Commercial benefits of the International Treaties in Mexico
An international treaty may be defined as a written agreement between subjects of international rights and destined to produce legal effects. A treaty declares an agreement of intent that creates a commitment and should be complied with by the Rule-of-Law parties (or other subjects to international law), under the penalty of compromising their international liability. With some exceptions (as territorial treaties that create a situation called “objective”), the treaties do not have any effect concerning third parties that are not part of the agreement.
Mexico has a network of 12 Free Trade agreements with more than 46 countries (FTA); more than 30 for Investment Promotion and Protection (RIPPA) agreements with more than 30 countries and 9 limited scopes (Economic Complementation and Partial Scope, ECA/PSA) in the framework of the Latin American Integration Association (LAIA/ALADI). Likewise, Mexico participates actively in different organizations and associations, as well as in events, multilateral and regional forums; some examples are the World Trade Organization (WTO/OMC); Asia-Pacific Economic Cooperation (APEC) mechanism; the Organisation for Economic Co-operation Development (OCDE) and LAIA/ALADI.
Advantages of International Treaties
Thanks to the international treaties the Rule-of-Law exists attached to legality, that is, the international law establishes a framework based on an international legal system in which the states are the main actors and define their mutual legal responsibilities, and within the states, as individuals, they are not transformed. It covers areas, such as human rights, disarmament, transnational organized delinquency, refugees, migration, treatment of detained individuals, use of force, conduction of war, environment, sustainable development, oceans and outer space, global and international communications, trade among others.
In the International Trade treaties, countries form part of a long-term commercial strategy in search of consolidating markets for products and services to develop a competitive exportable offer, which at the same time generates more and better opportunities for the national markets.
Throughout time, the countries that have achieved developing the most in the last year are those that have successfully incorporated international trade, widening in this manner market size for their entrepreneurial sectors.
International trade treating in Mexico
Mexico is one of the leading countries in Latin America that has consolidated as a fundamental element for the development of other regions, which has caused an advantage favoring national entrepreneurs and enterprises. With the international treaties, Mexico obtains tariff preference according to the treaty subscribed.
“For the majority of the companies the Executive Council of Global Enterprises (CEEG), Mexico is one of the main markets and manufacturing centers. Some enterprises are in this country because the trade treaty network is an extraordinary platform to participate in the global market and the attractive domestic market it has”, recently highlighted by Claudia Jañez, President of CEEG.
Main trade agreement in Mexico
Mexico has been one the most open economies in the world with trade agreements with more than 46 countries, among them the main ones are the United States – Canada – Mexico (T-MEC), Asia-Pacific Economic Cooperation Forum (APEC), Free Trade between Mexico and the European Union (TLCUEM), North American Free Trade Agreement (only with Central America) and the Trans-Pacific Partnership (TPP) Agreement. These agreements have been a great evolution for the Mexican economy.
T-MEC is the new trade agreement with Mexico, the United States, and Canada that substitutes the North American Free Trade Agreement (NAFTA/TLCAN, which led to economic growth and contributed to raising the standard of living of the populations of the three-member countries besides generating foreign trust and investment.
This agreement is one of the main supports that allowed maintaining the behavior of the Direct Foreign Investment (DFI) during the quarter of 2020, very similar to those of 2019 despite the pandemic and uncertainty due to the lack of Rule-of-Law in our country, as agreed by representatives from foreign enterprises.
“For Mexico it means investment, that is, foreign investment will continue arriving. It is very important that the treaty be in force and timely because we are about to come out from the pandemics and need to reactivate the economy to exit from economic recession, the fall produced by the pandemic in the world economy (…) The treaty is a great option to produce, create employment and boost commerce without having to go far from our homes, cities, states, and nations. In other words, the import volumes performed by our countries from the rest of the world can be produced in North America with fewer transportation costs, reliable providers for the enterprises and using a regional workforce” expressed the President of Mexico.
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