Economics Analysis on Mexico

7/31/2019 Economics Analysis on Mexico

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Economic Analysis on Mexico

S.R. Luthra Institute of Management Page 1

1. Historical Background of MexicoIt has been pointed out that many of the problems of Mexico, particularly problems of

government, stem from the fact that for the first three centuries of its existence the major

function of government in Mexico was to squeeze as much wealth from the country as

possible and send it to Spain. Although Mexico achieved independence from Spain in the

early nineteenth century there was not an abrupt change in the way the society functioned.

Until 1700 the Viceroyalty of New Spain included not only what is now Mexico and its

northern territories which became the states of California, Arizona, New Mexico and Texas

but also Central America to Panama and the Spanish Caribbean possessions of Cuba,

Hispaniola, Puerto Rico and what is now the state of Florida and also the Philippine Islands.

The Viceroy of New Spain resided in Mexico City.

The sentiment for independence from Spain was stimulated by the example set by the British

North American colonies which became the United States. The sentiment became much

stronger in 1808 when Napoleon Bonaparte deposed King Fernando VII and put his brother,

Joseph Bonaparte, on the throne. The elites of the Empire were used to the institutions and

traditions created by those most Catholic of monarchs Charles V and his son Philip II.

In 1808 Napoleon Bonaparte's troops captured Spain and put the Bourbon King Ferdinand

VII in prison. Napoleon's brother Joseph Bonaparte was made King of Spain. This did not set

well with the subjects of the Empire. The representative assembly of Spain, the Cortes, which

had not functioned for a very long time, was revived to govern Spain. This Cortes even

included representatives from the colonial areas.

In New Spain there was opposition to what was going on in Spain by people who felt loyaltyto the king Napoleon had deposed, Ferdinand VII. But there was also opposition in New

Spain to to the status quo.

Open rebellion broke out the little town of Dolores in September of 1810 under the leadership

of the Catholic priest, Father Miguel Higalgo y Costilla. Father Hidalgo called for:


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An end to special status of Amerindians as wards of the throne without the rights ofSpaniards

An end to rule from Spain, in part because Spaniards were bringing the ideas of thegodless French to New Spain

A redistribution of land.

The revolutionaries captured Guadalajara and Guanajuato, a mining center. In Guanajuato the

followers of Father Hidalgo massacred the Creoles. This massacre lost Father Hidalgo the

support of Creoles elsewhere in Mexico. Father Hidalgo marched on Mexico City with a

large but disorganized army of 80,000. The Spanish army defeated the rebel mob inNovember of 1810 so this first Mexican revolution lasted less than two months. Father

Hidalgo was shot in 1811 along with his major supporters.

In 1814 Napoleon's troops left Spain and Ferdinand VII returned to the throne of Spain. He

abrogated the Constitution of 1812 which the Cortes had promulgated in his absence. Spanish

troops were sent to New Spain to destroy the rebellion being led by Father Morelos. Father

Morelos was captured by the Spanish authorities in 1815 and shot.

In 1820 an uprising against King Fernando VII occurred in Spain and wealthy Creoles in

Mexico feared that political changes in Spain could threaten their status in Mexico. This

prompted a conservative movement for independence. The leader of these conservative

revolutionaries turned out to be Augustn Iturbide, a military officer put in charge of

suppressing a rebellion in southern Mexico led by Vincente Guerro. Instead of crushing

Guerro's rebellion General Iturbide joined forces with him. In 1821 they issued a declaration

of independence and the plan for a Mexican monarchy as the Plan de Iguala. The term of thePlan of Iguala included:

Mexico was independent of Spain Roman Catholicism was the sole religion of Mexico No distinction was to be made among the citizens of Mexico on the basis of their

place of birth (Spain versus Mexico)

Mexico would be a constitutional monarchy to be called the Empire of Mexico A representative assembly would formulate a constitution for Mexico


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2. The States of MexicoThe Madero Era

Francisco Madero was a well-meaning member of the upper class. For him, the revolution

was a political matter; a matter of restoring the constitution of 1857 and so forth. For Emilia

no Zapata the revolution was a matter of land reform and a social revolution. Madero was not

prepared to deal with the realities of Mexican politics. Madero ordered Zapata to disband his

army and Zapata complied. Others in the Madero administration did not think Zapata had

disarmed his forces and sent Federal troops to carry out the disarming and disbanding ofZapata's forces. Zapata withdrew with his army into the countryside and no longer supported

Madero. He launched another revolution in the southern states.

