Monday, September 14, 2009
[IWS] CRS: MEXICO'S FREE TRADE AGREEMENTS [27 August 2009]
IWS Documented News Service
_______________________________
Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
________________________________________________________________________
Congressional Research Service (CRS)
Mexico's Free Trade Agreements
M. Angeles Villarreal, Specialist in International Trade and Finance
August 27, 2009
http://opencrs.com/document/R40784/2009-08-27/download/1013/
[full-text, 22 pages]
Summary
Mexico has had a growing commitment to trade integration through the formation of free trade
agreements (FTAs) since the 1990s and its trade policy is among the most open in the world.
Mexico's pursuit of FTAs with other countries not only provides economic benefits, but could
also potentially reduce its economic dependence on the United States. The United States is, by
far, Mexico's most significant trading partner. About 80% of Mexico's exports go to the United
States and 49% of Mexico's imports come from the United States. Mexico's second largest
trading partner is China, accounting for approximately 6% of Mexico's exports and imports. In an
effort to increase trade with other countries, Mexico has a total of 11 trade agreements involving
41 countries. These include agreements with most countries in the Western Hemisphere including
the United States and Canada, Chile, Costa Rica, Nicaragua, Guatemala, El Salvador, and
Honduras. In addition, Mexico has negotiated FTAs outside of the Western Hemisphere and
entered into agreements with Israel and the European Union in July 2000. Mexico also has an
FTA with Japan. The large number of trade agreements, however, has not yet been successful in
decreasing Mexico's dependence on trade with the United States.
Economic motivations are generally the major driving force for the formation of free trade
agreements among countries, but there are other reasons countries enter into FTAs, including
political and security factors. One of Mexico's primary motivations for the unilateral trade
liberalization efforts of the late 1980s and early 1990s was to improve economic conditions in the
country, which policymakers hoped would lead to greater investor confidence and attract more
foreign investment. Trade agreements were also expected to improve investor confidence, attract
foreign investment, and create jobs. Mexico may have other reasons for entering into FTAs, such
as expanding market access and decreasing its reliance on the United States as an export market.
The slow progress in multilateral negotiations may also contribute to the increasing interest
throughout the world in regional trade blocs. Some countries may see smaller trade arrangements
as "building blocks" for multilateral agreements.
Since Mexico began trade liberalization in the early 1990s, its trade with the world has risen
rapidly, with exports increasing more rapidly than imports. Mexico's trade balance with all
countries went from a deficit of $13.5 billion in 1993 to surpluses of $7.1 billion in 1995 and $6.5
billion in 1996. Since 1998, Mexico's trade balance has remained in deficit, reaching $17.5
billion in 2008. The trade balance with the United States went from a deficit of $2.4 billion in
1993 to a surplus of $82.0 billion in 2008. Exports to the United States increased 447% between
1993 and 2008, from $42.9 billion to $292.6 billion. Mexico's imports from the United States
increased 237% during the same time period, from $45.3 billion to $152.6 billion.
In the 110th Congress, issues of concern related to the trade and economic relationship with
Mexico involved mostly economic conditions in Mexico, issues related to the North American
Free Trade Agreement (NAFTA), the effect of NAFTA on Mexico, and Mexican migrant
workers in the United States. The 111th Congress will likely maintain an active interest
concerning Mexico on these issues. This report provides an overview of Mexico's free trade
agreements, its motivations for trade liberalization and entering into free trade agreements, and
some of the issues Mexico faces in addressing its economic challenges. This report will be
updated as events warrant.
