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Mexico The entry into force of USMCA and the agri- food sector. Lydia Antonio Director General of Trade Agreements’ Monitoring, Administration and Compliance Oversight Mexico City July 27, 2020

Presentación de PowerPoint€¦ · FDI received from NAFTA region by sector Source: DGIE/SE. FDI Accumulated 1999-March 2020, Canada and USA (U.S. millions) - 20,000 40,000 60,000

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Page 1: Presentación de PowerPoint€¦ · FDI received from NAFTA region by sector Source: DGIE/SE. FDI Accumulated 1999-March 2020, Canada and USA (U.S. millions) - 20,000 40,000 60,000

MexicoThe entry into force ofUSMCA and the agri-food sector. Lydia Antonio

Director General of Trade Agreements’ Monitoring,

Administration and Compliance Oversight

Mexico City July 27, 2020

Page 2: Presentación de PowerPoint€¦ · FDI received from NAFTA region by sector Source: DGIE/SE. FDI Accumulated 1999-March 2020, Canada and USA (U.S. millions) - 20,000 40,000 60,000

CONTENTSI. FROM NAFTA TO USMCA

II. USMCA AGRICULTURE CHAPTER

III. USMCA CHAPTER ON SANITARY AND PHYTOSANITARY MEASURES

IV. MEXICO – US AND MEXICO – CANADA AGRICULTURAL MARKET

V. WHY CHOOSE MEXICO?

VI. OUTREACH STRATEGY

Page 3: Presentación de PowerPoint€¦ · FDI received from NAFTA region by sector Source: DGIE/SE. FDI Accumulated 1999-March 2020, Canada and USA (U.S. millions) - 20,000 40,000 60,000

I. FROM NAFTA TO USMCA

Page 4: Presentación de PowerPoint€¦ · FDI received from NAFTA region by sector Source: DGIE/SE. FDI Accumulated 1999-March 2020, Canada and USA (U.S. millions) - 20,000 40,000 60,000

Source: IMF, Banco de México, WTO and TradeMap.

493Million people

$26Trillion dollars

Population GDP Trade

$6 Trillion dollars

NAFTA

6.5 % of world

population

18.3% of world GDP | 2nd global economy

(2019)

15.9% of global trade

2nd global exporter (2019)

$1.2Trillion dollars

Trade (Intra)

20% of theregión’s total

trade (2019)

FDI

$323Billion dollars

23.1% of world FDI (2018)

1st recipient in the world

NAFTA created one of the most competitiveand dynamic regions in the world

Page 5: Presentación de PowerPoint€¦ · FDI received from NAFTA region by sector Source: DGIE/SE. FDI Accumulated 1999-March 2020, Canada and USA (U.S. millions) - 20,000 40,000 60,000

Foreign DirectInvestmentunder NAFTA

• USA and Canada account for more than half of total FDIreceived by Mexico between 1999- March 2020.

1999-March 2020: 589 B

From the US:

277 BFrom Canada:

41 B

Source: SE/DGIE

1432

6286 105

130156 177

209239

257284

310331

379410

445476

510545

579589

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 IT

Bill

ion

Do

llars

NAFTA FDI to Mexico1999- March 2020 Canada USA Rest of the world

Page 6: Presentación de PowerPoint€¦ · FDI received from NAFTA region by sector Source: DGIE/SE. FDI Accumulated 1999-March 2020, Canada and USA (U.S. millions) - 20,000 40,000 60,000

Source: Banco de México.

NAFTA trade

44 5368

8397 105

123151 144 145 147

168188

217 230 241

193

249

285 299 310329 319 313

338372 385

46 56 5569

84 96 108132 118 111 109 116 125 138 147 161

120154

184 195 197 205 197 189204

227 216

91 110124

152181

200231

282 262 256 257284

313

355377 401

313

403

469494

507534

516 502

543

599601

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Mexico- NAFTA Trade(Billion dollars)

Exports Imports Trade

Page 7: Presentación de PowerPoint€¦ · FDI received from NAFTA region by sector Source: DGIE/SE. FDI Accumulated 1999-March 2020, Canada and USA (U.S. millions) - 20,000 40,000 60,000

FDI received from NAFTA region by sector

Source: DGIE/SE.

