Mexico and Australia have experienced an increased level of cooperation in recent years that has resulted in several commercially focused outcomes, including a bilateral Double Taxation Agreement in 2004. There is also a Memorandum of Understanding (MOU) on Mining (2002); a MOU on Education and Training (2003); another MOU on Energy (2005); and an Investment Protection and Promotion Agreement, so this partnership between the two countries is strong and growing. Last year Australia and Mexico celebrated their 45th anniversary since diplomatic relations were established.
In 2006 Australia and Mexico agreed to initiate a Joint Experts Group process to investigate ways of strengthening economic relations, including the negotiation of a possible Free Trade Agreement sometime in the future. A “Double Taxation Agreement” entered into force beginning January 1, 2004, gave impetus to bilateral relations by clarifying the taxation rights of both countries.
Australia and Mexico have signed a Memorandum of Unders tanding to formalize political consultations between the Mexican Ministry of Foreign Affairs and the Department of Foreign Affairs and Trade. The Memorandum is the result of an agreement reached between the Minister for Foreign Affairs, The Honorable Stephen Smith MP, and his Mexican counterpart, Ms. Patricia Espinosa during Mr. Smith’s visit to Mexico City in November 2008.
Australia and Mexico are both active members of the G20 and, on climate change, the Copenhagen Commitment Circle. Australia cooperates closely with Mexico in a range of multilateral fora, including the United Nations, the World Trade Organization (WTO) , the forum for Asia Pacific Economic Cooperation (APEC), the Organization for Economic Cooperation and Development (OECD) and the Forum for East Asia Latin America Cooperation (FEALAC).
Bilaterally, Mexico continues to be Australia’s second largest trading partner in Latin America. Economic ties between Mexico and Australia have kept being strengthened. Exhibit 1 summarizes the Trade Balance between Mexico and Australia.
It shows that commerce between the two countries reached its maximum level the past year (2011 ) . What really stands out is that since 2000 commerce between Mexico and Australia has been evolving very satisfactorily following a path of continuous growth, with the exception of the year 2009.
Several important factors in the trade balance between Mexico and Australia are revealing. Take, for instance, the fact that during the 12 year time span from January 1999 to December 2011, total exports from Mexico to Australia were quintuplicated rising from US$165.4 million to US$894.53 billion (+440%). And at the same time imports from Australia to Mexico also showed an impressive 259% growth.
Total commerce between the two countries and reciprocal action brought in US$1.9 billion during the 2011 in trade between the two partners. Total commerce between Mexico and Australia showed important improvements, especially during the period since 2005. This was when, for the first time, the total commerce stats were available identifying the US$1 billion. In fact, the period 1999 to 2011 represents a 327.67% growth rate in total commerce between the two nations. And, in 2011 there was a 31.57% increase in commerce (US$1.9 billion) compared with (US$1.4 billion) in 2010.
Exhibit 2 shows Australian Investment in Mexico. During the period from January 2000 through June of 2010, companies with capital from Australia invested US$245 million. This amount represents 0.1% of the total invested in Mexico during that time.
According to the Australian Embassy, Australian direct investment in Mexico is modest but growing, and it is concentrated in mining, consolidated services (linked to finance and leasing arrangements) followed by manufacturing. Australian companies with interests in Mexico include Macquarie Bank (financial services), Orica, Kings Minerals (mining), Elders (agribusiness), Amcor, Interlake (manufacturing), QBE (insurance), Recall (information management), and UGL (facilities and property management).
Other Australian Companies active in Mexico include: Bolnisi Gold, Howe Leather, Mincom, Australian Elite Genetics, Baja Aqua Farms and TNA Packaging Systems. Several companies such as Rio Tinto Australia, Xstrata Coal and Shell Australia have an interest in Mexico’s energy and resources Sydney Opera House, Australia sectors.