In the north, Pascual Orozco also broke with Madero and launched a revolt. The Mexican

army under the command of Victoriano Huerta put down Orozco's revolt.

The son of Porfirio Daz, Flix Daz, tried to launch a revolt from Veracruz but was arrested

and brought to Mexico City. From prison F Daz was able to organize to protests in the

streets of Mexico City. General Huerta was called in by Madero to suppress the protests in

Mexico City. Huerta realized that he had the power to takeover the government of Mexico

and he did so. Huerta had President Madero and Vice President Jos Mara Pino Surez

arrested. He forced their resignations which made him president. Later Madero and Pino

Surez were killed in 1913 while being transferred to prison. As commented earlier, Madero

was a well-meaning member of the upper class who was not capable of dealing with the

realities of power politics in Mexico.


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The Geographic Setting of Mexico

Mexico is a political entity defined not by regional coherence but by conquests. The Spanish

conquistadors conquerered as far north as they could and claimed territory far beyond what

they could control. What is now the political entity of Mexico was a portion of the

viceroyalty of New Spain. It is an artifact of historical events rather than a coherent unit

dictated by geography or the culture of the indigenous population. There are, in effect, three

Medicos: The Mexico of the north, dry and mountainous, the Mexico of the south, wetter and

mixed in terrain, and Yucatan, wetter lowland forest.

The terrain of the north is dominated by two mountain chains. The western chain, the Sierra

Madre Occidental, can be consider an interrupted extention of the Coastal Range of

California. The California Coastal Range also extends into the peninsula of Baja California.

The eastern chain, the Sierra Madre Oriental, is an uninterrupted extention of the Rocky

Mountains of New Mexico. Between the two ranges is a high plain, the Altoplano. There is a

lesser range that cuts across the Altoplano connecting the western and eastern ranges.

In the south where the two ranges of the north merge the range is oriented west to east and is

designated as the Sierra Madre del Sur along the southern coast and the Cordillera

Neovolcnica in the interior.

The plains of the Yucatan Peninsula are geographically distinct from the rest of Mexico.

The Climates of Mexico

Northern Mexico is dry and southern Mexico is relatively wet. In the north the annual rainfall

averages about 30 to 60 cm, whereas in the southern state of Tabasco the annual rainfall is

200 cm per year. The other southern states have comparably high rainfall levels. Mexico City

is near the dividing line between the dry climates of the north and the wet climates of the

south. It has average rainfall in the range of 60 to 100 cm per year.


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Almost all of Mexico has pronounced dry and wet seasons. The dry season starts around the

end of October and runs to the end of May. July is generally the wettest month and February

the driest. Mexico is often in the path of hurricanes having their origin in the western

Caribbean Sea.

The average temperatures are determined largely by altitudes. In the altoplano the altitudes

are about 1000 to 2000 meters and average temperatures range from 16 C (60 F) to 20 C

(68 F). Mexico City, at an altitude of 2300 meters has an average temperature of about 16 C

(60 F).

Source: -http://www.sjsu.edu/faculty/watkins/mexhist01.htm The economy ofMexicois the 13th largest in the world in nominal terms and the 11th by

purchasing power parity, according to the World Bank. Since the 1994 crisis, administrations

have improved the country's macroeconomic fundamentals. Mexico was not significantly

influenced by the recent 2002 South American crisis, and maintained positive, although low,

rates of growth after a brief period of stagnation in 2001. However, Mexico was one of the

Latin American nations most affected by the 2008 recession with its Gross Domestic Productcontracting by more than 6%. Moody's (in March 2000) and Fitch IBCA (in January 2002)

issued investment-grade ratings for Mexico's sovereign debt. In spite of its unprecedented

macroeconomic stability, which has reduced inflation and interest rates to record lows and

has increased per capita income, enormous gaps remain between the urban and the rural

population, the northern and southern states, and the rich and the poor.[10]Some of the

government's challenges include the upgrade of infrastructure, the modernization of the tax