Contents
Introduction ...............................................................................................................................1
Motivations for Trade Integration................................................................................................1
Mexican Trade Liberalization......................................................................................................2
Mexico's Trade Agreements ........................................................................................................3
NAFTA................................................................................................................................5
Mexico-Costa Rica................................................................................................................5
Mexico-Nicaragua ................................................................................................................6
Mexico-Chile........................................................................................................................6
Mexico-European Union .......................................................................................................6
Mexico-Israel........................................................................................................................7
Mexico-El Salvador, Guatemala, and Honduras.....................................................................8
Mexico-European Free Trade Association .............................................................................8
Mexico-Japan .......................................................................................................................9
Partial Scope Agreements....................................................................................................10
Mexico's Merchandise Trade..................................................................................................... 11
Trade with the United States................................................................................................13
Trade Trends Since Liberalization .......................................................................................13
Economic Policy Challenges for Mexico...................................................................................16
Implications for U.S. Interests ...................................................................................................18
Figures
Figure 1. Mexico's Merchandise Trade with All Countries.........................................................12
Figure 2. Mexico's Merchandise Trade with the United States ...................................................13
Tables
Table 1. Mexico's Free Trade Agreements ...................................................................................4
Table 2.Mexico's Partial Scope Agreements .............................................................................. 11
Table 3. Composition of Trade: 2008.........................................................................................12
Table 4. Mexico's Exports by FTA Partners ...............................................................................14
Table 5. Mexico's Imports from FTA Partners ...........................................................................15
Table 6. Market Share of Exports and Imports by FTA Partner...................................................16
Contacts
Author Contact Information ......................................................................................................19
______________________________
This information is provided to subscribers, friends, faculty, students and alumni of the School of Industrial & Labor Relations (ILR). It is a service of the Institute for Workplace Studies (IWS) in New York City. Stuart Basefsky is responsible for the selection of the contents which is intended to keep researchers, companies, workers, and governments aware of the latest information related to ILR disciplines as it becomes available for the purposes of research, understanding and debate. The content does not reflect the opinions or positions of Cornell University, the School of Industrial & Labor Relations, or that of Mr. Basefsky and should not be construed as such. The service is unique in that it provides the original source documentation, via links, behind the news and research of the day. Use of the information provided is unrestricted. However, it is requested that users acknowledge that the information was found via the IWS Documented News Service.
Stuart Basefsky
Director, IWS News Bureau
Institute for Workplace Studies
Cornell/ILR School
16 E. 34th Street, 4th Floor
New York, NY 10016
Telephone: (607) 255-2703
Fax: (607) 255-9641
E-mail: smb6@cornell.edu
****************************************
_______________________________
Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
________________________________________________________________________
Congressional Research Service (CRS)
Mexico's Free Trade Agreements
M. Angeles Villarreal, Specialist in International Trade and Finance
August 27, 2009
http://opencrs.com/document/R40784/2009-08-27/download/1013/
[full-text, 22 pages]
Summary
Mexico has had a growing commitment to trade integration through the formation of free trade
agreements (FTAs) since the 1990s and its trade policy is among the most open in the world.
Mexico's pursuit of FTAs with other countries not only provides economic benefits, but could
also potentially reduce its economic dependence on the United States. The United States is, by
far, Mexico's most significant trading partner. About 80% of Mexico's exports go to the United
States and 49% of Mexico's imports come from the United States. Mexico's second largest
trading partner is China, accounting for approximately 6% of Mexico's exports and imports. In an
effort to increase trade with other countries, Mexico has a total of 11 trade agreements involving
41 countries. These include agreements with most countries in the Western Hemisphere including
the United States and Canada, Chile, Costa Rica, Nicaragua, Guatemala, El Salvador, and
Honduras. In addition, Mexico has negotiated FTAs outside of the Western Hemisphere and
entered into agreements with Israel and the European Union in July 2000. Mexico also has an
FTA with Japan. The large number of trade agreements, however, has not yet been successful in
decreasing Mexico's dependence on trade with the United States.
Economic motivations are generally the major driving force for the formation of free trade
agreements among countries, but there are other reasons countries enter into FTAs, including
political and security factors. One of Mexico's primary motivations for the unilateral trade
liberalization efforts of the late 1980s and early 1990s was to improve economic conditions in the
country, which policymakers hoped would lead to greater investor confidence and attract more
foreign investment. Trade agreements were also expected to improve investor confidence, attract
foreign investment, and create jobs. Mexico may have other reasons for entering into FTAs, such
as expanding market access and decreasing its reliance on the United States as an export market.