FDI Accumulated 1999-March 2020, Canada and USA (U.S. millions)

- 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000

Manufacturing industriesFinancial services and…

CommerceMining

Accommodation servicesTransports, mail ans storages

Real state servicesInformation and massive media

ConstructionBusiness support services

Professional servicesElectric power generation and…

AgricultureOthers

Lesisure services, cultural and…Educative services

Health services

46.8% Manufacturing

Total from NAFTA:

318,957 U.S. millions

Page 8: Presentación de PowerPoint€¦ · FDI received from NAFTA region by sector Source: DGIE/SE. FDI Accumulated 1999-March 2020, Canada and USA (U.S. millions) - 20,000 40,000 60,000

$25615.6%

$29217.8%

$1076.5%

$754.5%

$603.5%

$35814.3%

$32012.8%

$45218.1%

$1445.7%

$1275.1%

0

100

200

300

400

500

600

700

Mexico Canada China Japan Germany

Bill

ion

of

dolla

rs

2019Source: Secretaria de Economía with data from the U.S. Census Bureau. U.S. ExportsU.S. Imports

614.5 B14.8%

612.4 B14.8% 559 B

13.5%

218 B5.3% 188 B

4.5%

In 2019, Mexico was the U.S. Top Trading Partner (614.5 billion in goods, surpassing Canada and China)

Page 9: Presentación de PowerPoint€¦ · FDI received from NAFTA region by sector Source: DGIE/SE. FDI Accumulated 1999-March 2020, Canada and USA (U.S. millions) - 20,000 40,000 60,000

Mexico has 13 FTAs with 50 countries which account for two thirds of world GDP, and a billion consumers.

Mexico is a Relevant Actor in International Trade

North Americaplatform

Investment promotion and protection

Diversification/billion consumers

Agreements: 11 free trade |46 countries| 32 BITs |6 economic complementation | 3 partial scope.To support foreign investor rights Mexico has a network for FTA and 29 BITs with 30 countries

Page 10: Presentación de PowerPoint€¦ · FDI received from NAFTA region by sector Source: DGIE/SE. FDI Accumulated 1999-March 2020, Canada and USA (U.S. millions) - 20,000 40,000 60,000

Foreign Trade:Engine of Mexico’s Economic Growth

10

117 140

600

464

600700

742 761 797 776 761830

915 916

501 528

1,110

900

1,058

1,180 1,2011,274 1,315

1,1711,078

1,1571,222 1,253

1993 1994 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Bill

ion

do

llars

Mexico´s Trade Mexico´s GDPMX Trade MX GDP

Sources: IMF, INEGI and WTO.

NAFTA

Page 11: Presentación de PowerPoint€¦ · FDI received from NAFTA region by sector Source: DGIE/SE. FDI Accumulated 1999-March 2020, Canada and USA (U.S. millions) - 20,000 40,000 60,000

USMCA1. Initial Provisions and General Definitions

12. Sectoral Annexes 23. Labor

2. National Treatment and Market Access for Goods

13. Government Procurement 24. Environment

3. Agriculture 14. Investment 25. Small and Medium-sized Enterprises

4. Rules of Origin 15. Cross-Border Trade in Services

26. Competitiveness

5. Origin Procedures 16. Temporary Entry 27. Anticorruption

6. Textiles and Apparel 17. Financial Services 28. Good RegulatoryPractices

7. Customs and Trade Facilitation

18. Telecommunications 29. Publication and Administration

8. Energy 19. Digital Trade 30. Administrative and Institutional Provisions

9. Sanitary and Phytosanitary Measures

20. Intellectual Property 31. Dispute Settlement

10. Trade Remedies 21. Competition Policy 32. Exceptions and General Provisions

11. Technical Barriers to Trade 22. State-Owned Enterprises 33. Macroeconomic Policies

10 New Chapters

34. Final Provisions

24 Modernized Chapters

Page 12: Presentación de PowerPoint€¦ · FDI received from NAFTA region by sector Source: DGIE/SE. FDI Accumulated 1999-March 2020, Canada and USA (U.S. millions) - 20,000 40,000 60,000

✓ Certainty for North American trade andinvestment, while favoring regional valuechains’ integration.

✓ Its commitment to maintaining free trade in a global context of rising protectionism.

✓ A source of economic growth and highquality jobs.