system and labor laws, and the reduction of income inequality.
http://www.sjsu.edu/faculty/watkins/mexhist01.htmhttp://www.sjsu.edu/faculty/watkins/mexhist01.htmhttp://www.sjsu.edu/faculty/watkins/mexhist01.htmhttp://en.wikipedia.org/wiki/Mexicohttp://en.wikipedia.org/wiki/Mexicohttp://en.wikipedia.org/wiki/1994_economic_crisis_in_Mexicohttp://en.wikipedia.org/wiki/Macroeconomicshttp://en.wikipedia.org/wiki/South_American_economic_crisis_of_2002http://en.wikipedia.org/wiki/Late-2000s_recessionhttp://en.wikipedia.org/wiki/Moody%27shttp://en.wikipedia.org/wiki/Fitch_IBCAhttp://en.wikipedia.org/wiki/Economy_of_Mexico#cite_note-WB-9http://en.wikipedia.org/wiki/Economy_of_Mexico#cite_note-WB-9http://en.wikipedia.org/wiki/Economy_of_Mexico#cite_note-WB-9http://en.wikipedia.org/wiki/Economy_of_Mexico#cite_note-WB-9http://en.wikipedia.org/wiki/Fitch_IBCAhttp://en.wikipedia.org/wiki/Moody%27shttp://en.wikipedia.org/wiki/Late-2000s_recessionhttp://en.wikipedia.org/wiki/South_American_economic_crisis_of_2002http://en.wikipedia.org/wiki/Macroeconomicshttp://en.wikipedia.org/wiki/1994_economic_crisis_in_Mexicohttp://en.wikipedia.org/wiki/Mexicohttp://www.sjsu.edu/faculty/watkins/mexhist01.htm


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3. Macroeconomic, financial and welfare indicatorsGDP per capita PPP US $15,782.897 (2012)

GNI per capita PPP US $14,400 (2011)

Inflation (CPI) 3.85% (May 2012)

Gini index 51.7 (CIA 2008)

Unemployment 5.5% (April 2010)

HDI 0.770 (2011)

Labor force 78.38 million (2011)

Pop. in poverty 13.8%

Main indicators

Mexico's Gross Domestic Product (GDP) in purchasing power parity (PPP) was estimated at

US $1,748.908 billion in 2012, and $1,231.642 billion in nominal exchange rates. As such, its

standard of living, as measured in GDP in PPP per capita was US $15,782.897. The World

Bank reported in 2009 that the country's Gross National Income in market exchange rates

was the second highest in Latin America, after Brazil at US $1,830.392 billion, which lead to

the highest income per capita in the region at $14,400. As such, Mexico is now firmly

established as an upper middle-income country. After the slowdown of 2001 the country has

recovered and has grown 4.2, 3.0 and 4.8 percent in 2004, 2005 and 2006, even though it is

considered to be well below Mexico's potential growth.
http://en.wikipedia.org/wiki/Purchasing_power_parityhttp://en.wikipedia.org/wiki/Purchasing_power_parityhttp://en.wikipedia.org/wiki/Consumer_price_indexhttp://en.wikipedia.org/wiki/Gini_indexhttp://en.wikipedia.org/wiki/Human_Development_Indexhttp://en.wikipedia.org/wiki/Human_Development_Indexhttp://en.wikipedia.org/wiki/Purchasing_power_parityhttp://en.wikipedia.org/wiki/1000000000_(number)http://en.wikipedia.org/wiki/1000000000_(number)http://en.wikipedia.org/wiki/Gross_National_Incomehttp://en.wikipedia.org/wiki/Brazilhttp://en.wikipedia.org/wiki/Gross_National_Incomehttp://en.wikipedia.org/wiki/Gross_National_Incomehttp://en.wikipedia.org/wiki/Brazilhttp://en.wikipedia.org/wiki/Gross_National_Incomehttp://en.wikipedia.org/wiki/1000000000_(number)http://en.wikipedia.org/wiki/1000000000_(number)http://en.wikipedia.org/wiki/Purchasing_power_parityhttp://en.wikipedia.org/wiki/Human_Development_Indexhttp://en.wikipedia.org/wiki/Gini_indexhttp://en.wikipedia.org/wiki/Consumer_price_indexhttp://en.wikipedia.org/wiki/Purchasing_power_parityhttp://en.wikipedia.org/wiki/Purchasing_power_parity


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In terms of share in GDP per sector (in 2004), the largest contributors in agriculture are

Jalisco (9.7%), Sinaloa (7.7%) and Veracruz (7.6%); the greatest contributors in industrial

production are the Federal District (15.8%), State of Mxico (11.8%) and Nuevo Len

(7.9%); the greatest contributors in the service sector are also the Federal District (25.3%),

State of Mxico (8.9%) and Nuevo Len (7.5%).

