new restrictions on trade and travel, which has disrupted supply chains and reduced demand for exports. However, Mexico has also used its FTAs to secure new markets for its exports, including medical equipment and pharmaceuticals.

Conclusion

Mexico’s numerous free trade agreements have helped to integrate the country into the global economy, boost exports, and attract foreign investment. With the new USMCA agreement in place, and negotiations ongoing with the UK and other countries, Mexico’s trade prospects look strong for the coming years. However, the COVID-19 pandemic has also highlighted the need for resilience and flexibility in global trade, as countries seek to balance economic growth with public health concerns.