✓ An opportunity to develop a more competitiveexport platform, through the use of tools andtechnologies associated to the digitaleconomy.

For the Mexican Government, USMCA represents:

Page 13: Presentación de PowerPoint€¦ · FDI received from NAFTA region by sector Source: DGIE/SE. FDI Accumulated 1999-March 2020, Canada and USA (U.S. millions) - 20,000 40,000 60,000

✓Stricter Rules of Origin for the

automotive sector✓Digital Economy

13

USMCA opportunities

✓More inclusive tradeSMEs, Labor,

Environment, Anticorruption

Page 14: Presentación de PowerPoint€¦ · FDI received from NAFTA region by sector Source: DGIE/SE. FDI Accumulated 1999-March 2020, Canada and USA (U.S. millions) - 20,000 40,000 60,000

USMCA opportunities

14

USMCA will be a key factor in the economicrecovery of the three countries as it will contributeto:

• strengthen the productive integration of North America,

• incoporate more value-added in the region,

• boost new regional value chains in North America to replace imports from outside the region.

Page 15: Presentación de PowerPoint€¦ · FDI received from NAFTA region by sector Source: DGIE/SE. FDI Accumulated 1999-March 2020, Canada and USA (U.S. millions) - 20,000 40,000 60,000

Costs reduction from customs operations

Customs Administration and TradeFacilitation

Objective:

To facilitate and streamline goods’ clearance atcustoms and to make administrative processestransparent

Section A: Trade facilitation measures

Section B: Cooperation and Enforcement

New USMCA chapter

USMCA CHAPTER 7

Page 16: Presentación de PowerPoint€¦ · FDI received from NAFTA region by sector Source: DGIE/SE. FDI Accumulated 1999-March 2020, Canada and USA (U.S. millions) - 20,000 40,000 60,000

Technical Barriers to Trade

• Foresees that North American countries willincrease cooperation and transparencyregarding norms, technical guidelines andconformity assesment procedures adoptedin their territories.

• Establishes commitments so that partiesensure that their technical guidelinesregarding labeling do not createunnecessary barriers to regional trade.

USCMA CHAPTER 11

NAFTA CHAPTER IX

Main Provisions

The Chapter seeks toease trade of goodsamong parties bypreventing, avoidingand eliminatingtechnical barriers tointernational tradethat are unnecesary orhave no justification

Objective:

Page 17: Presentación de PowerPoint€¦ · FDI received from NAFTA region by sector Source: DGIE/SE. FDI Accumulated 1999-March 2020, Canada and USA (U.S. millions) - 20,000 40,000 60,000

ENVIRONMENT COOPERATIONAND CUSTOMS VERIFICATIONAGREEMENT to guaranteelegality of flora and faunaproducts between Mexico andthe U.S.

• Commitment to effectively enforce seven multilateralenvironment agreements

• Protection against harmful substances for the ozonelayer, keeping air quality and address ship pollution

• Commitments to prevent illicit flora and fauna tradeand marine litter.

• Sustainable use of biodiversity, fisheries and forestmanagement

• Incentives to adopt and implement best voluntarypractices of corporative social responsibility

Environment New USMCA chapter

USMCA CHAPTER 24

Page 18: Presentación de PowerPoint€¦ · FDI received from NAFTA region by sector Source: DGIE/SE. FDI Accumulated 1999-March 2020, Canada and USA (U.S. millions) - 20,000 40,000 60,000

Small and Medium Enterprises

Main Provisions

The chapter recognizes thefundamental roles SMEs play in keeping trade dynamism and

competitiveness for the parties

• Promotes cooperation to create spaces andease SME’s development

• Seeks to increase SMEs participation inregional trade and investment flows

• Creates incentives for their incorporation toGVCs

New USMCA Chapter

USMCA CHAPTER 25

Page 19: Presentación de PowerPoint€¦ · FDI received from NAFTA region by sector Source: DGIE/SE. FDI Accumulated 1999-March 2020, Canada and USA (U.S. millions) - 20,000 40,000 60,000

• Establishes a Competitiveness Committee composedof each party’s government representatives which willbecome a forum to discuss and develop cooperationactivities to support a solid economic environment, tofoster production, investments and to facilitate tradein North America, based on a work plan.