GDP of Last Five Years GDP of Production constant (2000) $

o 2007 3.26o 2008 1.19o 2009 (-6.24)o 2010 5.52o 2011 3.94

o 2007 627.0725 Billiono 2008 635.0756 Billiono 2009 595.4289 Billiono 2010 628.3347 Billiono 2011 655.0466 Billion

Following a deep recession associated with a strong global downturn, Mexico is experiencing

a robust recovery, with GDP growth of 5 per cent in 2010 and 4 per cent in 2011. Exportgrowth is expected to slow after the exceptional rebound of 2010, but stronger domestic

demand should keep the recovery on track. Several labor market indicators have improved,

although unemployment is decreasing only slowly. Mexico has already started to withdraw

the fiscal stimulus of 2009 and increased taxes to calm market worries about fiscal trends. If

the recovery unfolds as expected, the government should fully implement its plans to lower

the budget deficit further through spending restraint. Since inflation has come down,

monetary policy can support the recovery by keeping rates low in the near term.
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Mexico GDP

The Gross Domestic Product (GDP) in Mexico was worth 1155.32 billion US dollars in 2011,according to a report published by the World Bank. The GDP value of Mexico is roughlyequivalent to 1.86 percent of the world economy. Historically, from 1960 until 2011, Mexico

GDP averaged 322.51 Billion USD reaching an all time high of 1155.32 Billion USD inDecember of 2011 and a record low of 13.06 Billion USD in December of 1960. The grossdomestic product (GDP) measures of national income and output for a given country's economy.The gross domestic product (GDP) is equal to the total expenditures for all final goods andservices produced within the country in a stipulated period of time. This page includes a chartwith historical data for Mexico GDP.

Mexico GDP Annual Growth Rate

The Gross Domestic Product (GDP) in Mexico expanded 4.10 percent in the second quarter of2012 over the same quarter of the previous year. Historically, from 2004 until 2012, Mexico GDPAnnual Growth Rate averaged 2.66 Percent reaching an all time high of 7.60 Percent in June of2010 and a record low of -9.60 Percent in June of 2009. The annual growth rate in GrossDomestic Product measures the increase in value of the goods and services produced by aneconomy over the period of a year. Therefore, unlike the commonly used quarterly GDP growthrate the annual GDP growth rate takes into account a full year of economic activity, thus avoidingthe need to make any type of seasonal adjustment. This page includes a chart with historical datafor Mexico GDP Annual Growth Rate.


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Mexico Producer Prices

Producer Prices in Mexico increased to 100.25 Index Points in August of 2012 from 99.87 IndexPoints in July of 2012, according to a report released by the Institute National de Statistical yGeographic, Mexico. Historically, from 2003 until 2012, Mexico Producer Prices averaged 81.37

Index Points reaching an all time high of 100.25 Index Points in August of 2012 and a record lowof 62.78 Index Points in December of 2003. In Mexico, the Producer Price Index measures theaverage change in price of goods and services sold by manufacturers and producers in thewholesale market during a given period. This page includes a chart with historical data for MexicoProducer Prices.

Mexico Import Prices

Import Prices in Mexico increased to 227.44 Index Points in July of 2012 from 227.30 IndexPoints in June of 2012, according to a report released by the Banco De Mexico. Historically, from1970 until 2012, Mexico Import Prices averaged 130.24 Index Points reaching an all time high of228.55 Index Points in April of 2012 and a record low of 42.20 Index Points in January of 1970.In Mexico, Import Prices correspond to the rate of change in the prices of goods and servicespurchased by residents of that country from, and supplied by, foreign sellers. Import Prices areheavily affected by exchange rates. This page includes a chart with historical data for MexicoImport Prices.


