An increasing trade balance is evidence of the country’s numerous Free Trade Agreements

n exico entered the global economy with its signing of the North American Free Trade Agreement (NAFTA) in 1994. Since then, Mexican trade with Canada and the United States, the other two signatories, has tripled, raising the country’s balance of trade from $80 billion in 1993 to $240 billion in 2002.Today, exports represent more than half of Mexico’s GDP, and over 80% of Mexican exports are destined for the U.S., which in turn supplies 74% of Mexico’s imports. Co-chair of the Mexico-U.S. Business Committee James Jones comments, “One of the best things about NAFTA has been the change in attitude that has occurred. Americans understand Mexicans better now and vice versa, and this has led to a better understanding between the two countries. From the business point of view, NAFTA has been a huge success, objectives were fulfilled, jobs were created and trade increased. Whatever the measurements are, it’s been a very successful ten-year period.”

Another principal factor assuring the continuity of ties between the United States and Mexico is the large number of Mexican nationals residing within U.S. borders, which is currently estimated at some 25 million people. Although many are still undocumented, the U.S. and Mexico have been working together on immigration reforms. Mexicans living in the U.S. have been a significant boost to the Mexican economy through repatriated funds that are sent back home to their families. Mr. Albert C. Zapanta, President and CEO of the U.S.-Mexican Chamber of Commerce, states, “At the end of the day, Mexico is our neighbor, and here in the U.S. we have a huge Hispanic population of over 40 million people. Their presence is strong and will continue to grow, and so will our economic relationship with Mexico.”

U.S.-Mexican mutual understanding has increased with NAFTA

On the eve of the tenth birthday of NAFTA, many feel it is time to reassess the agreement’s goals and to consider further regional integration. Mr. Héctor Rangel Domene, president of the Business Coordinating Council of Mexico, says, “I believe that NAFTA has greatly benefited all three parties and growth on investment has been enormous. However, we now need an agenda for the future that includes migration, energy, goods and individual border crossing, and security. If we can harmonize standards and financial systems, eventually we can use a common currency. We need to move beyond trade now and integrate North America so that it becomes a more efficient region and a more competitive force when facing the new blocks such as Europe and China.”

Success with NAFTA encouraged Mexico to seek further free-trade deals across the globe, and the country has subsequently signed accords with 32 nations – including a 2003 agreement with Japan and a 2001 agreement with the European Union. Mexico is an active member of the Asia Pacific Economic Cooperation. As a result, the country has become an important center of operations for companies who wish to trade with Latin America, Europe, and Asia. Finally, the Free-Trade Area of the Americas, to be signed by 2005, will assure Mexico a leading role in what will be the largest free-trade bloc in the world, stretching from Alaska in the north to Cape Horn in the south.