Eleventh anniversary of the Mexico-European Union FTA - Awex
Eleventh anniversary of the Mexico-European Union FTA - Awex
Eleventh anniversary of the Mexico-European Union FTA - Awex
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TABLE OF CONTENTS<br />
<strong>Eleventh</strong> <strong>anniversary</strong> <strong>of</strong> <strong>the</strong><br />
<strong>Mexico</strong>-<strong>European</strong> <strong>Union</strong> <strong>FTA</strong><br />
MEXICO<br />
Trade Balance<br />
Financial and Economic Indicators<br />
BUSINESS<br />
<strong>Mexico</strong>’s Official Gazette Notices<br />
EU Official Journal<br />
<strong>Eleventh</strong> <strong>anniversary</strong> <strong>of</strong> <strong>the</strong><br />
<strong>Mexico</strong>-<strong>European</strong> <strong>Union</strong> <strong>FTA</strong><br />
Eleven years ago, on July 1 st , 2000, <strong>Mexico</strong> and <strong>the</strong> <strong>European</strong> <strong>Union</strong><br />
(EU) put into force a Free Trade Agreement (MEU<strong>FTA</strong>) which is part<br />
<strong>of</strong> <strong>the</strong>ir Economic Partnership, Political Co-ordination and Cooperation<br />
Agreement, that also promotes political dialogue and intensifies<br />
co-operation between both partners. .<br />
MEU<strong>FTA</strong> -<strong>the</strong> first free trade agreement between Europe and <strong>the</strong> American<br />
continent- has boosted bilateral trade and investment. Additionally, <strong>Mexico</strong> has<br />
signed Bilateral Investment Treaties (BIT) with 16 EU Member States*. All <strong>the</strong><br />
above has allowed to create exceptional conditions for business development<br />
between <strong>Mexico</strong> and <strong>the</strong> EU.<br />
Since 2007, as foreseen in <strong>the</strong> MEU<strong>FTA</strong>, all bilateral trade for industrial products<br />
is free <strong>of</strong> duties. Moreover, since 2003 <strong>the</strong> EU liberalized all <strong>the</strong> industrial<br />
products originating from <strong>Mexico</strong>.<br />
Meanwhile, agricultural trade has been subject to a gradual and longer liberalization<br />
process. Nowadays, 79% <strong>of</strong> EU’s agricultural imports from <strong>Mexico</strong> are<br />
free <strong>of</strong> duties, while <strong>Mexico</strong> has already liberalized 73% <strong>of</strong> its agricultural imports<br />
from <strong>the</strong> EU in that sector.<br />
Bilateral Trade<br />
After a historic decline in international trade in 2009, a global recovery is now<br />
underway; and trade between <strong>Mexico</strong> and <strong>the</strong> EU is not <strong>the</strong> exception. In fact,<br />
in 2010 bilateral trade reached more than 50 billion dollars (bd), representing<br />
an increase <strong>of</strong> 21% compared to 2009.<br />
Fur<strong>the</strong>rmore, trade between <strong>Mexico</strong> and <strong>the</strong> EU has grown 170% compared<br />
with 1999 (year before <strong>the</strong> entry into force <strong>of</strong> MEU<strong>FTA</strong>). In contrast, EU trade<br />
with o<strong>the</strong>r partners has increased 148% in <strong>the</strong> same period. Meanwhile, <strong>Mexico</strong>’s<br />
trade with <strong>the</strong> rest <strong>of</strong> <strong>the</strong> world grew 113%, which demonstrates that, for<br />
both parties, bilateral trade is more dynamic than with <strong>the</strong> rest <strong>of</strong> <strong>the</strong>ir respective<br />
trade partners.<br />
(Continues on page 2)<br />
June 2011<br />
Year 11, no. 6<br />
* Austria, Belgium, Czech Republic, Denmark, Finland, France, Germany, Greece, Italy,<br />
Luxembourg, <strong>the</strong> Ne<strong>the</strong>rlands, Portugal, Slovak Republic, Spain, Sweden and United Kingdom.