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5 GDP Compositions by Sector of Mexico Last Five Years

o GDP - composition by sector: (2007est.)o Agriculture: 3.6%o Industry: 34.9%o Services: 61.4%






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4. Major Sectors Growing In Mexicoo ConstructionYou name it and it will be built in Mexico in the coming years. Mega-

infrastructure projects (electric plants, hydroelectric dams, highways, airports, marinas

and ports, petroleum extraction), commercial, industrial and office construction and

residential projects can be found in abundance throughout the country.

o TourismBig push to develop tourism from the Federal, State and local governments.Tourism is a priority item on government agendas including: high-end hotels and resorts,

sports and eco-tourism, business and professional events. Mexico has perfect weather,

incredible rich history, open and accessible culture, thousands of miles of beaches, deserts

and jungle, and easy access to the USA and Canada.

o Medical and PharmaceuticalAnother government priority. Emphasis on preventativemedicine and improving the quality of life provides rich areas of opportunity. The

demographics in Mexico show that the market is growing and will continue to do so.

o Security This industry will remain strong and show exceptional growth in the future.There is strong demand by private industry, government, telecommunications and

computer-related activities, the financial industry, international commerce, and the

transportation industry to name but a few


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5. The Level of FDI & FII of MexicoLast Five Years

o Foreign Direct Investment, Net Inflow(BPO, Current US $ )

o Foreign Direct Investment, NetInflow ( % Of GDP )

200731,313,381,826 2007 3.0 200826,888,517,874 2008 2.5 200915,958,986,181 2009 1.8 201020,207,632,419 2010 2.0 201119,439,812,932 2011 1.7

o Profit Remittances On FDI ( current US$ ) 2007 11,608,858,923 2008 10,090,731,891 2009 7,890,839,299 2010 6,576,033,774

o Foreign Direct Investment, Net(BPO, Current US$ ) 2007 23,236,002,580 2008 25,983,327,413 2009 9,100,348,076 2010 7,138,584,781 2011 10,608,370,257


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6. World Image of MexicoThe economy ofMexico is the 13th largest in the world in nominal terms and the 11th bypurchasing power parity, according to the World Bank. Since the 1994 crisis, administrations

have improved the country's macroeconomic fundamentals. Mexico was not significantly

influenced by the recent 2002 South American crisis, and maintained positive, although low,

rates of growth after a brief period of stagnation in 2001. However, Mexico was one of the

Latin American nations most affected by the 2008 recession with its Gross Domestic Product

contracting by more than 6%. Moody's (in March 2000) and Fitch IBCA (in January 2002)

issued investment-grade ratings for Mexico's sovereign debt. In spite of its unprecedented

macroeconomic stability, which has reduced inflation and interest rates to record lows and

has increased per capita income, enormous gaps remain between the urban and the rural

population, the northern and southern states, and the rich and the poor. Some of the

government's challenges include the upgrade of infrastructure, the modernization of the tax

system and labor laws, and the reduction of income inequality.

The economy contains rapidly developing modern industrial and service sectors, with

increasing private ownership. Recent administrations have expanded competition in ports,

railroads, telecommunications, electricity generation, natural gas distribution and airports,

with the aim of upgrading infrastructure. As an export-oriented economy, more than 90% of

Mexican trade is under free trade agreements (FTAs) with more than 40 countries, including

the European Union, Japan, Israel, and much ofCentral and South America. The most

influential FTA is the North American Free Trade Agreement (NAFTA), which came into

effect in 1994, and was signed in 1992 by the governments of the United States, Canada and

Mexico. In 2006, trade with Mexico's two northern partners accounted for almost 90% of itsexports and 55% of its imports. Recently, the Congress of the Union approved important tax,

pension and judicial reforms, and reform to the oil industry is currently being debated.

According to the Forbes Global 2000 list of the world's largest companies in 2008, Mexico

had 16 companies in the list.