• The Committee will make recommendations to the Free Trade Commission on how to improve competitiveness in North America, including SME’s participation

Competitiveness

• The chapter expresslyacknowledges the NorthAmerican region, in orderto increase productionand competitiveness ofthe region’s countries

Main provisions:

USMCA New Chapter

USMCA CHAPTER 26

Page 20: Presentación de PowerPoint€¦ · FDI received from NAFTA region by sector Source: DGIE/SE. FDI Accumulated 1999-March 2020, Canada and USA (U.S. millions) - 20,000 40,000 60,000

II. USMCA AGRICULTURE CHAPTER

Page 21: Presentación de PowerPoint€¦ · FDI received from NAFTA region by sector Source: DGIE/SE. FDI Accumulated 1999-March 2020, Canada and USA (U.S. millions) - 20,000 40,000 60,000

Preserves tariff-free market access to agricultural products

Reaffirms commitment to eliminate export subsidies

Ensures non-discriminatory treatment for seasonal products

Improves food safety standard

Includes rules to address all biotechnologies,

The USMCA Agriculture Chapter (3) expands and improves market access for Mexican agricultural products

Page 22: Presentación de PowerPoint€¦ · FDI received from NAFTA region by sector Source: DGIE/SE. FDI Accumulated 1999-March 2020, Canada and USA (U.S. millions) - 20,000 40,000 60,000

Article 3.3: International Cooperation. The Parties shall work together at the WTO to promote increased transparency and to improve and further develop multilateral disciplines on market access, domestic support, and export competition.

Committee on Agricultural Trade address trade issues or barriers/improve market access, exchange of information, promote cooperation for rural development, technology, R&D and capacity building

Annex 3-A applies to trade in agricultural goods Canada - United States.

Annex 3-B applies to trade in agricultural goods Mexico - United States.

Annex 3-C applies to trade in distilled spirits, wine, beer, and other alcohol beverages.

Annex 3-D applies to proprietary formulas for prepackaged foods and food additives.

The USMCA Agricultural Chapter (3)…..

Page 23: Presentación de PowerPoint€¦ · FDI received from NAFTA region by sector Source: DGIE/SE. FDI Accumulated 1999-March 2020, Canada and USA (U.S. millions) - 20,000 40,000 60,000

III. USMCA CHAPTER ON SANITARY AND PHYTOSANITARY MEASURES

Page 24: Presentación de PowerPoint€¦ · FDI received from NAFTA region by sector Source: DGIE/SE. FDI Accumulated 1999-March 2020, Canada and USA (U.S. millions) - 20,000 40,000 60,000

Objective:to protect human, animal, or plant life or health in the territories of the Parties while facilitating trade between them

Modernized Chapter on Sanitary and Phytosanitary (SPS)Measures(Chapter 9)

Ensure that sanitary or phytosanitary measures implemented by a Party do not create unnecessary barriers to trade

The Parties recognize the importance of ensuring that their respective sanitary and phytosanitary measures are based on scientific principles.

Encourage the development and adoption of science-based international standards, guidelines, and recommendations, and promote their implementation by the Parties.

Page 25: Presentación de PowerPoint€¦ · FDI received from NAFTA region by sector Source: DGIE/SE. FDI Accumulated 1999-March 2020, Canada and USA (U.S. millions) - 20,000 40,000 60,000

Source: Secretaria de Economía with data from the U.S. Census Bureau .

WA

OR

CA

MT

ID

NV

AZ

UT

WY

CO

NM

TX

OK

KSNE

SD

ND

MN

IA

MO

AR

LA

MSAL

GA

FL

SCTN

NC

IL

WIMI

OH

IN

KY

WV VA

PA

NY

ME

VT

NH

NJ

DEMD

Washington D.C.

MA

CT

RI

Exports 8.2 BJobs 172,162Share 33%

Exports 2.4 BJobs 7,783Share 49%

Exports 109 BJobs 509,870Share 33%

Exports 2.2 BJobs 16,752Share 19%

Exports 27.8 BJobs 172,162Share 16%

Exports 1.7 BJobs 16,828Share 23%

Exports 8.4 BJobs 18,809Share 13%

Mexico is the largest exportmarket for 7 U.S. states

Mexico is the second largest export market for 19 U.S. states

Mexico is the third largest exportmarket for 3 U.S. states.

