Free Trade Agreements of Mexico (Countries with agreements)

If you want to learn what are free trade agreements of Mexico, as well as which countries are involved in these agreements. In this article you will learn everything about them, so we invite you to continue reading.

Free Trade Agreements of Mexico

Free trade agreements are an international right to form a free zone between states that come to cooperate. In this kind of Mexico free trade agreementsThere are two different types of trade agreements: bilateral and multilateral.

Bilateral agreements are established when two countries relax trade limitations to obtain greater business opportunities between both places. In contrast, multilateral agreements are agreements between two or more countries and these are the most difficult to negotiate.

Currently, Mexico actively participates in multilateral and regional organizations and forums, such as the following:

• The World Trade Organization (WTO).
• The Asia-Pacific Economic Cooperation Forum (APEC).
• The Organization for Economic Cooperation and Development (OECD).
• The Latin American Integration Association (ALADI).

The first free trade agreement that was signed in history was in 1891 and this was the Cobden-Chevalier Treaty that was generated between Great Britain and France. Since then, many free trade agreements have emerged, especially within the framework of the integration of countries whose regions historically tend to help each other.

What are the free trade agreements that Mexico has?

There are currently 13 Mexico free trade agreements with 46 countries, as well as 33 agreements for the Reciprocal Promotion and Protection of Investments and 9 trade agreements that are economic complementation and partial scope agreements within the framework of the Latin American Integration Association. Among these treaties we can mention the following:

• T-Mec between Canada and the United States.
• G-2 FTA with Colombia.
• Costa Rican FTA.
• Chile FTA.
• TLCUEM with the European Union.
• Israel FTA.
• Northern Triangle FTA between Salvador, Honduras and Guatemala.
• EFTA FTA between Iceland, Liechtenstein, Norway and Switzerland.
• Uruguay FTA.
• FTA Japan.
• FTA Peru.
• Central American FTA between Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua.
• Panama FTA.

Objectives of the treaties

Within the objectives of the different Mexico free trade agreements, we have the following:

North American Free Trade Agreement (NAFTA)

This is replaced by the T-Mec, which was a treaty signed between Mexico, the United States and Canada since January 1, 1994. Which have the following objectives:

General Purpose

It consists of coming to form a free trade zone, where clear and permanent rules are established for commercial exchange. That it will allow an increase in the flow of trade and investment, as well as new job opportunities and improvement in the living standards of the citizens of the countries involved.

Specific objective

• Get to eliminate barriers to trade and help in the cross-border movement of goods and services.
• Help promote fair competition conditions. As well as protect and enforce intellectual property rights.
• Create procedures that are effective for the application and fulfillment of this agreement, for its administration and resolution of problems.
• Establish guidelines for trilateral, regional and multilateral cooperation aimed at expanding and improving benefits.
• As well as reducing the vulnerability of exports to unilateral measures and measures taken in accordance with the law.
• Likewise, strengthen the national industry through a strong and competitive export sector.
• As well as help in the creation of new jobs.

Free Trade Agreement between the United States and the Republic of Costa Rica

This was an agreement signed between Mexico and the Republic of Costa Rica, which entered into force on January 1, 1995. It has the following objectives:

General Purpose

It is to create a free trade area promoting the process of regional and continental integration. among the participating countries.

Specific objective

• Helps stimulate business growth and diversification.
• It eliminates trade barriers and helps the transit of goods and services.
• Promotes conditions of fair competition in trade.
• Increase investment opportunities.
• Protect and enforce intellectual property rights.
• Establish guidelines for cooperation between the two parties, as well as regionally and multilaterally, where the scope is expanded and the benefits of the treaty are improved.
• As well as creating procedures that are good for the application and fulfillment of the agreement, such as joint administration and problem solving.