Mexico's labor force is 78 million. The OECD and WTO both rank Mexican workers among

the hardest working in the world, in terms of the amount of hours worked yearly

Macroeconomic, financial and welfare indicators
http://en.wikipedia.org/wiki/Mexicohttp://en.wikipedia.org/wiki/1994_economic_crisis_in_Mexicohttp://en.wikipedia.org/wiki/Macroeconomicshttp://en.wikipedia.org/wiki/South_American_economic_crisis_of_2002http://en.wikipedia.org/wiki/Late-2000s_recessionhttp://en.wikipedia.org/wiki/Moody%27shttp://en.wikipedia.org/wiki/Fitch_IBCAhttp://en.wikipedia.org/wiki/Electricity_sector_in_Mexicohttp://en.wikipedia.org/wiki/Export-oriented_economyhttp://en.wikipedia.org/wiki/Free_trade_agreementhttp://en.wikipedia.org/wiki/Central_Americahttp://en.wikipedia.org/wiki/North_American_Free_Trade_Agreementhttp://en.wikipedia.org/wiki/Congress_of_the_Unionhttp://en.wikipedia.org/wiki/Congress_of_the_Unionhttp://en.wikipedia.org/wiki/North_American_Free_Trade_Agreementhttp://en.wikipedia.org/wiki/Central_Americahttp://en.wikipedia.org/wiki/Free_trade_agreementhttp://en.wikipedia.org/wiki/Export-oriented_economyhttp://en.wikipedia.org/wiki/Electricity_sector_in_Mexicohttp://en.wikipedia.org/wiki/Fitch_IBCAhttp://en.wikipedia.org/wiki/Moody%27shttp://en.wikipedia.org/wiki/Late-2000s_recessionhttp://en.wikipedia.org/wiki/South_American_economic_crisis_of_2002http://en.wikipedia.org/wiki/Macroeconomicshttp://en.wikipedia.org/wiki/1994_economic_crisis_in_Mexicohttp://en.wikipedia.org/wiki/Mexico


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Mexico's Gross Domestic Product (GDP) in purchasing power parity (PPP) was estimated at

US $1,748.908 billion in 2012, and $1,231.642 billion in nominal exchange rates. As such, its

standard of living, as measured in GDP in PPP per capita was US $15,782.897. The World

Bank reported in 2009 that the country's Gross National Income in market exchange rates

was the second highest in Latin America, after Brazil at US $1,830.392 billion, which lead to

the highest income per capita in the region at $14,400. As such, Mexico is now firmly

established as an upper middle-income country. After the slowdown of 2001 the country has

recovered and has grown 4.2, 3.0 and 4.8 percent in 2004, 2005 and 2006, even though it is

considered to be well below Mexico's potential growth.

The Mexican currency is the peso (ISO 4217: MXN; symbol: $). One peso is divided into

100 centavos (cents). MXN replaced MXP in 1993 at a rate of 1000 MXP per 1 MXN. The

exchanged rate has remained stable since 1998, oscillating between 10.20 and 11=3.50 MXN

per US$. Interest rates in 2007 were situated at around 7 percent, having reached a historic

low in 2002 below 5 percent. Inflation rates are also at historic lows; the inflation rate in

Mexico in 2006 was 4.1 percent, and 3 percent by the end of 2007. Unemployment rates are

the lowest of all OECD member countries at 3.2 percent. However, underemployment is

estimated at 25 percent. Mexico's Human development index was reported at

0.829, (comprising a life expectancy index of 0.84, an education index of 0.86 and a GDP

index of 0.77), ranking 52 in the world within the group of high-development.
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7. Free Trade AgreementsMexico joined the General Agreement on Tariffs and Trade (GATT) in 1986, and today is an

active and constructive participant of the World Trade Organization. Fox's administration

promoted the establishment of a Free Trade Area of the Americas; Puebla served as

temporary headquarters for the negotiations, and several other cities are now candidates for

its permanent headquarters if the agreement is reached and implemented.

Mexico has signed 12 free trade agreements with 44 countries:

the North American Free Trade Agreement (NAFTA) (1994) with the United Statesand Canada;

Group of the three [countries], or G-3 (1995) with Colombia and Venezuela; thelatter decided to terminate the agreement in 2006; Mexico announced its intention to

invite Ecuador, Peru or Panama as a replacement;