U.S. exports by State, 2019

Mexico is a key market for U.S. states’ exports

Page 26: Presentación de PowerPoint€¦ · FDI received from NAFTA region by sector Source: DGIE/SE. FDI Accumulated 1999-March 2020, Canada and USA (U.S. millions) - 20,000 40,000 60,000

We produce together to compete globally

The U.S. exports to MexicoProduct HS4 Amount Share

Gasoline 27.9 B 10.5%

Autoparts 17.0 B 6.4%

Accesories/computers 11.7 B 4.4%

X Low cost shipments 7.4 B 2.8%

Integrated circuits 6.9 B 2.6%

Gas 5.4 B 2.0%

Computers 5.1 B 1.9%

Diesel motors 4.5 B 1.7%

Electric switches 4.4 B 1.7%

Phones/cellphones 4.4 B 1.6%

Mexico exports to the U.S.Product HS4 Amount Share

Cars 35.0 B 10.1%

Computers 26.4 B 7.6%

Autoparts 24.7 B 7.1%

Trucks 22.8 B 6.6%

Crude oil 14.2 B 4.1%

Insulated wire 11.4 B 3.3%

Phones/cellphones 10.5 B 3.0%

Televisions 9.0 B 2.6%

Tractors 8.6 B 2.5%

Seats 7.0 B 2.0%

Millions of U.S. DollarsSource: Secretaria de Economía with data from the U.S. Census Bureau. (2019 data) and De Gortari, A. (2017) . Disentangling Global Value Chains.

Automotive

Electronics

Energy

38% U.S. content in Mexican auto exports to the U.S.

Page 27: Presentación de PowerPoint€¦ · FDI received from NAFTA region by sector Source: DGIE/SE. FDI Accumulated 1999-March 2020, Canada and USA (U.S. millions) - 20,000 40,000 60,000

IV. MEXICO-U.S AGRICULTURAL MARKET

Page 28: Presentación de PowerPoint€¦ · FDI received from NAFTA region by sector Source: DGIE/SE. FDI Accumulated 1999-March 2020, Canada and USA (U.S. millions) - 20,000 40,000 60,000

Source: Secretaria de Economía with data from the U.S. Census Bureau .

WA

OR

CA

MT

ID

NV

AZ

UT

WY

CO

NM

TX

OK

KS

NE

SD

ND

MN

IA

MO

AR

LA

MSAL

GA

FL

SCTN

NC

IL

WIMI

OH

IN

KY

WV VA

PA

NY

ME

VT

NH

NJ

DEMD

Washington D.C.

MA

CT

RI

Mexico is the largest agro exportmarket for 10 U.S. states

Mexico is the second largest agro export market for 16 U.S. states

Mexico is the third largest agro export market for 6 U.S. states.

U.S. agricultural exports to Mexico by State, 2019

Mexico is a key market for U.S. states’ agricultural exports

AK

Page 29: Presentación de PowerPoint€¦ · FDI received from NAFTA region by sector Source: DGIE/SE. FDI Accumulated 1999-March 2020, Canada and USA (U.S. millions) - 20,000 40,000 60,000

Average annual growth rate 19/93: 7.7%

6.3 7.5

7.4

9.29.3

10.8

10.5

11.512.7

12.814.2

15.817.8

20.322.9

26.4

24.328.2

34.2

35.3

35.8

38.7

38.7

40.843.2

45.047.5

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

50.0

Bill

ion

so

f d

olla

rs

U.S. Exports MX. Exports Tot. Trade

Mexico – U.S. agricultural trade

Source: Secretaria de Economía with data from the Foreign Agricultural Service, USDA.

Page 30: Presentación de PowerPoint€¦ · FDI received from NAFTA region by sector Source: DGIE/SE. FDI Accumulated 1999-March 2020, Canada and USA (U.S. millions) - 20,000 40,000 60,000

In 2019 the U.S. and Mexico traded over 47.5 billion dollars in agricultural goods.

$19 B14%

$21 B15% $14 B

10%

$28 B23%

$24 B18%

$4 B, 4%

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

50.0

Mexico Canadá China

Bill

ion

s o

f US

do

llars

2019

Source: Secretaria de Economía with data from the Foreign Agricultural Service, USDA.

