SECTIONS
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NEWS
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 Toyota analyzing site for plant
Dallas - Toyota, the Japanese automotive company, in analyzing the possibility to establish. another assembly plant in North America, possibly in Mexico, to meet the growing demand for Toyota cars in this Region...
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Mexico-Japan trade reaches US$15.5 billion
Mexico is now the first exporter of fresh avocado to Japan, with sales for. US$57.6 million and in only one year it already has 95.69% of this market. For pork the product with the highest exports to Japan...
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HEB will invest more than MEP$500 million
Monterrey, Mexico - HEB, the supermarkets chain, will open two more stores in Monterre's metropolitan area, which will be part of the expansion plan to open five new stores in several states in Mexico, with an investment over MEP$500 million, announced Norma Treviño.
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56,588 duty-free Japanese cars arrive into Mexico
Japanese cars' import quota into Mexico will be 5 thousand 558 cars. and will apply from April 4, 2006 to March 31, 2007, according to the terms of the Economic Association Agreement signed by both countries, informed the Ministry of the Economy.
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WEF highlights Chile's technological leadership and Mexico's advancement
Chile keeps the best performance in Latin America as the most competitive country in Information and Communication Technologies, making its leadership even higher when compared to Brazil, which dropped a few places in the ranking, according to World Economic Forum (WEF).
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Nemak considering plant in China
Monterrey, Mexico - Nemak, a subsidiary company of Alfa Group, will install this year a new plant in China to manufacture aluminum heads and engine mono-blocks, informed Dionisio Garza Medina, Alfa's President and CEO.
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Employment in maquilas up 2.6%.- INEGI
Mexico City - In the first month of the year, maquiladora industry employed one million 172 thousand 897 people, a figure 2.6% over that in January, 2005; while in manufacturing the number of jobs remained unchanged in said reference month.
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ARTICLE OF THE WEEK
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| Mexico - Japan Economic Association |
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By Samuel Peña Guzman
Foreign Investment Coordinator of Nuevo Leon
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 Next September it will be two years since Mexico signed an Economic Association Agreement with Japan.
This Agreement undoubtedly set a hallmark in our trade relations with that powerful Asian nation. The trade agreement will open a new horizon in trade and investment flow between Mexico and Japan. With this agreement, Mexico automatically eliminated tariffs from 44% of products imported from Japan. Also, acknowledging the asymmetry existing between both countries, Mexican companies will have zero tariff for 95% of goods exported to Japan. In the next few years, tariffs will be eliminated from the remaining 5% for being products considered sensitive for their producers. This 5% includes steel, which will pay tariffs in the next 5 years due to the fact that it competes against domestic steel, mainly the one used in automotive industry.
Japanese investment is growing at a swift pace, in some states it can even be compared to that coming from the USA. Throughout the years Mexico and Japan have strengthened friendship and cooperation ties, the Mexico-Japan Economic Association Agreement makes those ties even closer and links us to the second largest economy in the world. This will consolidate Mexico's position as the country not only with the largest number of trade agreements in the world, but also as a country leader in promoting foreign investment and trade. From a different perspective, trade agreements entered by Mexico provide preferential access to countries that concentrate two thirds of world production.
The challenge now for Mexico lies precisely in taking advantage of being the second country in entering a trade agreement with Japan, this means that Mexico will have tariffs preferences way ahead any other competing country. The Agreement represents a significant opportunity to enter the Japanese market and at the same time attract larger investment flow that will contribute to increase production, employment and competitiveness.
 Nowadays, Japan imports more than 60% of the food they consume, and also produces large amounts of goods in the food sector for export, therefore increasing the opportunities for Mexican food sector. On the other hand, Japan is an important producer and exporter of high technologies goods with a significant value added and high salaries that also require supplies produced by Mexico.
Being Japan the tenth most populated country in the world, with 127 million people, and an annual per capita GDP of US$34,510, my attention was called to a particular issue I noticed during my recent visit there: Japanese people longevity, Japan's population average age is 42. Mexico is the eleventh most populated country in the world with 104 million people and an average age quite below Japan's, only 23. In a few years we will also be exporting qualified labor to Japan.
In spite of cultural differences and differences in average age between both countries, the effect regarding other countries could mean an increase in Mexico's incentives, because the Agreement will foster a larger investment by Japanese companies in Mexico to manufacture products either meant for the domestic market or to be exported to other countries making use of our large trade agreements network. Also, more companies, both domestic and of third countries', will be interested in investing to produce in Mexico and export to Japan, bringing benefits to investors that produce or manufacture in Mexico based on the preferential access granted by the Trade Agreement.
States like Baja California Norte or Nuevo Leon could be greatly benefited by this Agreement, because these are the states in northern Mexico with the largest foreign investment from Japan. Foreign investment estimated flows from Japan in the next 10 years could reach US$12 billion, with an annual average of US$1.2 billion; which, translated into jobs generation, means that around 40 thousand new direct jobs could be created every year, not to mention indirect jobs that could easily reach at least an equal amount.
In spite of being the second economy in the world, Japan is the eighth source of Foreign Direct Investment in the world, contributing with an annual average of US$26 billion, per studies made between 1994 and 2003.
 Mexico's northern states, as we had already mentioned, will undoubtedly have to increase their promotion for trade and investment coming from Japan. Holding trade fairs and seminars to identify business opportunities, as well as promoting strategic alliances will become an essential task for all of Mexican states, which will take advantage of this economic upturn to make a better use of the Trade Agreement. The lesson to be learned is that we will not be outdone by China, as we were in the United States, where, in spite of being neighbors and in spite of the Trade Agreement that has been in force for over 10 years, China displaced Mexico to the 3rd place as US economic partner. We cannot afford the luxury to just let pass the opportunities being offered by the Japanese economy.
Hector Samuel Peña LL.M, MPA Currently works as a Foreign Investment Coordinator for the State Government of Nuevo León, he has LLM Masters in Law from American University, Washington, College of Law, and a Masters in Public Administration from the George Washington University and has advised foreign companies who are expanding operations in to Mexico. He is also a professor at the State University of Nuevo Leon in Monterrey, Mexico and a Member of the Consejo Mexicano de Asuntos Internacionales COMEXI.
The point of view is strictly from the author and does not represent the vision on any of the author institutions relationships.
He can be reached at: samuel.pena@mexicoglobal.com
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MEXICO'S WEEKLY HEADLINES
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| » Experts reduce projections of inflation in Mexico for 2006
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| » Trade between Mexico and Canada increases
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| » IMSA will invest US$170 million
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| » Mexicans lead Internet use
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| » Sale of cars grows 8.3% in March |
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EVENTS
2006
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APRIL
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AMCON
Denver, CO, USA
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