Free Trade Agreement between the United Mexican States and the Republic of Bolivia

This is an agreement that was signed by Mexico and Bolivia and that entered into force on January 1, 1995. It is of economic complementation for the purposes of ALADI as of June 7, 2010. And among the objectives of this treaty we can mention the following:

General Purpose

Establish a free trade area with detailed and transparent rules for the benefit of both nations in terms of trade and investment.

Specific objectives

• Stimulate expansion and diversify trade.
• Eliminate trade barriers and help in the circulation of goods and services.
• Promote fair competition in trade.
• Increase investment opportunities.
• Protect and enforce intellectual property rights.
• Establish the guidelines for cooperation between both countries, as well as regionally and multilaterally, expanding or improving the benefits received by the treaty.
• Creation of procedures that are good for the application and fulfillment of the treaty, as well as its administration and resolution of problems.

Free Trade Agreement between the United Mexican States and the Government of the Republic of Nicaragua

This treaty was signed between Mexico and Nicaragua, which entered into force on July 1, 1998. Within the objectives of this treaty we can mention the following:

General Purpose

Establish a free trade zone for the circulation of goods and services. between the two countries involved.

Specific objectives

• Stimulate expansion and diversify trade.
• Elimination of trade barriers and help in the circulation of goods and services.
• Promote fair competition in trade.
• Increase investment opportunities.
• Protect and enforce intellectual property rights.
• Establish the guidelines for the cooperation of both countries, as well as regionally or multilaterally, expanding and improving the benefits.
• Creation of procedures that are good for the application and compliance with the treaty.

If you want to know the main rules of foreign trade in Mexico, we will leave you the following link with a lot of information on this topic What are the general rules of foreign trade?

Free Trade Agreement between the United Mexican States and the Oriental Republic of Uruguay

Between the Mexico free trade agreements, this became effective on July 15, 2004. Among the objectives of this treaty are the following:

Specific objectives

• Strengthen regional economic integration, this being the main instrument of the Latin American countries to advance their economic and social development. Ensuring a better quality of life for their countries.
• Develop the rights and obligations derived from the agreements of the World Trade Organization.
• Establish a legal framework that helps in the growth and diversification of trade flows.
• Offer economic agents clear rules for the development of trade and investment, with the aim of activating participation in economic and commercial relations between the two countries.
• Create a larger and safer market for the goods and services that are produced in its territory.
• Encourage innovation and creativity, as well as promote the trade of goods and services that are protected by intellectual property rights.

Free Trade Agreement between Mexico and the Northern Triangle

This is a treaty that was signed between Mexico, El Salvador, Guatemala and Honduras, which entered into force on March 15, 2004. In addition, it has the following objectives that we will mention:

General Purpose

Get to establish a free trade zone that allows them to have advances in these specific regions.

Specific objectives

• Stimulate the growth and diversification of trade in goods and services.
• Promote the conditions of free competition between the countries involved.
• Eliminate trade barriers and help the circulation of original goods and services.
• Elimination of barriers to the movement of capital and people engaged in the business.
• Increase opportunities to invest.
• Protect and enforce intellectual property rights.
• Establish cooperation guidelines between each of the interested parties to expand and improve the benefits of the treaty.
• Create procedures that are good for the application and fulfillment of the treaty.

Free Trade Agreement Mexico and the European Union

This treaty entered into force on July 1, 2000. It has the following objectives that we will mention:

General Purpose

It is to create a commercial space within a context of multinational integration through the establishment of a free trade zone for the opening of development opportunities.

Specific goal

• Promote the exchange of goods and services.
• Liberate the preference, in a progressive and reciprocal way, of trade in goods and services.
• Revitalize economic and commercial activity.
• Attract inputs and new technology for Mexican companies.
• As well as generating new job opportunities.
• Promote investment directly.
• Increase opportunities and strategic alliances for the Mexican company.

Free Trade Agreement between Mexico and Israel

Between the Mexico free trade agreements, we have this one that has the following objectives that are mentioned:

General Purpose

Establish a free space to increase trade and the economy through the release of taxes and restrictions on imports originating in the countries within the treaty.