47.5 B17.7%

44.4 B16.5%

17.4 B6.4%

U.S. ExportsU.S. Imports

Mexico became the U.S. Top Trading Partner in agricultural products

Page 31: Presentación de PowerPoint€¦ · FDI received from NAFTA region by sector Source: DGIE/SE. FDI Accumulated 1999-March 2020, Canada and USA (U.S. millions) - 20,000 40,000 60,000

Mexico - US agricultural trade is complementary

While the U.S. exports to Mexico meat, dairy and cereals, Mexico providesfresh fruit and vegetable products to the U.S.

Mexico exports to the U.S.Product Amount* Share

Fresh fruit 6,933 24%

Fresh vegetables 6,288 21%

Wine & Beer 3,953 13%

Snack foods 2,346 8%

Procesed fruit & vegetables 1,842 6%

Red meats 1,373 5%

Other consumer oriented products 1,252 4%

Live animals 886 3%

Tree nuts 730 2%

Fruit & vegetable juices 419 1%

The U.S. exports to MexicoProduct Amount* Share

Corn 2,730 14%

Soybeans 1,878 9%

Dairy products 1,546 8%

Pork 1,278 6%

Beef 1,107 6%

Poultry 1,077 5%

Other intermediate products 941 5%

Wheat 812 4%

Prepared foods 777 4%

Forest products 709 4%

*Millions of dollarsSource: Secretaria de Economía with data from the U.S. Census Bureau. (2019 data)

Fruits & vegetables

Animal originproducts

Cereals & pulses

Page 32: Presentación de PowerPoint€¦ · FDI received from NAFTA region by sector Source: DGIE/SE. FDI Accumulated 1999-March 2020, Canada and USA (U.S. millions) - 20,000 40,000 60,000

Mexico – NAFTA agri-food trade

Source: SADER

-10,000

0

10,000

20,000

30,000

40,000

50,000

60,000

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2018 2019

US

4 m

illo

ns

Trade balance Exports Imports Total Trade

Page 33: Presentación de PowerPoint€¦ · FDI received from NAFTA region by sector Source: DGIE/SE. FDI Accumulated 1999-March 2020, Canada and USA (U.S. millions) - 20,000 40,000 60,000

IV. MEXICO-CANADA AGRICULTURAL MARKET

Page 34: Presentación de PowerPoint€¦ · FDI received from NAFTA region by sector Source: DGIE/SE. FDI Accumulated 1999-March 2020, Canada and USA (U.S. millions) - 20,000 40,000 60,000

Source: Secretaría de Economía con datos de Statistics Canada

YUKON

WHITEHORSE

BRITISH COLUMBIA

VICTORIA

TERRITORIOSDEL NORESTE

YELLOWKNIFE

ALBERTA

EDMONTON

SASKATCHEWAN

REGINA

MANITOBA

WINNIPEG

NUNAVUT

ONTARIO

TORONTO

OTTAWA

QUEBEC

QUEBEC

NEWFOUNDLAND AND LABRADOR

ST. JOHN’S

NOVA SCOTIA

HALIFAX

CHARLOTTETOWN

NEW BRUNSWICK

FREDERICTON

➢ Motor vehicles and parts are the most important sector to Canadian exports to Mexico (24%); and the second sector is farm, fishing, and intermediate food products (15%).

Ontario was Mexico’s primary provincial trading partner, capturing almost three quarters (72.83%) of total bilateral trade, followed by

Quebec (8.71%), Alberta (6.17%), and British Columbia (5.67%).

➢ Mexico is the third destiny for Ontario’s exports and fourth of Alberta and Manitoba.

➢ In Sector of the farm, fishing, and intermediate products exported to Mexico:

• Saskatchewan 91.31%• Manitoba 52% • Alberta 24%• Newfoundland & Labrador 7.90%• British Columbia 3.10%• New Brunswick 1.54%

Mexico is an important market for Canada’s agricultural exports, 2019

PRINCE EDWARD ISLAND

Page 35: Presentación de PowerPoint€¦ · FDI received from NAFTA region by sector Source: DGIE/SE. FDI Accumulated 1999-March 2020, Canada and USA (U.S. millions) - 20,000 40,000 60,000

Mexico – Canada Agri-food Trade

Canada exports to Mexico Oils, grains and seeds, Mexico provides fresh fruit,vegetable and beverages to Canada

