Mexico has added yet another free trade agreement to its expanding collection, according to the Wall Street Journal, putting it in an excellent position for continuing to cultivate its community of foreign companies that have begun expanding to Mexico.
Free trade agreements allow companies to trade their goods with limited to no tariffs. Mexico has a free trade agreement with the U.S. and Canada called the North American Free Trade Agreement. However, Mexico has also been building alliances with many parts of Latin America, including Panama. In fact, it has free trade agreements with 45 countries around the world, including Japan and Europe.
The document that seals the pact between Panama and Mexico was signed on March 24 by Mexican Economy Minister Ildefonso Guajardo and Panamanian Trade and Industry Minister Ricardo Quijano.
Mexican President Enrique Peña Nieto, lauded the deal, and welcomed Panama to the growing collection of what Nieto called the Pacific Alliance, according to the WSJ. This alliance includes Mexico, Chile, Colombia and Peru.
Mexico trades heavily with its neighbors
Although Mexico's primary trade partner is the U.S., it does much trade with its neighbors in Latin America as well. For example, the article cites that Mexico's trade with Panama reached $1.1 billion in 2013. This trade consisted primarily of exports of Mexican goods, including manufacturing products.
Mexico's trade with the U.S. occurs most frequently at the border between the southern part of the U.S. and the northern part of Mexico. As such, border towns see a great deal of trade and will often strike deals to make buying and selling more streamlined.
For example, companies within San Diego, Calif., and Mexicali in the state of Baja California, have been negotiating supply chain deals through Mexican shelter companies, according to PCB 007, a website dealing with printed circuit board manufacturing.
The business leaders of the two cities, along with others along the Mexico-U.S. border have been meeting together at the Mexicali Suppliers Expo, which is now in its fourth year. The expo featured 150 exhibitors in 2013, and it was attended by over 3,000 people.
"Our goal is to enhance the supply chain for foreign manufacturers with operations in Mexico," remarked Alfredo Garcia, president of the Mexicali Supply Expo committee. "The manufacturers which include multi-national companies such as Gulfstream, Honeywell, Skyworks, and Triumph among others, have told us they are actively seeking to increase their list of suppliers."