Trade
The partnership between Australia and Mexico is strong and growing. Both countries work closely together in multilateral forums such as APEC, the G20, the World Trade Organization, the International Whaling Commission and within the United Nations. There is also a comprehensive framework of bilateral agreements which supports increased cooperation, including a bilateral Plan of Action (2011), a Memorandum of Understanding (MOU) on Cooperation in Agriculture (2010), an MOU on Mining (2010), an MOU on Political Consultations (2009), an MOU on Education and Training (2008), and an MOU on Energy (2005). In 2009, Mexico joined the Australian led Global Carbon Capture and Storage Institute (GCCSI) as a founding member.
Mexico was Australia’s largest merchandise trading partner in Latin America in 2013 with two-way trade worth $2.5 billion. The trade flow between Australia and Mexico has grown five fold in the last 10 years. There is still a big potential to continue this expansion. The trade in Australian education and training services has been especially strong and student numbers continue to grow. Mexico is Australia’s fourth largest education and training market in Latin America. In 2013, around 2,000 Mexican students were enrolled in Australian educational institutions, most pursuing higher education. Australian food and wine brands are increasingly on sale in Mexico. The stock of Australian investment in Mexico increased twenty-five fold between 2009 and 2013 to over A$5.3 billion.
Export to Mexico
- Australia’s merchandise exports to Mexico were $393 million, dominated by coal. Other exports included medicaments, plastic plates, sheets and film, ores and concentrates and a growing range of services
- Coal is Australia’s largest single export to Mexico, with a total value of A$116 million in 2013. Coal trade with Mexico was enhanced by the Mexican Government’s decision in 2002 to remove a 3 per cent tariff from most primary and intermediate goods (including coal) imported from all non-North American Free Trade Agreement (NAFTA) sources, which had previously favoured US and Canadian coal exporters
Import from Mexico
- Imports of merchandise goods from Mexico have increased significantly over the last decade and were valued at $2.1 billion in 2013
- The major imports from Mexico were telecom equipment and parts, passenger motor vehicles and alcoholic beverages
Investment
The stock of Australian investment in Mexico increased twenty-five fold between 2009 and 2013 to over A$5.3 billion. The energy sector is becoming an increasingly important element of the trade relationship, with the sale of Australian coal to Mexico creating new opportunities for Australian business. Reforms to Mexico’s energy sector, which will put an end to state-owned oil giant Pemex’s decades-old monopoly over oil and gas, offer significant opportunities for Australian companies. Expansion of mining-related services also offers strong potential for future growth. The relationship has grown as Australian companies in a range of industries (mining services and technology, agribusiness, food and beverages, IT, software, biotechnology, automotive parts and education and professional services) enjoy success in Mexico. There is potential for new areas such as water management equipment and services, clean technology and environmental services including clean energy.
Mexico attracts significant foreign direct investment due to NAFTA membership and its generally liberal investment laws. The investment environment has improved markedly over the last several decades as a result of domestic reform and the introduction of more simplified procedures, higher ceilings on foreign equity and greater intellectual property protections. Australian direct investment in Mexico is modest but growing, and concentrated in mining, consolidated services (linked to finance and leasing arrangements) followed by manufacturing. Australian companies with interests in Mexico include Macquarie Capital, Incitec Pivot, Nufarm, Elders, Azure Minerals, Global Resources Corporation (Cloncurry Metals), Worley Parsons, Chep, Spotless Group, QBE Insurance, UGL Equis, TNA Packaging, Securency, CSL, Orica, Boart Longyear, Boral, Howe Leather and Lend Lease.
Mexican investment in Australia has largely been concentrated in private real estate and manufacturing, although one of Mexico’s largest food companies, tortilla manufacturer Gruma, has its factory Mission Foods located in Victoria. In December 2009 Mexican manufacturing company Metalsa, a subsidiary of Grupo Proeza, acquired two manufacturing plants in Melbourne previously owned by Dana Holding Corporation. Metalsa manufactures structural components for the light and commercial vehicle markets.
Australia-Mexico trade 2008-14 fact sheet (30kb pdf)
All text see Footnote 1.
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