Specific objectives

• Elimination of obstacles to trade and facilitating the free movement of goods and services.
• Promote legal conditions for competition in free trade zones.
• Increase investment opportunities between both countries.
• Creation of procedures that are good for the application and fulfillment of the treaty.
• Establishment of guidelines for cooperation between two nations, as well as regionally and multilaterally to expand and improve the benefits of the treaty.

Free Trade Agreement between the United Mexican States and the States of the European Free Trade Association

The European Free Trade Association is made up of the following:

• The Republic of Iceland.
• The principality of Liechtenstein.
• The Kingdom of Norway.
• And the Swiss Confederation.

This treaty entered into force on July 1, 2000, which has the following objectives:

General objectives

• Create commercial spaces through a context of multinational integration through the establishment of a free trade zone for the opening of external development opportunities.
• This extensive network of trade agreements signed by Mexico is extended by the agreement signed by the members of the European Free Trade Association.

Specific objectives

• Promote the exchange of goods and services between the countries involved.
• Gradually liberalize trade in goods and services.
• Encourage commercial and economic activity.
• Diversify Mexican exports and have preferential access in Europe.
• Attract inputs and new technologies for the Mexican company.
• Generate more jobs within the country.

Agreement for the strengthening of the Economic Association between the United Mexican States and Japan

Among the objectives of this agreement we have the following:

Specific objectives

• Liberate and help with the trade of goods and services between the parties.
• Increase investment opportunities and strengthen the protection of these investments and activities between the parties.
• Increase opportunities for suppliers and get them to participate in public sector purchases.
• Promote cooperation and coordination for the effective application of competition laws of each of the parties involved.
• Create procedures that are effective for the implementation and operation of this agreement.
• Establish a framework to encourage cooperation between the two nations and improve the business environment.

Advantages and disadvantages of Free Trade Agreements

Among the advantages and disadvantages of the application of free trade agreements, we can mention:

Advantages of Free Trade

• The nations that come to trade freely become dependent on one another, as well as in turn come to strengthen commercial and diplomatic ties.
• They promote comparative advantage.
• It allows the birth of new international commercial dynamics that are free of tariffs and other mechanisms that hinder this dynamic.
• It comes to enrich the regions that trade freely with each other.

Disadvantages of Free Trade

• The commercially stronger countries may come to favor non-state intervention in the foreign trade balance.
• They come to generate great changes in people's ways of life.
• It does not benefit the workers.
• Just as it causes a migration of employment, so businesses tend to go to where there are more favorable conditions.

Characteristics of internal and external Free Trade

Within the characteristics of internal and external free trade we can mention the following:

Free foreign trade

Foreign free trade is where countries come to exchange goods and services freely, taking advantage of their advantages. For this to happen, countries sign these treaties, which generally implies a reduction in tariffs and any other barriers that exist. And among the features it has we have the following:

• Final goods, inputs or capital goods can enter into an agreement freely across borders.
• There will be reduced or non-existent tariffs.
• There will be no barriers to trade such as import/export quotas, there are no limits on foreign investment, among others.

Free internal trade

When we talk about internal free trade, we are talking about free trade within the borders of a country. Where we say that within the country there is a market economy where complete freedom is encouraged in terms of competition between companies according to the preferences of each of the consumers who visit them. And among the characteristics that it possesses are the following:

• Free entry and exit within the company.
• You have freedom of entrepreneurship.
• The price is determined by the interaction between supply and demand.
• Consumers have the information and are free to choose between the different offers.

Importance of the Free Trade Agreement

Free trade agreements are an important part of global economic initiatives, which seek to gradually advance in regional integration or even in the world market. Seeking to oppose protectionism to prevent borders between countries from being impediments to the flow of products, capital and services between various countries.

In the following video you will be able to see an explanation about the free trade agreement and a lot of interesting information. So we suggest you watch it in full. Remember to share all this information with your friends and family, in this way they will keep abreast of everything.

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