<strong>Eleventh</strong> <strong>anniversary</strong> <strong>of</strong> <strong>the</strong> <strong>Mexico</strong>-<strong>European</strong> <strong>Union</strong> <strong>FTA</strong><br />
(Continues from page 1)<br />
18.5 22.2 23.8<br />
23.4<br />
13.2 15.4 16.9 17.2 18.7 21.8<br />
5.3 6.8 6.9 6.2 7.4 8.6<br />
Mexican exports to <strong>the</strong> EU<br />
Bilateral Trade <strong>Mexico</strong>-EU<br />
(Billion USD)<br />
26.1<br />
30.4<br />
99 00 01 02 03 04 05 06 07 08 09 10<br />
EU's Imports<br />
In 2010, Mexican exports to <strong>the</strong> EU reached 17.4 bd,<br />
24% more than in 2009; consolidatating <strong>the</strong> EU’s position<br />
as <strong>Mexico</strong>’s second export market.<br />
It is worth highlighting that since <strong>the</strong> entry into force <strong>of</strong><br />
MEU<strong>FTA</strong>, Mexican exports to <strong>the</strong> EU have increased<br />
230%, equivalent to almost <strong>the</strong> double growth rate <strong>of</strong><br />
Mexican sales to <strong>the</strong> rest <strong>of</strong> <strong>the</strong> world in <strong>the</strong> same period<br />
(1999 -2010).<br />
Thanks to this dynamics, <strong>the</strong> EU’s participation as a destination<br />
for Mexican exports climb to almost 5% in 2010,<br />
positioning <strong>Mexico</strong> as EU’s 24th supplier. In contrast<br />
such participation reached only 4% in 1999.<br />
In <strong>the</strong> period 1999-2010, sectors accounting for <strong>the</strong> largest<br />
shares <strong>of</strong> <strong>the</strong> increase in value terms <strong>of</strong> Mexican exports<br />
to <strong>the</strong> EU included: machinery and transportation<br />
equipment (45.3% <strong>of</strong> <strong>the</strong> increase), oil and gas (20.6%)<br />
and chemical products (7.6%).<br />
37.6<br />
42.4<br />
50.5<br />
26.1 29.2 33.9<br />
39.3<br />
11.5 13.3 16.6 20.2 14.0 17.4<br />
<strong>Mexico</strong>'s Imports<br />
Source: Mynistry <strong>of</strong> <strong>the</strong> Economy <strong>of</strong> <strong>Mexico</strong> with data from Banxico and Eurostat<br />
59.5<br />
41.3<br />
27.3<br />
50.0<br />
32.6<br />
Mexican imports from <strong>the</strong> EU<br />
In 2010 Mexican imports from <strong>the</strong> EU reached 32.6 bd,<br />
achieving an increase <strong>of</strong> 19% compared to 2009, wherewith<br />
<strong>the</strong> EU consolidates its position as <strong>Mexico</strong>’s third<br />
supplier, only behind <strong>the</strong> United States and China.<br />
The EU’s share in Mexican purchases from abroad was<br />
10.8% in 2010, which compares favorably with <strong>the</strong> 9.3%<br />
in 1999.<br />
Since MEU<strong>FTA</strong> came into effect, Mexican imports from<br />
<strong>the</strong> EU surged 146.7%, in contrast with <strong>the</strong> growth rate <strong>of</strong><br />
109% <strong>of</strong> <strong>the</strong> rest <strong>of</strong> <strong>the</strong> world.<br />
Between 1999 and 2010, <strong>the</strong> Mexican import sectors that<br />
have contributed with <strong>the</strong> greatest share <strong>of</strong> <strong>the</strong> increase<br />
in Mexican imports from <strong>the</strong> EU, in terms <strong>of</strong> value, included<br />
machinery and transportation equipment (35.8% <strong>of</strong><br />
<strong>the</strong> increase), chemical products (21.0%) and oil and gas<br />
(15.7%).<br />
It is important to highlight that more than three quarters <strong>of</strong><br />
<strong>the</strong>se imports are capital goods (18%) and inputs (60%)<br />
used on manufacturing process, whereupon MEU<strong>FTA</strong><br />
allows to reduce production costs and improves <strong>the</strong> competitiveness<br />
<strong>of</strong> firms established in <strong>Mexico</strong>. Additionally,<br />
producing high quality consumer goods in <strong>Mexico</strong> at lower<br />
prices, brings benefits for Mexican families.<br />
Thanks to <strong>the</strong> MEU<strong>FTA</strong>, EU’s companies that consolidate<br />
production in <strong>Mexico</strong> increase <strong>the</strong>ir capacity to compete<br />
internationally at lower costs, taking advantage <strong>of</strong><br />
