Pierre Rivery A00898810

Thibault Chalvon Demersay A00898812

Doing business in Mexico

After reading the article Mexico’s Position as a world class trader answer the following ideas:

1°)Explain why Mexico has made a dramatic transition:

Mexico has known significant change in its economy which was definitely closed to
international trade , nowadays it has become one of the most opened economies in the
America Latina . As these changes happened in a really short time Mexico has now to deals
with the instability of financial market whereas this country was not used to that , that’s the
reason why the transition was dramatic.

2°)Mention 3 aspects in which Mexico has integrated to the world:

-A free trade agreement ( Mercosur )

-An export production

-Mexico has got the 8th position for merchandise trade.

3°)Explain what the GATT is, when and why Mexico has joined it:

The General Agreement on Tariffs and Trade is an international agreement which has for
main objective the reduction of barriers to international trade. This was achieved through the
reduction of tariff barriers, quantitative restrictions and subsidies on trade through a series of
agreements. Mexico joined this agreement in 1986 in order to open and liberalize its
economy to the international trade.

4°)After analyzing the 2 attached spread sheets impmx_ae.html and expmx_ae.html,

make a list starting with the most profitable free trade agreement PER COUNTRY for
Mexico. Use the network of trade agreements for reference of agreements

1994 : North America Free Trade Agreement

2000 : Free Trade Agreement with the EU

2002: Preferential Trade Agreement within Latin America Integration Association. (LAIA)

2005: Agreement for strengthening of the economic partnership

5°)What is the percentage of Mexico’s exports that are duty free?

The percentage of Mexican exportation that are duty free rises to 94%.

6°)What is the MERCOSUR and what is Mexico’s position about it?

The MERCOSUR is a free trade agreement which include Argentina, Brazil, Paraguay and
finally Uruguay founded in 1991.The utility of this agreement is to promote free trade and the
fluid movement of goods, people, and currency.

Mexico is not in the MERCOSUR yet but it has a statute of observer.

7°)What is the FTAA and which are the countries involved?

The Free Trade Area of the Americas was a proposed agreement to eliminate or
reduce the trade barriers among all countries in the Americas. It should gather 34
countries, the proposed agreement was an extension of the North American Free
Trade Agreement (NAFTA) between Canada, Mexico and the United States.

The countries involved in are : Argentina , Mexico , Bahamas, Bolivia, Brazil,

Canada, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, USA,
Grenade, Guatemala, Haiti, Honduras, Jamaica, Nicaragua, Panama, Paraguay,
Peru, Dominica, Saint Lucie, Saint Vincent et les grenadines, Surinam, Trinity and
Tobago, Uruguay, Venezuela.

8°)Find and comment about the latest news (Tuesday, August 18th 2009) about
conversations between Mexican President Calderón Hinojosa and Brazilian President
Luiz Inácio Lula da Silva about FTA (TLC Brasil-México).

“The presidents of Brazil and Mexico say they support a free trade agreement between Latin
America's two largest economies.
Brazil's Luiz Inacio Lula da Silva and Mexico's Felipe Calderon say they will ask their
economic teams to start studying a possible trade deal. No timetable was specified.
Silva and Calderon said after a meeting Monday that their nations need to increase trade,
which is at a very low level considering the sizes of Brazil and Mexico.
Mexico, which exports mainly to the United States, says trade with Brazil reached $8 billion
last year, up from $2.5 billion in 2000.”
(http://www.businessweek.com/ap/financialnews/D9A4SBSO1.htm)
It is good that Mexico joins with the Brazil with a free trade agreement, because that is going
to facilitate the opportunities of commerce, market and economic growth.

9°) Mention 3 aspects to which trade liberalization has contributed:

-Develop a economic growth in a long term orientation

-Develop commercial and market opportunities
-Be more competitive in the global trade