Free Trade Agreement with Costa Rica (1995); Free Trade Agreement with Bolivia (1995); Free Trade Agreement with Nicaragua (1998);
http://en.wikipedia.org/wiki/General_Agreement_on_Tariffs_and_Tradehttp://en.wikipedia.org/wiki/World_Trade_Organizationhttp://en.wikipedia.org/wiki/Free_Trade_Area_of_the_Americashttp://en.wikipedia.org/wiki/Puebla,_Pueblahttp://en.wikipedia.org/wiki/Free_trade_agreementhttp://en.wikipedia.org/wiki/North_American_Free_Trade_Agreementhttp://en.wikipedia.org/wiki/Colombiahttp://en.wikipedia.org/wiki/Venezuelahttp://en.wikipedia.org/wiki/Ecuadorhttp://en.wikipedia.org/wiki/Panamahttp://en.wikipedia.org/wiki/Costa_Ricahttp://en.wikipedia.org/wiki/Boliviahttp://en.wikipedia.org/wiki/Nicaraguahttp://en.wikipedia.org/wiki/File:Mexico_FTA.pnghttp://en.wikipedia.org/wiki/Nicaraguahttp://en.wikipedia.org/wiki/Boliviahttp://en.wikipedia.org/wiki/Costa_Ricahttp://en.wikipedia.org/wiki/Panamahttp://en.wikipedia.org/wiki/Ecuadorhttp://en.wikipedia.org/wiki/Venezuelahttp://en.wikipedia.org/wiki/Colombiahttp://en.wikipedia.org/wiki/North_American_Free_Trade_Agreementhttp://en.wikipedia.org/wiki/Free_trade_agreementhttp://en.wikipedia.org/wiki/Puebla,_Pueblahttp://en.wikipedia.org/wiki/Free_Trade_Area_of_the_Americashttp://en.wikipedia.org/wiki/World_Trade_Organizationhttp://en.wikipedia.org/wiki/General_Agreement_on_Tariffs_and_Trade


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Countries with which Mexico has signed a FTA

Free Trade Agreement with Chile (1999); Free Trade Agreement with the European Union (2000); Free Trade Agreement with Israel (2000); TN Free Trade Agreement (2001), with Guatemala, El Salvador and Honduras; Free Trade Agreement with the European Free Trade Association (EFTA), integrated

by Iceland, Norway, Liechtenstein and Switzerland (2001);

Free Trade Agreement with Uruguay (2004); and Free Trade Agreement with Japan (2005)

Mexico has shown interest in becoming an associate member ofMercosur.[170]The Mexican

government has also started negotiations with South Korea, Singapore and Peru, and also

wishes to start negotiations with Australia for a trade agreement between the two countries.

NAFTA (North American Free Trade Agreement)

NAFTA emblem

The North American Trade Agreement (NAFTA) is by far the most important Trade

Agreement Mexico has signed both in the magnitude of reciprocal trade with its partners as

well as in its scope. Unlike the rest of the Free Trade Agreements that Mexico has signed,

NAFTA is more comprehensive in its scope and was complemented by the North American

Agreement for Environmental Cooperation (NAAEC) and the North American Agreement on

Labor Cooperation (NAALC).
http://en.wikipedia.org/wiki/Chilehttp://en.wikipedia.org/wiki/European_Unionhttp://en.wikipedia.org/wiki/Israelhttp://en.wikipedia.org/wiki/Guatemalahttp://en.wikipedia.org/wiki/Hondurashttp://en.wikipedia.org/wiki/European_Free_Trade_Associationhttp://en.wikipedia.org/wiki/Icelandhttp://en.wikipedia.org/wiki/Liechtensteinhttp://en.wikipedia.org/wiki/Switzerlandhttp://en.wikipedia.org/wiki/Uruguayhttp://en.wikipedia.org/wiki/Mercosurhttp://en.wikipedia.org/wiki/Economy_of_Mexico#cite_note-169http://en.wikipedia.org/wiki/Economy_of_Mexico#cite_note-169http://en.wikipedia.org/wiki/Economy_of_Mexico#cite_note-169http://en.wikipedia.org/wiki/North_American_Free_Trade_Agreementhttp://en.wikipedia.org/wiki/North_American_Free_Trade_Agreementhttp://en.wikipedia.org/wiki/North_American_Free_Trade_Agreementhttp://en.wikipedia.org/wiki/File:NAFTA_logo.pnghttp://en.wikipedia.org/wiki/North_American_Free_Trade_Agreementhttp://en.wikipedia.org/wiki/Economy_of_Mexico#cite_note-169http://en.wikipedia.org/wiki/Mercosurhttp://en.wikipedia.org/wiki/Uruguayhttp://en.wikipedia.org/wiki/Switzerlandhttp://en.wikipedia.org/wiki/Liechtensteinhttp://en.wikipedia.org/wiki/Icelandhttp://en.wikipedia.org/wiki/European_Free_Trade_Associationhttp://en.wikipedia.org/wiki/Hondurashttp://en.wikipedia.org/wiki/Guatemalahttp://en.wikipedia.org/wiki/Israelhttp://en.wikipedia.org/wiki/European_Unionhttp://en.wikipedia.org/wiki/Chile