Mexico exports to CanadaProduct Amount* Share

Edible fruit and nuts; peel of citrus fruit or melons 305,755 39%

Beverages, spirits and vinegar 89,044 11.4%

Sugars and sugar confectionery 69,278 8.9%

Preparations of cereals, flour, starch or milk; pastry cooks' product

63,620 8.1%

Cocoa and cocoa preparations 55,330 7.1%

Edible vegetables and certain roots and tubers 53,413 6.8%

Meat and edible meat offal 39,010 5%Miscellaneous edible preparations 37,760 4.8%

Canada exports to MexicoProduct Amount* Share

Oil seeds and oleaginous fruits; miscellaneous grains, seeds and fruit; industrial or medicinal

394,694 31.9%

Meat and edible meat offal 308,274 24.9%

Cereals 206,427 16.7%

Animal or vegetable fats and oils and their cleavage products; prepared edible fats

77,817 6.3%

Products of the milling industry; malt; starches 58,530 4.7%

Cocoa and cocoa preparations 54,383 4.4%

*Thousand of USDSource: Secretaria de Economía with data from ITC (2019 data)

Fruits & vegetables

Animal originproducts

Cereals & pulses

Page 36: Presentación de PowerPoint€¦ · FDI received from NAFTA region by sector Source: DGIE/SE. FDI Accumulated 1999-March 2020, Canada and USA (U.S. millions) - 20,000 40,000 60,000

Canada total trade- top countries, 2019Agriculture, forestry, fishing and hunting

0

5

10

15

20

25

012345678

Export(USD Billions)

02468

101214

01234567

Import(USD Billions)

Source: Secretaria de Economía with data from Statistics Canada include: code 11 NAICS: agriculture, forestry, fishing and hunting

Page 37: Presentación de PowerPoint€¦ · FDI received from NAFTA region by sector Source: DGIE/SE. FDI Accumulated 1999-March 2020, Canada and USA (U.S. millions) - 20,000 40,000 60,000

0.5 0.50.4 0.5 0.6 0.5

0.6

0.9 0.91.1

1.3

1.7

1.4

1.9

2.4 2.52.4 2.4

2.22.4

2.72.7

2.5

0

0.25

0.5

0.75

1

1.25

1.5

1.75

2

2.25

2.5

2.75

3

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Canada Exp Canada Imp Tot. Trade billions

Mexico – Canada Farm, fishing, and intermediate food products

Average annual growth rate 19/97: 20%

Sources: Secretaría de Economía with data from StatisticsBoard of Governors of the Federal Reserve System (US), Canada / U.S. Foreign

Exchange Rate.

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• US was the 1st destination of Mexicanbeer (2019).

• Mexico was the 1st largest source ofbeer imports from US (2019).

• US imports represent 35.1% of worldimports for this product, its rankingin world imports is 1.

• Canada imported 371,075 tons of maltbeer in 2019.

• Canada was the 4th destination ofMexican beer (2019).

• Mexico was the 2nd largest source ofbeer imports from Canada (2019).

Beer and spirits

• US was the 1st destination of Mexicanalcoholic spirituous beverages (2019).

• Mexico was the 1st source of spirituousbeverages imports from US(2019).

• Canada was the 4rd destination ofMexican spirituous beverages (2019).

• Mexico was the 1st source of spirituousbeverages imports from Canada (2019).

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• Mexico was 1st exporter of avocados,which represented 42.9% of world exports for this product, in 2019.

• Mexico was the 1st source of avocado imports from US(88.2% in 2019) .

• Mexico was the 1st source of avocado imports from Canada (94.1%, in 2019).

Avocados, tomatoes• Mexico was 1st exporter

of tomatoes. Its exports represented 23.8% of world exports for this product, in

2019. • US was the 1st destination

of Mexican tomatoes(2019).

• Mexico was the 1st source of tomatoes imports from

US (85.8%, in 2019). • Mexico was the 1st source of tomatoes imports from

Canada (69.5%, in 2019).

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• Mexico was 2nd exporter of fresh raspberries,blackberries, mulberries and loganberries. Its exportsrepresented 18.5% of world exports for this product, in2019.

• Mexico was the 1st source of fresh berries importsfrom US (99.2%, in 2019).

