The upgrade of Mexico’s Economic Association Agreement with Japan
By Adina Moloman
Source: The News; SE
The Mexican Economy Secretary and the Japanese Ambassador to Mexico signed the Modifying Protocol for the Economic Association Agreement (AAE) last month.
The upgrade of this agreement was formulated on a new protocol, which was approved this month by both Japanese legislature and Mexican Senate.
Mexico and Japan first signed their Economic Partnership Agreement back in 2005, with the purpose of facilitating trade between these two countries, investment and bilateral cooperation.
The upgrade protocol on one side will increase Japanese import quotas which are suppose to stimulate the export of poultry, oranges, orange juice and agave nectar to Japan; and on the other side will simplify customs procedures between Mexico and Japan, and accelerate duty reduction in Mexico for Japanese mainly auto parts products used by the automotive Japanese manufacturing companies, that operates under a Mexico Maquiladora Program.
Both Japanese and Mexico Manufacturers took advantages of this agreement. The estimated Mexican exports to Japan for 2011, are higher than the export amount registered in 2008 (US$ 3.8 billion). It was registered an increase in Mexican exports to Japan by 60 percent and Japanese exports to Mexico by 42 percent since 2004.
The exports from Mexico to Japan are mainly agricultural products, fish and meat, and the exports from Japan to Mexico are mainly components used in the automobile, electronics, metals, machinery and industrial equipment sectors.
Japanese exports to Mexico were US$ 13.4 billion accumulated for the 10 month period registered this year and are expecting to increase as a result of restoration in the supply chain for automotive and electronics parts. It is important to mention that almost 90 percent of Mexican imports from Japan are goods that are used in manufacturing processes, which raise the question of how much local economic growth is generating.
