Doing Business with Mexico 1

Team Work,

Team members:

Name: Beatriz Jiménez Guirola ID# 888766

Name: Juan Marcos Lecuona ID# 888193

Name: Horacio Joel ID# 888190

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

Because Mexico used to have a relatively closed economy, and it now has
one of the most open economies in the world. It is currently the country with
the most commercial agreements in the world.

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

Electronic and electrical equipment, Textiles and apparel, Transportation

equipment.

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

The General Agreement on Tariffs and Trade (typically abbreviated GATT)

was the outcome of the failure of negotiating governments to create the
International Trade Organization (ITO). GATT was formed in 1947 and
lasted until 1994, when it was replaced by the World Trade Organization in
1995. The GATT's 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. The GATT was a treaty, not an organization although a small
secretariat occupied what is today the Centre William Rappard in Geneva,
Switzerland. The functions of the GATT were taken over by the World Trade
Organization which was established during the final round of negotiations in
early 1990s.

Mexico joined GATT in 1986

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
 Doing Business with Mexico 2

agreement PER COUNTRY for Mexico. Use the network of trade

agreements for reference of agreements.

IM Ex
País 2008 País 2008
ALADI 5,807.70 ALADI 6,722.40
Alemania 6,251.70 Alemania 2,542.30
Argentina 671.3 Argentina 662.4
ASOCIACIÓN ASOCIACIÓN
EUROPEA DE EUROPEA DE
LIBRE COMERCIO 799.6 LIBRE COMERCIO 355.3
Austria 1/ 379.6 Austria 1/ 22.6
Bélgica 409.1 Bélgica 399.8
Belice 6 Belice 67.1
Bolivia 24.3 Bolivia 44.6
Brasil 2,425.40 Brasil 1,566.30
Canadá 4,692.80 Canadá 3,209.10
CENTROAMÉRICA 855 CENTROAMÉRICA 2,108.90
Chile 1,324.70 Chile 820
CHINA 16,469.80 CHINA 1,067.80
Chipre 0.2 Chipre 7.5
Colombia 486.6 Colombia 1,438.20
Corea 6,574.10 Corea 287.3
Costa Rica 380.1 Costa Rica 466.2
Cuba 2/ 7 Cuba 2/ 138.6
Dinamarca 176.1 Dinamarca 53.4
Ecuador 59.9 Ecuador 261.6
El Salvador 35.2 El Salvador 395.2
Eslovenia 36.2 Eslovenia 5
España 2,054.70 España 2,631.20
Estados Unidos 77,842.20 Estados Unidos 119,697.20
Estonia 16.2 Estonia 4
Finlandia 1/ 222.7 Finlandia 1/ 248.6
Francia 1,777.90 Francia 244.1
Grecia 154.5 Grecia 12
Guatemala 249.7 Guatemala 717.1
Holanda 1,643.80 Holanda 1,141.80
Honduras 119.6 Honduras 241.3
Hong Kong 296.3 Hong Kong 207.5
Hungria 155.7 Hungria 116.3
Irlanda 506.4 Irlanda 92.3
Islandia 3.8 Islandia 2.5
ISRAEL 264.1 ISRAEL 153.8
Italia 2,405.80 Italia 297.3
JAPÓN 7,782.90 JAPÓN 1,051.00
 Doing Business with Mexico 3