• Mexico was the 1st source of raspberries,blackberries, mulberries and loganberries importsfrom Canada (65.1%, in 2019).

Berries

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V. WHY CHOOSE MEXICO?

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USMCA and other 12 FTAs with 48 countries connect the Mexican economy to more than 1.3 billion consumers (60% of the world’s GDP)

1. Mexico: 7th largest exporter in the world and 1st in Latin America

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According to the WEF, Mexico ranks among the top 30% countries withbest transport infrastructure.

2. Mexico offers a solid infrastructure and logistics network

172,000 km roads, where 62.4% of México´s total exports move.

27,000 km railway tracks, move 13% of Mexico´s total exports

117 Ports move 19.7% of Mexico´s total exports

76 Airports (64 int. + 12 nat.) move 4.3% of Mexico´s total exports

Source: SecretarÍa de Economía with data from INEGI.

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$140

$9

0

20

40

60

80

100

120

140

160

USD/m3

Low shipping costs

China to U.S. Mexico to U.S.

Maritime days to selected destinations

Destination Mexico China India Brasil South Korea

New York 5 32 25 15 21

Los Angeles 4 18 31 23 17

Rotterdam 16 32 20 17 33

Yokohama 19 4 17 35 3

Source: The Boston Consulting Group in De la Madrid (2014)

3. Strategic location and competitive logistic costs

Source: GBM. Global Value Chains Disruptions

More than 50 ports of entry between the U.S. and Mexico

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2%

3%

4%

4%

6%

6%

8%

20%

20%

23%

0% 5% 10% 15% 20% 25%

Stone

Metals

Chemicals

Textiles

Minerals

Services

Agriculture

Electronics

Machinery

Vehicles

Source: The Atlas of Economic Complexity. High Complexity Sectors Low Complexity Sectors

With more than 2/3 of its exports in high complexity sectors, Mexico ranks asthe 19th most complex economy

4. Mexico has a diverse and innovative industrial platform

Industry share of Mexican exports by economic complexity, 2018

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5. Internet connectivity and broadband accesssupports 4th IR, IOT, digital economy

18

20

26

29

36

43

47

53

59

61

61

67

71

92

223

490

0 100 200 300 400 500

Chile

Netherlands

Colombia

Canada

Australia

Poland

Spain

Italy

Korea

France

Turkey

United Kingdom

Germany

Mexico

Japan

United States

Subscriptions, millions

Mexico is third in mobile broadband suscriptions within OECD

74%mobile

penetration rate

17%annual growth in past 5 years

92Mmobile broadband

suscriptors

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6. Young, competitive and skilledworkforce

17%

12% 12%

8%7%

0

2

4

6

8

10

12

14

16

18

20

Mexico India Brazil SouthAfrica

Indonesia

Share of graduates come from engineering programs, 2017

Source: UNESCO

6%

22%

45%

16%

10%

0%5%

10%15%

20%25%30%35%40%45%50%

14 - 19 20 - 29 30 - 49 50 - 59 60 +Age group

Economically active population in Mexico by age, Q1 2020

Source: INEGI

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VI. OUTREACH STRATEGY

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Outreach strategy

USMCA – CPTPP Seminar: Trade Opportunities inNorth America and the Transpacific Region

National USMCA Awareness Campaign toexplain, in each state, the opportunities the newAgreement presents

Series of webinars in the United States andCanada to communicate the advantages of doingbusiness with Mexico

Reporte T-MEC publication

USMCA Help Center

Total sessionsreach:

231,529vists*

*Facebook and YouTube plays up to June 22, 2020

264,766vists*

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www.gob.mx/t-mec

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https://www.gob.mx/t-mec/acciones-y-programas/textos-finales-del-tratado-entre-mexico-estados-unidos-y-canada-t-mec-202730?state=published

USMCA Chapters

https://www.gob.mx/cms/uploads/attachment/file/560548/Protocolo_Esp_Verificaci_n_CLEAN__2020_06_02_.pdfProtocol of Amendment

https://www.gob.mx/t-mec/acciones-y-programas/comision-de-libre-comercio-247174?state=published

Free Trade Commission’sFirst Decision

Where to find USMCA texts?

USMCA’s full text is available at Secretaria de Economia’swebsite

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Thank you!Lydia Antonio

lydia.antonio@economía.gob.mx