29 May 2000

Mexico Eyes No.1 Spot Among U.S. Trade Partners

The following article is excerpted from the Reuters New Service on 29 May 2000.

Mexico expects to eclipse Canada as the United States' biggest trading partner within the next decade, a top government trade official said.

Mexico's Trade Undersecretary Luis de la Calle said that his nation, ... will catch up to Canada's level in six or seven years.

``Mexico is going to surpass Canada in coming years,'' said de la Calle, who spoke Saturday at a conference in the city of Cuernavaca ....

Last year, two-way Mexico-U.S. trade was $196.6 billion, edging out Japan-U.S. bilateral trade of $188.9 billion but behind Canadian-U.S. trade of $364.6 billion, according to U.S. Commerce Department figures.

De la Calle noted Mexico, Latin America's second-biggest economy, still faces challenges on the trade front.

... Mexico must diversify its export markets so it does not depend so heavily on the United States for trade revenue, he said. In 1999, Mexico exported about $110 billion to its northern neighbor, a figure that comprises almost 90 percent of its total sales abroad.

Mexico's exports to America trailed Japan's $131.4 billion and Canada's $198.3 billion, U.S. Commerce Department figures show.

Mexico recently signed a free trade pact with the European Union and stuck a trade deal with Guatemala, Honduras and El Salvador to begin free trade in early 2001. It also has free trade with Chile, Costa Rica, Bolivia and Nicaragua.

These two markets -- the EU and neighboring countries of Latin America -- are as large as the United States in trade terms, promising the greatest opportunity for Mexican export growth, de la Calle said.

Mexico must also diversify its export sector on the domestic level so more regions gain the benefits of trade growth, he said. Currently much of Mexico's maquiladora assembly-plant industry is clustered in the north of the country, along the 2,100-mile (3,000 km) U.S. border....