<strong>FTA</strong>’s network great potential, that grant preferential access<br />
from <strong>Mexico</strong> to 43 countries in North America, Europe,<br />
Latin America and Japan.<br />
(Continued on page 3)<br />
<strong>Mexico</strong>’s Total Trade in April<br />
(billion US$)<br />
2010 2011 %<br />
Total 49.6 55.2 11.2<br />
Exports 24.8 28.0 12.6<br />
Exports (excluding oil) 21.4 23.4 9.0<br />
Imports 24.8 27.2 9.8<br />
Source: Banco de México<br />
2<br />
<strong>Mexico</strong>’s Trade with EU and E<strong>FTA</strong><br />
(million US$)<br />
January - April 2010 2011 %<br />
Exports to <strong>the</strong> EU 4,276.8 5,863.5 37.1<br />
Imports from <strong>the</strong> EU 9,663.0 11,020.7 14.1<br />
Exports to <strong>the</strong> E<strong>FTA</strong> 356.1 512.9 44.0<br />
Imports from <strong>the</strong> E<strong>FTA</strong> 473.3 545.9 15.3<br />
Source: Banco de México
<strong>Eleventh</strong> <strong>anniversary</strong> <strong>of</strong> <strong>the</strong> <strong>Mexico</strong>-<strong>European</strong> <strong>Union</strong> <strong>FTA</strong><br />
(Continues from page 2)<br />
Enhanced bilateral investment flows<br />
MEU<strong>FTA</strong> and <strong>the</strong> BITs have also generated higher level<br />
<strong>of</strong> investments between <strong>Mexico</strong> and <strong>the</strong> EU given that in<br />
addition to guaranteeing <strong>the</strong> free flow <strong>of</strong> investment, <strong>the</strong>se<br />
instruments ensure protection for investors and provide<br />
a mechanism to solve any eventual dispute.<br />
<strong>Mexico</strong> has received almost 108 bd <strong>of</strong> Foreign Direct Investment<br />
(FDI) from <strong>the</strong> EU in <strong>the</strong> period 1994-2010,<br />
highlighting that most <strong>of</strong> this stock, 93.8 bd, was received<br />
since MEU<strong>FTA</strong>’s entry into force (2000-2010), which represent<br />
a growth <strong>of</strong> more than five times than in <strong>the</strong> period<br />
94-99.<br />
303%<br />
61.3<br />
247.0<br />
14.1<br />
FDI in <strong>Mexico</strong><br />
(Billion USD)<br />
Growth (%)<br />
568%<br />
93.8<br />
Total EU U.S. Rest <strong>of</strong> <strong>the</strong><br />
World<br />
Source: Ministry <strong>of</strong> <strong>the</strong> Economy<br />
247%<br />
125.3<br />
36.1<br />
94-99<br />
152%<br />
27.9<br />
11.1<br />
Moreover, it is worth mentioning that in 2010 only, FDI<br />
flows from <strong>the</strong> EU almost duplicated those in 2009 and<br />
that EU contribution to total FDI in <strong>Mexico</strong> reached a historical<br />
participation <strong>of</strong> 62%.<br />
Among <strong>the</strong> investment accumulated in <strong>Mexico</strong> between<br />
2000 and 2010, <strong>the</strong> EU accounted for 39% <strong>of</strong> <strong>the</strong> total<br />
received, with more than 10 thousand companies with<br />
<strong>European</strong> capital operating in <strong>the</strong> country. The top three<br />
most active countries are: Spain, which accounted for<br />
40.7%, <strong>the</strong> Ne<strong>the</strong>rlands, 38.7%, and <strong>the</strong> United Kingdom<br />
8.5%. These countries were, respectively <strong>the</strong> second,<br />
third and fifth investors in <strong>Mexico</strong>.<br />
In terms <strong>of</strong> sectors, <strong>the</strong> bulk <strong>of</strong> FDI from <strong>the</strong> EU has been<br />
allocated to manufacturing activities (38.4%), mainly in<br />
processed food, chemical and automotive industries. O<strong>the</strong>r<br />
important part <strong>of</strong> <strong>the</strong> FDI has also been oriented on financial<br />
services (25.9%).<br />
MEU<strong>FTA</strong> has also promoted <strong>Mexico</strong>’s investment in <strong>the</strong><br />
EU. Between 1995 and 2009, Mexican companies invested<br />
14.4 billion euros in <strong>the</strong> EU, <strong>of</strong> which 12.8 were carried<br />
out since <strong>the</strong> entry into force <strong>of</strong> <strong>the</strong> MEU<strong>FTA</strong> (2000).<br />
MEU<strong>FTA</strong> boosts <strong>the</strong> recovery <strong>of</strong> bilateral trade and<br />
investment<br />