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The NAAEC agreement was a response to environmentalists' concerns that companies would

relocate to Mexico or the United States would lower its standards if the three countries did

not achieve a unanimous regulation on the environment. The NAAEC, in an aim to be more

than a set of environmental regulations, established the North American Commission for

Environmental Cooperation (NACEC), a mechanism for addressing trade and environmental

issues, the North American Development Bank (NADBank) for assisting and financing

investments in pollution reduction and the Border Environmental Cooperation Commission

(BECC). The NADBank and the BECC have provided economic benefits to Mexico by

financing 36 projects, mostly in the water sector. By complementing NAFTA with the

NAAEC, it has been labeled the "greenest" trade agreement.

Mexican trade facilitation and competitiveness

A research brief published by the World Bankas part of its Trade Costs and Facilitation

Project suggests that Mexico has the potential to substantially increase trade flows and

economic growth through trade facilitation reform. The study examines the potential impacts

of trade facilitation reforms in four areas: port efficiency, customs administration,

information technology, and regulatory environment (including standards).

The study projects overall increments from domestic reforms to be on the order of

$31.8 billion, equivalent to 22.4 percent of total Mexican manufacturing exports for 200003.

On the imports side, the corresponding figures are $17.1 billion and 11.2 percent,

respectively. Increases in exports, including textiles, would result primarily from

improvements in port efficiency and the regulatory environment. Exports of transport

equipment would be expected to increase by the greatest increment from improvements in

port efficiency, whereas exports of food and machinery would largely be the result of

improvements in the regulatory environment. On the imports side, Mexican improvements in

port efficiency would appear to be the most important factor, although for imports of

transport equipment, improvements in service sector infrastructure would also be of relative

importance.
http://en.wikipedia.org/wiki/World_Bankhttp://econ.worldbank.org/external/default/main?menuPK=1697684&pagePK=64168176&piPK=64168140&theSitePK=1697658http://econ.worldbank.org/external/default/main?menuPK=1697684&pagePK=64168176&piPK=64168140&theSitePK=1697658http://en.wikipedia.org/wiki/Trade_facilitationhttp://en.wikipedia.org/wiki/Trade_facilitationhttp://econ.worldbank.org/external/default/main?menuPK=1697684&pagePK=64168176&piPK=64168140&theSitePK=1697658http://econ.worldbank.org/external/default/main?menuPK=1697684&pagePK=64168176&piPK=64168140&theSitePK=1697658http://en.wikipedia.org/wiki/World_Bank


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BIBLIOGRAPHY

Web sites:-

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_sector_composition

http://en.wikipedia.org/wiki/Industry

http://www.tradingeconomics.com/mexico/indicators

http://www.tradingeconomics.com/mexico/gdp

http://www.hforcare.com/

http://www.sjsu.edu/faculty/watkins/mexhist01.htm
http://en.wikipedia.org/wiki/List_of_countries_by_GDP_sector_compositionhttp://en.wikipedia.org/wiki/List_of_countries_by_GDP_sector_compositionhttp://en.wikipedia.org/wiki/Industryhttp://en.wikipedia.org/wiki/Industryhttp://www.tradingeconomics.com/mexico/indicatorshttp://www.tradingeconomics.com/mexico/indicatorshttp://www.tradingeconomics.com/mexico/gdphttp://www.tradingeconomics.com/mexico/gdphttp://www.hforcare.com/http://www.hforcare.com/http://www.sjsu.edu/faculty/watkins/mexhist01.htmhttp://www.sjsu.edu/faculty/watkins/mexhist01.htmhttp://www.sjsu.edu/faculty/watkins/mexhist01.htmhttp://www.hforcare.com/http://www.tradingeconomics.com/mexico/gdphttp://www.tradingeconomics.com/mexico/indicatorshttp://en.wikipedia.org/wiki/Industryhttp://en.wikipedia.org/wiki/List_of_countries_by_GDP_sector_composition

Documents

Economics Analysis on Mexico