Industry: Economy, Export
Title: Trade between Canada and Mexico has more than increased fivefold
- Trade between Canada and Mexico has more than increased fivefold since the ratification of NAFTA 20 years ago.
- Now, everything is in place for a second wave of business opportunities between Canada and Mexico.
- This surge in trade has created extraordinary opportunities for Canadian companies operating in the “ideal zones” of Mexico, where the opportunities for global trade have been cut by the new legislation.
- A study reveals that Canadian companies can make inroads in many sectors of Mexico where the reality on the ground is consistent with the great ambitions of NAFTA, as well as Canada’s more advanced expertise in international affairs.
- Canadian companies that are ready to engage in unknown waters in the coming months may find more interesting opportunities in Mexico in the coming years.
- The proposed free trade area encompasses 11 countries, including Canada and Mexico. Essentially, this means that NAFTA will be replaced by a kind of super-NAFTA representing about 40% of global GDP 5.
- Today, Mexico is much closer to Canada in terms of the business environment than it has ever been.
- The economy of Mexico is expected to surpass France and the United Kingdom by 2030 (in terms of PPP, or purchasing power parity), according to PwC1. Moreover, according to the World Bank, Mexico’s GDP already exceeds that of Canada in terms of PPPs, making it the 11th largest economy in the world.
- 20 years after NAFTA was adopted, a comprehensive system of standards for security, technology and comparable measures was introduced across the continent.
- NAFTA also allowed Canada to export its services to Mexico in the areas of finance, energy, and information and communication technology.
- Manufacturing of vehicles from Mexico climbed to 19 percent; the reason is because manufacturers have been attracted by Mexico’s advantageous international trading conditions for automobiles.
- Vehicles made in Mexico can be exported without customs duties anywhere in Latin America, the United States, Europe and Japan.
- The arrival of foreign manufacturers in Mexico, coupled with generous incentives and accelerated approval processes, created an “ideal zone” for Canadian auto parts manufacturers.
Source: HSBC Business