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Catalytic Role of the APEC
Process: Behind the Border,
Beyond the Bogor Goals
Raul Urteaga-Trani
Minister, Trade & Investment
Mexico’s Secretary of Economy
Embassy of Mexico, Tokyo, Japan
March 15, 2006
Mexico’s Network of FTA’s

12 FTA’s with more than 40 countries
1.
2.
3.
4.
5.
6.
7.
8.
9.
Chile
US and Canada, NAFTA
Costa Rica
Bolivia
Colombia and Venezuela, G3
Nicaragua
European Union, 25 countries
Israel
Guatemala, Honduras and
El Salvador, Northern Triangle
10. Uruguay
11. EFTA, Iceland, Norway and
Switzerland
12. Japan
Mexico’s Global Trade Performance
Since NAFTA’s Implementation
200
196.7
188.6
Billion dollars
174.4
170.9
168.4 168.7165.4
166.4
158.4 160.8
141.9
136.4
125.4
117.5
110.4109.8
150
95.9
100
89.5
79.3 79.5
72.4
60.9
50
7.1
6.5
0.6
0
-7.9
-18.4
-5.6
-8
-9.9
-7.9
-5.6
-8.1
-50
1994
Source: BANXICO
1995
1996
1997
Exports
1998
1999
Imports
2000
2001
2002
Trade Balance
2003
2004
Mexico’s Exports have Experienced Greater Growth
than Overall World Exports…
Merchandise Exports
Index 1993=100
325
350
300
250
216
200
Mexico's
exports to
FTA
partners
Mexico's
exports to
non-FTA
partners
166
150
World
Exports
100
1993
1994
1995
1996
1997
1998
1999
2000
2001
Source: Ministry of Economy with data from Banxico and WTO
2002
2003
Mexico is the World’s 8th Largest Trading Nation
Main trading nations 2003
2,400
2,224
2,026
US billion dollars
2,000
1,600
1,200
855
851
800
518
462
400
373
344
South
Korea
Mexico
0
EU*
Source: WTO 2004
* excluding intra-EU trade
US
Japan
China
Canada
Hong
Kong
Mexico has Diversified its Export Structure
1982
2004
Manufacturing
s 25 %
Agriculture
5%
Oil
12%
Agriculture
3%
Manufacturing
85%
Oil
70%
Source: Ministry of Economy with data from Banxico.
Mexico is the Second Largest Market for US goods
US exports
1993
2004
100
Canada
48
Japan
26
UK
Germany
110
* Mexico
45
* Mexico
190
Canada
19
US billion dollars
Fuente: Ministry of the Economy with data from USDOC
* Ministry of the Economy with data from BANXICO
54
Japan
UK
37
China
35
US billion dollars
Today, Mexico is:

The U.S. Second Largest Trading Partner, after
Canada

A NAFTA Trade Member whose Trade with the U.S. and
Canada has Almost Tripled since 1994

Mexico’s Trade Leads Latin America with 44% Share
of the Region’s Total Exports and 49% of its Total
Imports

The First Country in the Region with an FTA with
Japan

Asia-Pacific is Mexico’s Priority in its Trade and
Investment Diversification Strategy
Mexico FDI Flows. US$ 173 Billion From 1994-2005
FDI in Mexico by Country
FDI in Mexico by Sector
Others 7.4%
Japan 2.3%
Germany 2.6%
Canada
3.3%
Other Serv.2
7.8%
USA
62.5%
Commerce
11.0%
UK 3.4%
Agriculture and
Infrastructure
8.5%
Manufacturing
49.3%
Netherlands
7.6%
Spain 9.4%
Finan. Serv.
23.4%
1Agricultural,
Source: Ministry of Economy . Notified investment to the Registro
Nacional de Inversiones Extranjeras (RNIE) in September 30*, 2000,
plus maquiladoras’ fix asset imports.
Mining, Constructing, Electricity, Transp.
and Communic, and Water.
2Social and communal services: hotels and
restaurants, professional, technical and personal.
MEXICO PROMOTES GROWTH
AND INNOVATION
- Automotive
- Electronics
- Software, IT
- Aerospace
- Textile
- Agriculture
- Tourism
- Commerce
- Construction
- Maquiladoras
- Chemical
- Shoe and
Leather
Mexico’s Policies in Support of Growth and
Innovation