2010 was an exceptional year for <strong>the</strong> bilateral economic<br />
relationships, experiencing a quick recovery after <strong>the</strong> deep<br />
global recession in 2009, <strong>the</strong> deepest since <strong>the</strong> Second<br />
World War.<br />
In this context, MEU<strong>FTA</strong> demonstrated its great potential<br />
to reactivate trade and investment flows between <strong>Mexico</strong><br />
and <strong>the</strong> EU, wherewith now our companies are better positioned<br />
to take advantage <strong>of</strong> <strong>the</strong> business opportunities<br />
that are showing up in this recovery environment and reconfiguration<br />
<strong>of</strong> world markets.<br />
Indeed, <strong>European</strong> and Mexicans companies are uniting<br />
forces to consolidate <strong>the</strong>ir positions in <strong>the</strong> most attractive<br />
markets and sectors with better perspectives <strong>of</strong> growth.<br />
<strong>Mexico</strong> has been recognized by many international organizations<br />
as one <strong>of</strong> <strong>the</strong> best places in <strong>the</strong> world to do business<br />
–it is even considered as <strong>the</strong> best in Latin America<br />
(see “TradeLinks” <strong>of</strong> December 2010); <strong>the</strong>refore <strong>European</strong><br />
companies are taking advantage <strong>of</strong> <strong>the</strong> strategic position<br />
and competitive advantages that <strong>Mexico</strong> <strong>of</strong>fers to improve<br />
and enlarge <strong>the</strong>ir position in <strong>the</strong> global markets.<br />
MEU<strong>FTA</strong> supports our return to <strong>the</strong> path <strong>of</strong> economic<br />
growth, <strong>the</strong> companies development, and not less important,<br />
jobs creation for Mexicans and <strong>European</strong>s.<br />
In any case, our challenge remains to take even more advantage<br />
<strong>of</strong> <strong>the</strong> MEU<strong>FTA</strong> considering all <strong>the</strong> great potential<br />
that still exists to widen and deepen <strong>the</strong> economic relationship<br />
between <strong>Mexico</strong> and <strong>the</strong> EU.<br />
<strong>Mexico</strong>’s Economic Indicators<br />
Inflation rate: -0.74% (May, 2011);<br />
3.2% (2011, annual)<br />
Industrial Production: 1.4% (April 2011 / April 2010)<br />
Manufacturing: 2.1%; Construction: 1.9%, Mining: -3.1%<br />
Global Index <strong>of</strong> Economic Activity: 3.58% (March 2011/March 2010)<br />
Consumer Confidence Index: 89.3 pts. (May 2011)<br />
4.7 percentage points (May 2011 / May 2010)<br />
Open unemployment rate: 5.2 % (May 2011) Source: INEGI<br />
<strong>Mexico</strong>’s Financial Indicators<br />
Foreign exchange rate: 11.89 peso/dollar (June 27, 2011)<br />
International reserves: $129,569 million dollars (June 17, 2011)<br />
Mexican stock market index (IPC): 35,602 (June 27, 2011)<br />
Interest rate treasury bonds CETES 28 days:<br />
4.35 % (June 23, 2011)<br />
Source: Banco de <strong>Mexico</strong><br />
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<strong>Mexico</strong>’s Official Gazette Notices<br />
04/05/2011 Decree announcing <strong>the</strong> Additional Protocol to <strong>the</strong> Agreement between <strong>Mexico</strong> and <strong>the</strong> International<br />
Atomic Energy Agency so as to Application <strong>of</strong> Safeguard in relation to <strong>the</strong> Treaty for <strong>the</strong> Prohibition <strong>of</strong><br />
Nuclear Weapons in Latin America and <strong>the</strong> Caribbean and <strong>the</strong> Nuclear non-Proliferation Treaty, done in<br />
Vienne on March 29, 2004.<br />
06/05/2011 Agreement that publicizes <strong>the</strong> Second Additional Protocol to <strong>the</strong> Economic Complementation<br />
Agreement No. 55 celebrated between Mercosur and <strong>Mexico</strong>.<br />
10/05/2011 Decree amending, adding and abolishing certain provisions to <strong>the</strong> Federal Law <strong>of</strong> Economic<br />
Competition, <strong>the</strong> Federal Criminal Code and <strong>the</strong> Federal Fiscal Code.<br />
13/05/2011 Decree announcing <strong>the</strong> Arrangement between <strong>Mexico</strong> and Australia on Air Services, done in<br />
