Mexico’s FTAs: A Competitive Advantage for Manufacturing in Mexico
By Alma R. Ortega López | Institutional Relations at American Industries Group®
In addition to Mexico’s affordable labor rates for an available and skilled workforce, logistics advantages, and proximity to one of the world’s largest consumer markets, the country is characterized by an openness to international trade and actively participates in various multilateral and regional forums. This focus on fostering a strong trade system that provides security for economic growth and foreign direct investment has resulted in Mexico having some of the most trade agreements (FTAs) in the world.
Mexico currently has:
All of these contribute to reducing barriers to trade and minimizing tariffs and export duties to most of the world, providing a clear competitive advantage for companies in various industries. Certain agreements also offer preferential treatment and tariffs for specific sectors. This is the case for the automotive industry in Mexico in two of its most important FTAs, the United States-Mexico-Canada Agreement (USMCA) and the Trade Agreement for the Automotive Sector between MERCOSUR and Mexico. In addition, the Trans-Pacific Partnership (TPP) Agreement focuses on the aerospace industry in Mexico, facilitating over US $1.8 million per year in the trade of light and heavy autos and aeronautic and aerospace products.
Mexico’s goal of promoting integration and competitiveness in global value chains extends far beyond North America through agreements such as the Mexico-EU Trade Agreement and its agreements with Japan, Israel, and numerous other countries around the globe.
Mexico’s trade agreements embody its openness to trade and general culture of welcoming international and US companies manufacturing in Mexico and provide clear rules for exports, investment, and protection of intellectual property rights. By strengthening its political and economic relationships across the globe, Mexico has become one of the world’s most competitive areas for manufacturing, business, and investment.
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