Providing economic, fiscal and regulatory
incentives for thousands of suppliers to locate
in Mexico
Supporting the development of local innovation,
research and development through
university/business/local government
partnerships
Significantly increase investments in physical
and social infrastructure
AUTOMOTIVE
Mexico’s Manufacturing Evolution
(Enero 1999 = 100)
Value Added
Content
Manufacturing
Plants
Employment
A
J
O
00
A
J
O
01
A
J
O
02
A
J
O
03
A
J
O
99
170
160
150
140
130
120
110
100
90
PUBLIC POLICY FOR
COMPETITIVENESS
FISCAL
ENERGY
FINANCIAL
PENSION
SYSTEM
LABOR
STRUCTURAL
REFORMS
GOVERNANCE
TRANSPARENCY
EDUCATION
JUDICIAL
SYSTEM
INFRASTRUCTURE
Mexico-Japan Complementarities
Technology and Innovation
 Manufacturing Savings
 Market Access
 Intra-Trade Growth, Particularly in
Automotive and Electronics
 Transportation Logistics
 Global Security Considerations
 Investment Protection, including IPR

Mexico-Japan Trade and
Investment Complementarities
JAPAN
World’s 2nd Largest Economy
Population Age Average of 42 years
Highly Educated Labor Force
High Saving Rates
Its Companies are a Major Source of FDI
Leading Producer and Exporter of High
Technology Products
Technology Companies Outsourcing
Production Abroad
Importer of 60% of its Food
Consumption, (3er World Largest Importer)
MEXICO
World’s 12th Economy
Population Age Average of 24 years
Abundance on Young and Capable Workers
Economy in Need of Maintaining Growing Levels
Población
con edad
promedio
deFDI
27 años
of Domestic
Investment
and
4th Place Among Emerging Economies in
FDI Attraction
Buyer of High Technology Products and
Systems
Producer and Exporter of High-value
Added Goods. Maquiladora Outsourcing
Producer and Exporter of Agro Food Products.
Promoting Mexico-APEC Business
Partnerships





Mexico is committed to further economic ties and
opportunities with Asia-Pacific
Mexico’s trade agreements open up investment and market
access opportunities
More than 12 years of trade achievements under NAFTA,
the world’s largest market, gives Mexico an edge on
logistics, transportation and security issues, customs and
trade facilitation.
Mexico, along with Canada and the U.S. conform a
transportation and logistics hub for Asia Pacific trade
The latter is key to APEC and Asia Pacific companies
seeking North America’s market access, via Mexico
Mexico: Key Aspects









World’s 12th Largest Economy (2005)
GDP: $775.2 billion (US$) (2005)
GDP/Capita: US$ 7,454
3.0 % of GDP Growth in 2005
Population: 104 Million (2005)
50% is under the age of 27
Projected population in 2025: 125.9
million
Inflation: 3.3 %, 2005
Stable Currency: Floating Regime Since
1995!
Mexico-Japan EPA Main Features

It contains FTA known disciplines, in addition to bilateral
cooperation mechanisms to promote economic growth.
FTA Disciplines
 Trade in goods
(including agriculture)
Sanitary and Phytosanitary
Measures
Technical Regulations
 Rules of Origin
 Customs Procedures
 Safeguard measures
 Investment
 Services
 Government Procurement
 Competetion Policies
 Dispute Settlement
Bilateral Cooperation
 Trade and Investment
Promotion
 Support Industries
 SMEs
 Science and Technology
 Education and Human Talent
Development
 Intellectual Property
 Agriculture
 Tourism
 Environment
 Improvement of the Business
Environment
Mexico-Japan EPA Trade Sectors
% of fractions
Tariff Elimination
Percentage of tariffs fractions of each country
40%
100
9%
75
50
25
0
4%
91%
Immediate