<strong>Mexico</strong> City on April 9, 2010.<br />
EU Official Journal<br />
11/05/2011 L122 Council Implementing Regulation (EU) No 443/2011 <strong>of</strong> 5 May 2011 extending <strong>the</strong> definitive<br />
countervailing duty imposed by Regulation (EC) No 598/2009 on imports <strong>of</strong> biodiesel originating in <strong>the</strong> United<br />
States <strong>of</strong> America to imports <strong>of</strong> biodiesel consigned from Canada, whe<strong>the</strong>r declared as originating in<br />
Canada or not, and extending <strong>the</strong> definitive countervailing duty imposed by Regulation (EC) No 598/2009 to<br />
imports <strong>of</strong> biodiesel in a blend containing by weight 20 % or less <strong>of</strong> biodiesel originating in <strong>the</strong> United States<br />
<strong>of</strong> America, and terminating <strong>the</strong> investigation in respect <strong>of</strong> imports consigned from Singapore<br />
11/05/2011 L122 Council Implementing Regulation (EU) No 444/2011 <strong>of</strong> 5 May 2011 extending <strong>the</strong> definitive<br />
anti-dumping duty imposed by Regulation (EC) No 599/2009 on imports <strong>of</strong> biodiesel originating in <strong>the</strong> United<br />
States <strong>of</strong> America to imports <strong>of</strong> biodiesel consigned from Canada, whe<strong>the</strong>r declared as originating in Canada<br />
or not, and extending <strong>the</strong> definitive anti-dumping duty imposed by Regulation (EC) No 599/2009 to imports<br />
<strong>of</strong> biodiesel in a blend containing by weight 20 % or less <strong>of</strong> biodiesel originating in <strong>the</strong> United States <strong>of</strong><br />
America, and terminating <strong>the</strong> investigation in respect <strong>of</strong> imports consigned from Singapore<br />
14/05/2011 L127 Council Decision <strong>of</strong> 16 September 2010 on <strong>the</strong> signing, on behalf <strong>of</strong> <strong>the</strong> <strong>European</strong> <strong>Union</strong>,<br />
and provisional application <strong>of</strong> <strong>the</strong> Free Trade Agreement between <strong>the</strong> <strong>European</strong> <strong>Union</strong> and its Member<br />
States, <strong>of</strong> <strong>the</strong> one part, and <strong>the</strong> Republic <strong>of</strong> Korea, <strong>of</strong> <strong>the</strong> o<strong>the</strong>r part<br />
14/05/2011 L128 Council Implementing Regulation (EU) No 451/2011 <strong>of</strong> 6 May 2011 imposing a definitive<br />
anti-dumping duty and collecting definitively <strong>the</strong> provisional duty imposed on imports <strong>of</strong> coated fine paper<br />
originating in <strong>the</strong> People's Republic <strong>of</strong> China<br />
14/05/2011 L128 Council Implementing Regulation (EU) No 452/2011 <strong>of</strong> 6 May 2011 imposing a definitive<br />
anti-subsidy duty on imports <strong>of</strong> coated fine paper originating in <strong>the</strong> People's Republic <strong>of</strong> China<br />
31/05/2011 L145 Regulation (EU) No 511/2011 <strong>of</strong> <strong>the</strong> <strong>European</strong> Parliament and <strong>of</strong> <strong>the</strong> Council <strong>of</strong> 11 May<br />
2011 implementing <strong>the</strong> bilateral safeguard clause <strong>of</strong> <strong>the</strong> Free Trade Agreement between <strong>the</strong> <strong>European</strong> <strong>Union</strong><br />
and its Member States and <strong>the</strong> Republic <strong>of</strong> Korea<br />
<strong>Mexico</strong>-EU Trade Links is a monthly informational newsletter published by <strong>the</strong> Mexican Mission to <strong>the</strong> EU,<br />
Representative <strong>of</strong>fice <strong>of</strong> <strong>the</strong> Ministry <strong>of</strong> <strong>the</strong> Economy. Av. Franklin Roosevelt 94, 1050, Brussels, Belgium.<br />
For more detailed information or questions regarding this issue please contact us: e-mail info@economia-bruselas.be,<br />
fax: 32 (02) 644 04 45, or visit our website at: http://www.economia-bruselas.gob.mx<br />
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