Canada in Mexico
In 1994 the North American Free Trade Agreement (NAFTA) came into effect. It created one of the world’s largest free trade zones and laid the foundation for strong economic growth and rising prosperity for Canada, the United States and Mexico.
For almost 17 years NAFTA has demonstrated how free trade increases wealth and competitiveness, in addition to delivering real benefits to families, farmers, workers, manufacturers, and consumers. This is a comprehensive trade agreement that sets the rules for trade and investment between the three countries.
The Canada-Mexico relationship is characterized by high-level political engagement and fluid dialogue in bilateral and multilateral contexts. Today, with increasing bilateral trade, frequent exchanges take place regarding good governance, regular parliamentary meetings and collaboration with our common neighbor–the U.S.–in areas such as security and trade.
There is also strong international cooperation in forums sponsored by the United Nations. In this dynamic setting Canada and Mexico have become important strategic partners.
Canada has its representation in its Embassy in Mexico City, a Consulate General in Monterrey and a Consulate in Guadalajara. As for Mexico, the country is represented by its Embassy in Ottawa, Consulates General in Montreal, Toronto and Vancouver and also Consulates in Calgary and Leamington.
Relations between the two governments are particularly strong at this time. In October 2006, then President elected Felipe Calderon enjoyed a diplomatic visit to Ottawa and soon after Prime Minister Stephen Harper attended the ceremony when Calderon took charge of the Mexican Presidency.
Lately, the Mexico Minister of Foreign Affairs, Patricia Espinoza, received his counterpart from Canada John Baird. It was his first visit since he took charge last May. At their meetings, Ministers Espinoza and Baird ratified the mutual priority given to strengthen bilateral relations in the foreign policy agendas for both countries.
Both Ministries made an evaluation of the progress made in implementing the Action Plan Mexico and Canada agreed to in May of 2010 as part of the official visit of President Calderon to Ottawa. This was a result of the most recent meeting of the Mexican–Canadian Alliance, celebrated in Mexico last April. Representatives of diverse levels from Governments, entrepreneurs and academics from Mexico and Canada all participated.
Exhibit 1 summarizes the Trade Balance between Mexico and Canada. It shows that commerce between the two countries reached its maximum level last year in 2010. What really stands out is that since 2000 commerce between Mexico and Canada has been evolving very satisfactorily following a path of continuous growth.
Several important factors in the trade balance between Mexico and Canada are revealing. Take, for instance, the fact that during the 11 year time span from January 1999 to December 2010, total exports from Mexico to Canada rose from US$3.3 billion to US$10.7 billion (+220%). And at the same time imports from Canada to Mexico also showed an impressive 192% growth.
Total commerce between the two countries and reciprocal action brought in US$10.7 billion during the year 2010 in trade between the two partners. Total commerce between Mexico and Canada 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$10 billion. In fact, the period 1999 to 2010 represents a 206% growth rate in total commerce between the two nations. And, in 2010 there was a 123% increase in commerce (US$19.3 billion) compared with (US$15.7 billion) in 2009.
Exhibit 2 shows Canadian Investment in Mexico. During the period from January 2000 through June of 2010, companies with capital from Canada invested US$8.9 billion. This amount represents 3.8% of the total invested in Mexico during that time.
According to this information Canada is the fourth largest investor in Mexico during the period January 2000 through June of 2010, following the U.S. (55.7%), Spain (15.8%) and Holland (13.8%).
Last May Bombardier Aerospace celebrated their fifth anniversary of operations at its Mexico Manufacturing Center.
The ceremony was held on May 2nd at the Aerospace Park facility in the presence of Bombardier’s 1,600 Mexican employees and Jean Séguin, Vice President, Quality, Achieving Excellence System, Engineering and Manufacturing. There was also Bombardier Aerospace Vice President Réal Gervais, Mexico Manufacturing Center, and other representatives who called attention to the effort made by everyone involved to make Bombardier’s operations in Mexico a success story.
“The Queretaro site is now integrated with Bombardier’s operations worldwide and is exemplary in the use of problem solving methodology and workforce management flexibility. The site has made a solid contribution to Bombardier’s success throughout the last five years,” according to Mr. Séguin. “We will,” he emphasized, “continue to maintain the level of excellence we have attained and focus on continuous improvement.” “We have a state-of-the-art facility,” explained Mr. Gervais, “where we manufacture the rear fuselage for the Global aircraft family, the mid-fuselage for the Challenger 850 aircraft and the flight control work package for the Q400 NextGen aircraft.
We also fabricate the major composite structures, including the fuselage and wing assembly, for the Learjet 85 aircraft. This is Bombardier Aerospace’s first business jet built primarily from composites,” he said.
By any account Bombardier has proven to be an impressive success story. The Company has reached targets much quicker than originally expected and this is proof of the confidence the firm has that Mexico is a top destiny for the Aerospace Industry.
In the Automotive sector, Magna International, Inc., is looking to Mexico for its next expansion bid, announcing a new US$100-million auto parts facility in San Luis Potosi. The site is located about 400 kilometers southeast of Mexico City. The factory, which will operate under Magna’s Cosma International subsidiary, will produce stamped and welded assemblies and employ about 700 people.
Magna’s CEO Don Walker said this: “The strategic decision to expand operations in Mexico is part of our long-term global strategy of developing in key growth markets.” Magna currently operates 29 manufacturing facilities in Mexico and employs approximately 15,900.
Mexico is also a priority destination for the mining industry from Canada. Agnico Eagle and Gold Corp are among the companies that have an important presence in many states such as Zacatecas, Chihuahua and Sonora.