5 years
 Immediate access: capital
goods, electric
manufacturers, electronic.
 5 years: Some Chemical
Products, Auto Parts, Medical
Equipment and Railroads.
 10 years: Pharmaceuticals,
49.5%
Chemical Products,
Mexico*
Cosmetics, Soaps, Rubber,
5%
Wood, Plastic Products, Steel
Japan
10 years
and Glass.
Special Cases

Japanese Market Access

Mexican Market Access

Shoes and leather

Steel

Apparel

Automotive
* Para México, el 1.5% de las fracciones arancelarias se desgravarán en plazos intermedios
Fuente: Secretaría de Economía.
Mexico-Japan Market Access
Farming and Fishing sectors
 Access to the Japanese Market:

Immediate access: green coffee, lemon, beer, avocado, tequila,
mangoes.

5 year phase-out: grapes, toasted coffee, melons, sauces, frozen
strawberries, nuts.

10 year phase-out: banana, processed vegetables, jams, etc.

Preferential access for sensible products, subject to quotas: pork meat,
beef, chicken, chicken parts, oranges and orange juice

At third year, negotiation review of selected products: pineapple, sugar
and wheat.
 Incorporation of all Products of Interest to Mexico.

Immediate and unrestricted access: yellow fin fresh and canning tuna,
shrimp, some crustaceans and squid.

Access under negotiated quota: sardines and calamari.
MEXICO – JAPAN ECONOMIC PARTNERSHIP AGREEMENT
Total Trade 2000 - 2005
Japan's Exports to Mexico
Japan's Imports from Mexico
10,000
9,329.5
9,000
Million US$
8,000
7,625.6
6,680.8
7,000
6,123.7
6,000
5,550.7
5,386.7
5,000
4,000
3,000
2,000
1,000
0
Year
2000
2001
2002
2003
2004
Source: Ministry of Finance of Japan
Exchange rate: 2000:US$1=107.36yen, 2001:US$1=120.95yen, 2002:US$1=125.65yen, 2003:US$1=116.41yen,
2004:US$1=119.18yen, 2005:US$1=112.03 yen. Figures are rounded off not necessarily adding up to the totals.
Elaborated by the Office of Representation in Japan of Mexico’s Secretary of Economy
2005
MEXICO – JAPAN ECONOMIC PARTNERSHIP AGREEMENT
TOTAL TRADE SINCE EPA’s IMPLEMENTATION
April 2004 – Jan. 2005
April
551.2
May
527.9
June
551.9
July
551.
2
645.2
551.
9
637.
5
October
601.3
0
150
Million US$
300
450
600
794.
4
750
38.2
22.6
974.0
976.0
601.
3
40.5
1,025.5
70.5
1,025.5
520.
1
520.1
January
39.8
950.5
694.
7
694.7
December
13.3
722.1
687.
7
794.4
November
27.3
775.4
687.7
September
22.2
702.6
554.
6
554.6
August
31.8
726.5
527.
9
637.5
R.S. (%)¹
April 2005 – Jan. 2006
774.
774.3 3
900
1050
TOTAL: 6,121.3
0
150
300
450
600
750
900
TOTAL: 8,272.1
48.9
1050
0
Source: Ministry of Finance of Japan
*Exchange rate: US$1=112.83 yen. Figures are rounded off not necessarily adding up to the totals.
Note: ¹R. S. - Ratio to the same month of previous year
Elaborated: Office of Representation in Japan of Mexico’s Secretary of Economy
20
40
60
80
TOTAL: 35.1%
100
Mexico’s Key Aspects…






A Consolidated Form of Democratic Government.
Three Branches of Government: Executive,
Legislative, Judicial.
Land Expanse: 1.967 million square kilometers
3,000 Kilometer Border with the United States
In 2002, the U.S.-Mexico Border had 254 million
“land-port” crossings, including more than 75
million cars and 3.5 million trucks
31 States, 1 Federal District
Presidential Elections: July 2006
Thank you!
Raul Urteaga Trani
Minister, Trade & Investment
Embassy of Mexico
Tokyo, Japan
[email protected]