MexECON Blog

Mexican Senate OKs New Free Trade Deal

According to press reports, the Mexican Senate last week approved a bilateral free trade agreement with Peru that was initially signed in April.  The vote was 55 in favor, 47 against.  According to Mexican President Felipe Calderon's administration, the deal will double bilateral trade within five years and create 17,000 new jobs.

Comment:  Mexico already has free-trade agreements with several countries.  The most important is the North American Free Trade Agreement (NAFTA), which entered into force in 1994.  Since then, Mexico has signed and ratified other agreements with the European Union, Japan, Israel, and several Latin American countries.  The non-NAFTA trade deals primarily aim to diversify Mexico's export markets, but they appear to have had only limited success.  Over 80% of Mexican exports still go to the United States, and that is unlikely to change as a result of the new trade deal with Peru.

Patrick Fearon, CFA
Vice President, Fund Management

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