• Mexico’s Trade Policy with Asia: The Case of Japan

Mexico’s Trade Policy with Asia: The Case of Japan

By Adolfo Alberto Laborde Carranco
June 24, 2022
Mexico’s foreign trade has three main commercial policies: diversification, innovation and inclusion. Diversification would take place through new markets and a greater focus on customs and sanitary issues with our trading partners. Innovation would refer to technology development and the worldwide 4.0 industry. Inclusion would mean doubling efforts so that more small and medium-sized enterprises (SMEs) in bilateral trade could join world value and purchasing chains. These measures go hand in hand with promotion and trade intelligence efforts. In other words, measures are connected to the goal market. Besides focusing on supply, demand, and niche business opportunities of our most competitive sectors, we are mapping out a plan for internationalizing Mexican businesses with the technical, financial, and logistical capabilities to do so.
flags of Japan and Mexico
Japan and Mexico share much in common, and have huge potential for mutual growth.
In this regard, Japan represents a huge opportunity for Mexico as a complementary commercial, investment and trade. Bilateral relations with this nation are strong. In 2021 trade relations were significant, U.S.$17.08 billion in imports and 4.16 billion in Mexican exports (Secretaría de Economía, 2022). Japan represents to Mexico it´s 6th trade partner in the world, 8th place as an export market and 4th place as Foreign Direct Investment (FDI) in our country. A cultural diplomacy to recover its position is helping reactive the bilateral relations, along with an innovative new business model based on Mexican–Japanese co-investment. Japan faces many challenges, and Mexico is a key component to its positioning in North and Latin America. Although the challenge is a tough one, their friendship is reflected in the positive image of each other in public opinion. Besides the option that Japan could offer for Mexico’s international economic diversification, we must remember that Mexico has 14 Free Trade Agreements (FTA´s) with 50 countries (Gobierno de México, 2022). Yet the changes to U.S. trade policy and the current global political and economic situation due to Ukraine conflict, leave no doubt that these strategies are complementary to guarantee markets for Mexican exports. The bitter experience during the long months of North America Free Trade (NAFTA now a days called USMCM) renegotiations forces Mexico to seek out trade diversification, and the answer is besides Japan, precisely the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) which includes Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. If this trade mechanism is to reach its goal—diversification of Mexico’s foreign trade—hard work is needed to promote it, something that seems complicated considering the current global situation.
Promotion by the Ministry of Economy and the Ministry of Foreign Relations is feasible and complementary because both Ministries together can offer more technical and economic capabilities to carry out the plan. Moreover, as part of the diversification, Mexico must be clear about what the supply and exportable demand of its products are from each member of the CPTPP as well as Japan. Despite Covid-19, economic intelligence and travel are required, many business trips and economic and financial promotion can be part of the commercial strategy. It is a huge challenge, but it is hoped that the Ministries Economy and the Ministry of Foreign Affairs, who at the beginning of 2019 signed a collaboration agreement to promote exports and attract FDI (Secretaría de Relaciones Exteriores, 2019) are doing this mission. Finally, we must not forget Asia’s geopolitical situation and strategic and commercial alliances. As we have known for years that Asia is where the future lies, Mexico has taken a dynamic foreign trade policy with the region. With the current situation in the world, Mexico should have constant innovation in Asia, but not forget our national and economic interest in the context of the commercial, trade, and investment with Japan.
Adolfo Alberto Laborde Carranco is a Minister representative of Economy Secretary at Embassy of Mexico in Tokyo, Japan. He was invited by Japanese government to visited organizations (JICA and JETRO), ministries (MOFA and METI), Universities (Kobe University, Sophia University and Tsukuba University) and Prefectures and cities (Hiroshima, Kansai, Kobe and Tokyo) on December 13-22, 2019. This trip helped to him to updated and understand the present economic and commercial dynamic between Japan and Mexico.
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