Letonia 0.6 Letonia 1.9

Lituania 9.4 Lituania 3.1
Luxemburgo 39.6 Luxemburgo 15.7
Malta 49.8 Malta 1.2
NIC´S 10,922.10 NIC´S 875.8
Nicaragua 64.4 Nicaragua 222
NORTEAMÉRICA 82,535.00 NORTEAMÉRICA 122,906.20
Noruega 99.9 Noruega 24.6
PANAMÁ 19.6 PANAMÁ 391.9
Paraguay 5.3 Paraguay 53
Perú 248.4 Perú 558.9
Polonia 141.2 Polonia 102.2
Portugal 219.7 Portugal 110.1
Reino Unido 1,365.30 Reino Unido 1,065.30
República Checa 201.5 República Checa 34.4
República Eslovaca 51.3 República Eslovaca 3
RESTO DEL RESTO DEL
MUNDO 9,129.10 MUNDO 4,635.10
Singapur 838.2 Singapur 185.6
Suecia 1/ 468.8 Suecia 1/ 67.1
Suiza 695.9 Suiza 328.2
Taiwán 3,213.50 Taiwán 195.4
TOTAL 153,322.80 TOTAL 149,490.60
UNIÓN EUROPEA 18,737.90 UNIÓN EUROPEA 9,222.30
Uruguay 160.2 Uruguay 81.2
Venezuela 394.6 Venezuela 1,097.60

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

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

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

Is the: Southern Common Market among Argentina, Brazil, Paraguay and

Uruguay founded in 1991. Bolivia, Chile, Colombia, Ecuador and Peru
currently have associate member status. Mexico is justa n Observer.

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

The Free Trade Area of the Americas (FTAA) is an attempt to expand the
North American Free Trade Agreement (NAFTA) to every country in Central
America, South America and the Caribbean, except Cuba. Countries
Involved:
 Doing Business with Mexico 4

Antigua and Barbuda Dominican Republic

Argentina El Salvador
Bahamas Grenada
Barbados Guatemala
Belize Guyana
Brazil Haiti
Canada Honduras
Colombia Jamaica
Costa Rica Mexico
Dominica 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)

"I'm sure we will achieve the exchange of technological expertise between

Petrobras and Pemex, and the possibility that these two companies work
together in Mexico," he added.

He added that both companies can work in Brazil or in third countries "have the
political will, have that choice, are two oil giants and I think if the two continue
each individually doing their jobs the two will stop more larger than they can be
if they work in a pool.

The possibility of an alliance with Petrobras in Brazil where the oil could enter to
work with Pemex oil production in Mexico is a good alternative to avoid opening the
national oil company to private capital. And so ourselves and to be producing oil as
the agreement covers the following: the refining, petrochemical, hydrocarbon
exploration and production, but also extend to issues of energy efficiency and
biofuels in this country it would be a much more developed and first world, with the
help of the effectiveness of Brazil's Petrobras.
 Doing Business with Mexico 5

9.- Mention 3 aspects to which trade liberalization has contributed

Cases of NAFTA and Mercosur. NAFTA eliminated most non-tariff barriers to

trade between Mexico and the United States, and reduced in a large proportion,
tariff barriers during the first five years of the agreement started in 1994. Also
established a commitment to eliminate virtually all trade barriers within ten
years, with the exception of a few sensitive sectors, which could prolong the
liberalization process a little further than expected. In addition, access to
financial and capital markets would improve gradually to Mexico's partners in
NAFTA.

Mercosur implemented a program of automatic tariff reductions accompanied

by the elimination of nontariff barriers to intraregional trade, according to a
timetable agreed in advance. In July 1991, tariffs were eliminated on intra-
regional trade by 47 percent and fell by seven percentage points every six
months to June 1994. By December 1994, tariffs were abolished in June 1995
and disappeared nontariff barriers to intraregional trade

Mercosur implemented a program of automatic tariff reductions accompanied by

the elimination of nontariff barriers to intraregional trade. In July 1991, tariffs were
eliminated on intra-regional trade by 47 percent and fell by seven percentage
points every six months to June 1994. By December 1994, tariffs were abolished in
June 1995 and disappeared nontariff barriers to intraregional trade.
regional orientation in trade increased during the nineties, particularly the Latino
Community and Mercosur. Clearly, NAFTA is exceptional, the extraordinarily high
concentration of exports from Mexico and Canada to the U.S.

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

http://www.wto.org/english/res_e/statis_e/its2008_e/its08_toc_e.htm

http://www.wto.org/english/res_e/statis_e/its2008_e/its2008_e.pdf
Doing Business with Mexico 6
 Doing Business with Mexico 7

BIBLIOGRAFÍA:

http://www.cronica.com.mx/nota.php?id_nota=45234