Mexico Nicaragua Free Trade Agreement

Mexico and the European Free Trade Association (EFTA), composed of Iceland, Liechtenstein, Norway and Switzerland, signed a free trade agreement on 27 November 2000. The Agreement entered into force on 1 July 2001. This was the first free trade agreement concluded by EFTA with a foreign partner country. Since the entry into force of the agreement, Mexico and EFTA have met at least four times to explore opportunities for further trade integration, including agricultural and trade in services. In September 2008, the two sides agreed to adopt an amendment to the transport agreement to facilitate trade. They also discussed the possibilities of other changes, such as banning export tariffs and expanding trade in processed agricultural products18 The United States remains the largest export market for Mexican products, despite the Mexican government`s efforts to liberalize trade with other countries. Dependence on the United States as an export market makes the Mexican economy more vulnerable to economic and political conditions in the United States. For example, the 2009 global financial crisis, which contributed to the slowdown in the U.S. economy, caused the deepest recession in the Mexican economy since the 1930s. Recently, after the U.S. election of President Donald Trump in November 2016, in which he made election promises to withdraw from NAFTA and build a border wall with Mexico, the Mexican peso has weakened to record levels.47 Since the early 1990s, Mexico has increasingly committed to trade liberalization and has a trade policy that is one of the most open in the world. Mexico has actively pursued free trade agreements (SAAs) with other countries to boost economic growth, but also to reduce its economic dependence on the United States. The United States is by far Mexico`s largest trading partner.

More than 80% of Mexican exports go to the United States. To increase trade with other countries, Mexico has concluded 11 free trade agreements with 46 countries3 Mexico is a signatory to the Trans-Pacific Partnership (TPP), a proposed free trade agreement signed on February 4, 2016 after eight years of negotiations between 12 Asia-Pacific countries. It would require ratification by Congress before it could enter into force. On January 30, 2017, the United States announced to the other signatories to the TPP that it had no intention of ratifying the agreement, effectively terminating the U.S. ratification process and the eventual entry into force of the TPP, unless the government changed its position. Mexico and other TPP countries proposed promoting a free trade agreement without U.S. participation4 In the mid-1980s, the Mexican economy was on the verge of collapse due to the 1982 debt crisis, in which the Mexican government was unable to meet its external debt obligations. Much of the government`s efforts to address these economic challenges has been the privatization of public industry and trade liberalization.

Mexico had few opportunities to open up its economy through trade liberalization. In the late 1980s and early 1990s, Mexico implemented a series of measures to restructure the economy, including unilateral trade liberalization, the replacement of import substitution policies with others aimed at attracting foreign investment, the reduction of trade barriers, and the country`s competitiveness in the event of non-oil exports. In 1986, it acceded to the General Agreement on Tariffs and Trade (GATT) and introduced further trade liberalization measures that led to closer relations with the United States. The Trump administration`s initial trade policy includes the U.S. withdrawal from the TPP and the possibility of renegotiating NAFTA. As for the TPP, some TPP signatories have announced their intention to promote a similar agreement without the US, which could have an impact on the US.