Download Why Mexico

MEXICO & NAFTA
Opportunities for
Chinese Companies
Carlos Santos
Trade Commissioner of Mexico
CIFIT, Xiamen, 9 Sept. 2006.
www.investinmexico.com
Why Mexico?
1.
2.
3.
4.
5.
6.
7.
Geographic Location
Free Trade Agreements
Economic Stability
Key Infrastructure
Investment Climate
Labor Force
Success Stories
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Geographic Location
• Easy and fast communications between
Mexico and North America, South America,
Europe and Asia, as well as economic ties
between these regions.
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Free Trade Agreements
• No country in the world has signed more
trade agreements with other nations than
Mexico. These agreements can only
increase companies´ competitiveness in
those markets
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墨
加拿大
美国
欧盟
冰岛
瑞士
列支敦士登
挪威
西
哥
的
自
由
尼加拉瓜
危地马拉
以色列
洪都拉斯
日本
哥斯达黎加
贸
委内瑞拉
易
协
定
哥伦比亚
玻利维亚
智利
萨尔瓦多r
乌拉圭
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6
NAFTA
• The North America Free Trade Agreement (NAFTA). In
January 1994, Mexico joined Canada and the United
States in the North American Free Trade Agreement
(NAFTA), after 11 years of existance tariffs have been
eliminated on 84.5% of all non-oil and non-agricultural
Mexican exports to the United States and 79% of exports
to Canada. The current duty free temporary import
programs were eliminated as of January 1, 2001 for
trade between Mexico, the United States and Canada.
• By the year 2009, there will be no more tariffs on
products traded by the 3 countries.
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Electronics Sector
• Mexico’s agreements, eliminates tariffs
on imports from all the world to:
– Computer products (Computers, monitors,
printers, scanners)
– Telecommunication products (modems,
cellular phones, office switching equipment,
switching transmission equipment, audio &
video)
– Other electronics goods (calculators,
photocopy machines, cash registers).
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Tariffs on raw materials and inputs of other
sectors, such as steel, plastics, and
chemical products, only to be used by the
electronic,
computer
and
telecommunications firms, were eliminated
since September 2002 (278 tariff codes in
the electronics PROSEC)
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•
The National Program for the Competitiveness
of the Electronics Industry and High
Technology includes issues such as:
–
–
–
–
–
–
–
Designing a competitive fiscal policy
Promoting a competitive tariff structure
Efficient foreign trade processes
Develop the supply chain
Promoting technological development
Upgrading human capital
Generating an adequate infrastructure
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Economic Stability
• Our economic figures indicate a well
established and sustained economic
program aimed at growth and sharing this
growth with all the companies involved.
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Highlights of the Mexican Economy
 The Mexican economy has followed a very dynamic convergence process
with the US economy in recent years
 Mexico´s trade reforms have provided continued investment opportunities
and strengthened growth prospects
 The
financial system has been strengthened and its regulation
significantly improved and modernized
 The Central Bank has consolidated as fully autonomous and independent
 A clear division of powers has emerged between the Executive, the
Legislative and the Judicial branches
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12
Fiscal Policy
Strong track record of fiscal discipline
Monetary Policy
Inflation control
Exchange Rate Policy
Fully flexible
Financial Policy
Strengthening of the domestic financial system
Public Debt Management
Improvement of the amortization schedule,
reduction of exchange and interest rate risks
Openness of the Economy
Take advantage of international free trade
agreements
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13
Private Sector Forecast
(Banxico Survey, August 2005)
Description
2005
2006/f
3.1
3.5
3.68
3.8
11.09
11.56
9.18
8.62
-9,253
-12,825
Gross Domestic Product
Real % growth
Inflation
Dec./Dec.
Nominal Exchange Rate
Year closing
Interest Rates
Cetes for 28 days, %
Current Account
Millions of dollars
Source: Banxico
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 1st exporter in Latin America
 8th exporter worldwide (considering European Union
as a whole)
 3rd commercial partner of the United States of
America as of December 31st, 2004
PRINCIPAL US TRADE PARTNERS(1)
1998
1999
2000
2001
2002
2003
2004
174.8
198.3
229.2
216.9
210.6
224.2
255.9
China
71.2
81.8
100.1
102.2
125.2
152.4
196.7
Mexico
94.7
109.7
135.9
131.4
134.7
138.1
155.8
121.9
131.4
146.6
126.6
121.5
118.0
129.6
Canada
Japan
(1) Total Trade USD Billion
Source: US Department of Commerce and EFTA
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15
Mexico’s Foreign Trade
Top Ten Partners 2004
IMPORTS FROM:
EXPORTS TO:
83.8%
1.
U.S.A.
56.2%
2. Canada
1.7%
2.
China
7.3%
3. Spain
1.0%
3.
Japan
5.4%
4. Germany
0.9%
4.
Germany
3.6%
5. Japan
0.6%
5.
Canada
2.7%
6. China
0.5%
6.
Korea
2.7%
7. Brazil
0.4%
7.
Brazil
2.2%
8. United Kingdom
0.4%
8.
Taiwan
1.8%
9. Venezuela
0.4%
9.
Malaysia
1.7%
10. Colombia
0.4%
1. U.S.A.
Source: Banco de Mexico
10. Spain
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16
1.4%
China’s Position in
Mexico’s Foreign
Trade Structure
2003
2°-Imports
from China
9.4
2004
14.48
0.46
0.47
2005
Increase
Rate
2006
2005 （April）
Shar
e
17.63
7.96
%
21.75%
0.53
0.45%
%
139.13%
10°Exports
to China
(Unit: US Nillions）
1.13
6.52
Source: Ministry of
Economy of Mexico.
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Investment Climate
• Mexico offers a vast range of opportunities
with benefits for all companies
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Investment Climate
• Between 1994 to 2005 Mexico received
USD $172.7 billion on FDI.
• Annual average of USD $15.7 billion.
• Free Trade Agreements have provided
Legal framework for FDI.
• Largest investors: USA (62%);
Netherlands (8.3%); Spain (8.1%); UK
( 3.8%).
• National Treatment
for
Foreign
Investment.
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Mexico's Key Information
• Mexico is the world´s 9th biggest
economy and the 7th most important
commercial trader.
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Basic Information
•
•
•
•
•
•
Population (est. 2006):
105 million people
Land size:
1,964,375 sq. kms.
Religion:
89% catholic
Climate:
Tropical to desert
Language:
Spanish
Education is mandatory from the age of 6 to 14.
It is also one of the Mexican Government's top
priorities. A large proportion of the Federal
Budget is spentwww.investinmexico.com
on Education
Labor Force
• Mexico´s labor force is young, abundant,
skilled, well educated and eager to fulfill
any labor requirement
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Young Labor Force
• From the total 105 million Mexicans:
 0 to 14
 15 to 64
 65 +
30.6%
63.6%
5.8%
Population Growth is 1.16% per year.
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Success Stories
• There are over 16,000 foreign companies
established in Mexico, where they enjoy a
big local market and a solid platform for
boosting their exports.
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CARLOS SANTOS
TRADE COMMISSIONER OF MEXICO
BANCOMEXT
EMBASSY OF MEXICO
E-MAIL:
[email protected]
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