Global Economic Integration of Mexico

Global Economic Integration of Mexico

Due to its massive economy, Mexico is a member of many economic integrations such as common market, free trade agreement among others with an aim of widening its markets. Brazil is best beneficiary of North America Free Trade Agreement (NAFTA) that became operational in 1990. The country saw this as an opportunity to make its economy an export-based economy. The agreement favored this move as most tariffs and duties were excluded from the established trade partners. Between 1994 and 2001, Mexico had signed at least ten agreements with different countries. Three of these include bilateral agreements with countries such as Bolivia, Costa Rica and Nicaragua. These three agreements are a demonstration of Mexico’s engagement into global economic integration and the benefits gained from these agreements.

The aim of the countries that signed these agreements with Mexico was to promote economic integration and cultivate trade and industry well-being in these countries (Harold, 22). The Mexican presidents who initiated these agreements had laid out objectives to the advantage of their country’s economy. These objectives include abolition of trade barriers, endorsement of free competition, protection and enforcement of intellectual property rights, facilitation of the flows of goods and services and extension and diversification of trade (Shaiken, 245). The three countries’ bilateral agreements are a good demonstration of the successful achievement of these objectives to the benefit of the Mexican economy that has now become an export-based economy. These agreements have led to elimination of most tariffs and duties between the participating countries and this has been a beginning of trade liberalization.

Other than the NAFTA, Brazil is also a member of the South Common Market integration alongside Uruguay,Argentina,Bolivia.Brazil benefits a lot from this integration since the tariffs and non tariff barriers are abolished making the market to be free and open among the member countries.. For instance, the Mexico-Bolivia Free Trade Agreement that has been effective since January 1995 has led to of duty on industrial products to up to ninety seven percent (Edward, 51). This is on the industrial products that are exported from Mexico to Bolivia which include vehicles and automobile parts, various electronics and oil products among others. Some agricultural products are exported from Mexico to Bolivia duty-free. These include vegetables, fruits and animal products among others. Seventy percent of Mexican exports were set duty free by their agreement with Costa Rica. This also came with reduction of duties of the other twenty percent in five years and ten years for the remaining ten percent. The bilateral agreement with Nicaragua led to immediate elimination of approximately 80% of all tariffs among others. All these agreements have seen to significant growth of the Mexican economy and expansion of its export market.

The signing of these three and other Free Trade Agreements by Mexico has made the country the greatest signer of agreements in the whole world. This has been of great advantage to the Mexico both economically and politically. Economically, the country has acquired free or easy access of foreign markets that is of benefits to their economic growth (Tim and Eliza, 4). This has also attracted foreign investors in to the country. Signing of several agreements has made Mexico an expert of acquiring and negotiating attractive terms for the benefit of its economy. Signing of these free trade agreements cushions Mexico from the trade barriers that some countries establish during difficult economic times (Wilkie and Olga, 270). This has also made the country a good candidate of entering into such agreements with for many countries in the world. In addition to experience, the country’s close ties with Brazil and US puts it in a better position to acquire the broker’s position in NAFTA negotiations. This may lead to establishment of NAFTA secretariat in the country that will be an added advantage.

Although the numerous FTAs may become a challenge to Mexico in future, these agreements have played a great role in the growth of the country’s economy. Some of the challenges will include legal matters and the efforts to integrate and manage all the bilateral agreements. However, these will not be a barrier to the country’s achievements. These achievements include expansion of their foreign markets, attraction of foreign investors and a possibility of becoming the brokers in NAFTA negotiations.

 

Works Cited

Edward, Baldwin. The North American Free Trade Agreement: A Social Charter and Economic Growth, in Belous and Lemco.” NAFTA as a Model of Development: The Benefits and Costs of Merging High and Low Wage Areas, (1995): 48-52

Harold, Hunt. “Mexico fights for position in global race.” Tierra Grande,1682 (2001): 20-24

Shaiken, Hunter. “The New Global Economy: Trade and Production under NAFTA.” Journal Fur Entwicklungspolitik, 3.4 (2001): 241-254.

Tim, Wise and Eliza Waters. Community Control In A Global Economy:Lessons From Mexico’s Economic Integration Process. Medford MA: Tufts University press, 2001. 2-5

Wilkie, James and Olga Lazin. Mexico, NAFTA, and Free Trade in the Americas. New York: Macmillan, 2004.267-284

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