The slow progress in multilateral negotiations may also contribute to the increasing interest
throughout the world in regional trade blocs. Some countries may see smaller trade arrangements
as "building blocks" for multilateral agreements.
Since Mexico began trade liberalization in the early 1990s, its trade with the world has risen
rapidly, with exports increasing more rapidly than imports. Mexico's trade balance with all
countries went from a deficit of $13.5 billion in 1993 to surpluses of $7.1 billion in 1995 and $6.5
billion in 1996. Since 1998, Mexico's trade balance has remained in deficit, reaching $17.5
billion in 2008. The trade balance with the United States went from a deficit of $2.4 billion in
1993 to a surplus of $82.0 billion in 2008. Exports to the United States increased 447% between
1993 and 2008, from $42.9 billion to $292.6 billion. Mexico's imports from the United States
increased 237% during the same time period, from $45.3 billion to $152.6 billion.
In the 110th Congress, issues of concern related to the trade and economic relationship with
Mexico involved mostly economic conditions in Mexico, issues related to the North American
Free Trade Agreement (NAFTA), the effect of NAFTA on Mexico, and Mexican migrant
workers in the United States. The 111th Congress will likely maintain an active interest
concerning Mexico on these issues. This report provides an overview of Mexico's free trade
agreements, its motivations for trade liberalization and entering into free trade agreements, and
some of the issues Mexico faces in addressing its economic challenges. This report will be
updated as events warrant.
Contents
Introduction ...............................................................................................................................1
Motivations for Trade Integration................................................................................................1
Mexican Trade Liberalization......................................................................................................2
Mexico's Trade Agreements ........................................................................................................3
NAFTA................................................................................................................................5
Mexico-Costa Rica................................................................................................................5
Mexico-Nicaragua ................................................................................................................6
Mexico-Chile........................................................................................................................6
Mexico-European Union .......................................................................................................6
Mexico-Israel........................................................................................................................7
Mexico-El Salvador, Guatemala, and Honduras.....................................................................8
Mexico-European Free Trade Association .............................................................................8
Mexico-Japan .......................................................................................................................9
Partial Scope Agreements....................................................................................................10
Mexico's Merchandise Trade..................................................................................................... 11
Trade with the United States................................................................................................13
Trade Trends Since Liberalization .......................................................................................13
Economic Policy Challenges for Mexico...................................................................................16
Implications for U.S. Interests ...................................................................................................18
Figures
Figure 1. Mexico's Merchandise Trade with All Countries.........................................................12
Figure 2. Mexico's Merchandise Trade with the United States ...................................................13
Tables
Table 1. Mexico's Free Trade Agreements ...................................................................................4
Table 2.Mexico's Partial Scope Agreements .............................................................................. 11
Table 3. Composition of Trade: 2008.........................................................................................12
Table 4. Mexico's Exports by FTA Partners ...............................................................................14
Table 5. Mexico's Imports from FTA Partners ...........................................................................15
Table 6. Market Share of Exports and Imports by FTA Partner...................................................16
Contacts
Author Contact Information ......................................................................................................19
______________________________
This information is provided to subscribers, friends, faculty, students and alumni of the School of Industrial & Labor Relations (ILR). It is a service of the Institute for Workplace Studies (IWS) in New York City. Stuart Basefsky is responsible for the selection of the contents which is intended to keep researchers, companies, workers, and governments aware of the latest information related to ILR disciplines as it becomes available for the purposes of research, understanding and debate. The content does not reflect the opinions or positions of Cornell University, the School of Industrial & Labor Relations, or that of Mr. Basefsky and should not be construed as such. The service is unique in that it provides the original source documentation, via links, behind the news and research of the day. Use of the information provided is unrestricted. However, it is requested that users acknowledge that the information was found via the IWS Documented News Service.
Stuart Basefsky
Director, IWS News Bureau
Institute for Workplace Studies
Cornell/ILR School
16 E. 34th Street, 4th Floor
New York, NY 10016
Telephone: (607) 255-2703
Fax: (607) 255-9641
E-mail: smb6@cornell.edu
****************************************
# posted by SBasefsky : 11:56 AM
