Doing Business with Mexico 1

Team Work,

Team members:

Name: Fernan Rodrigo Pérez Gálvez ID# A00889292

Name: Itsasne Alkota Arana ID# A00898823

Name: Daniel Almanza Hernàndez ID# A00889134

After reading the article Mexico’s Position as a world class trader answer the
following ideas:

1. Explain why Mexico has made a dramatic transition

Mexico has made a dramatic transition because of its closed economy.

2. Mention 3 aspects in which Mexico has integrated to the world

Open trade policy

Unilaterally liberalizing economy

GATT

3. Explain what the GATT is, when and why Mexico has joined it.

GATT is the General Agreement on Tariffs and Trade. It was formed in

1947 and its main objective was the reduction of barriers to
international trade. This was achieved through the reduction of tariff
barriers, quantitative restrictions and subsidies on trade through a
series of agreements. In 1993 the GATT was updated (GATT 1994) to
include new obligations upon its signatories. One of the most
significant changes was the creation of the World Trade Organization
(WTO). The 75 existing GATT members and the European
Communities became the founding members of the WTO on 1 January
1995. The other 52 GATT members rejoined the WTO in the following
 Doing Business with Mexico 2

two years (the last being Congo in 1997). Since the founding of the
WTO, 21 new non-GATT members have joined and 29 are currently
negotiating membership. There are a total of 153 member countries
in the WTO. Mexico has joined the GATT in 1986 as its open trade
policy. The opening of markets had been one of the benefits that
Mexico has obtained from his participation in GATT.

Today, Mexico is the world’s 9th largest trader and by far the most
important one in Latin America. It participates actively in multilateral
trade negotiations, and is still one of the most dynamic participants in
regional trade agreements.
4. After analyzing the 2 attached spread sheets impmx_ae.html and
expmx_ae.html, make a list starting with the most profitable free trade
agreement PER COUNTRY for Mexico. Use the network of trade
agreements for reference of agreements.

EXPORTS IMPORTS
Estados Unidos Estados Unidos
Canada Japon
España Alemania
Japón Brasil
Francia Francia
Alemania España

EUA and Canada: 1994, North American Free Trade Agreement

Europe Union (Spain, Germany, French): 2000, Free Trade Agreement

with the European Union

Japan: 2005, Agreement for the Strengthening of the Economic

Partnership with Japan

Brazil: 2002, MERCOSUR, ECA 53

5. What is the percentage of Mexico’s exports that are duty free?

 Doing Business with Mexico 3

Approximately 94% of Mexico's exports are now duty free.

6. What is the MERCOSUR and what is Mexico’s position about it?

MERCOSUR is an organization in South America, which means Mercado

Común del Sur, their main purposes are to establish a free circulation
of good, services and resources between the participating countries, also
to establish a common extern tax and the adoption of a common
commercial policy. The organization also seeks for macroeconomic
coordination and a better development for the import and export
commercial policies for making the process easier.

Mexico’s official position to MERCASUR is as a viewer, mainly to expand

the frontiers in Free Trade Agreements that actually are active in Mexican
policies.

7. What is the FTAA and which are the countries involved?

The FTAA means Free Trade Area of the Americas; it’s an organization
that has all the countries of Central and South America, and the
Caribbean, except for Cuba. Their main purpose is to develop a better
life quality between the countries, avoid monopolies and to improve the
agreements of trade in the Continent.

Mexico was the official headquarters for the reunions from March 2003 to
December 2004.

* Antigua and Barbuda * Brazil (retracted)

* Argentina (retracted) * Canada

* Bahamas * Chile (retracted)

* Barbados * Colombia

* Belize * Costa Rica

 Doing Business with Mexico 4

* Dominica * Paraguay

* Dominican Republic * Peru

* El Salvador * Saint Kitts and Nevis

* Grenada * Saint Lucia

* Guatemala * Saint Vincent and the

Grenadines
* Guyana
* Suriname
* Haiti
* Trinidad and Tobago
* Honduras (retracted)
* United States
* Jamaica
* Uruguay
* Mexico

* Panama

8. Find and comment about the latest news (Tuesday, august 18th 2009)
about conversations between Mexican President Calderón Hinojosa and
Brazilian President Luiz Inácio Lula da Silva about FTA (TLC Brasil-
México)

Presidents Luiz Inacio Lula da Silva of Brazil and Felipe Calderón of

Mexico agreed Monday to explore the possibility of a free trade
agreement as part of a strategy to reduce their dependence on the
industrialised world.

"A market of 300 million people is better than one of 110 million, in the
case of ," Calderón said at the end of his meeting with Lula in Brasilia,
the capital. (www.bilaterals.org)

9. Mention 3 aspects to which trade liberalization has contributed

Has increased trade, improve global competitiveness and ensure long-

term growth.
 Doing Business with Mexico 5

10.Find the adequate statistical source to update the 3 tables shown in the
article for year 2008 in Mexico's performance by sector

1. year 2008 in Mexico's performance by sector.

Mexico Imports (2007): $281 926 500 USD Thousand

Mexico Exports (2007): $271 821 200 USD Thousand

Total Trade = $553 747 700 USD Thousand

Leading Importers:

USA $2 017 121 000

Germany $1 039 308 000

China $955 955 800

14.- Mexico $281 926 500

Leading exporters:

Germany $1 328 841 000

China $1 217 776 000

USA $1 162 538 000

15.- Mexico $271 821 000

Reference:

www.trademap.org