Mexico and China BET on more trade

In the next five years, China will import goods and services for 10 trillion dollars, this is an opportunity for Mexico to increase its presence in the market of its second commercial partner.

The Chinese ambassador to Mexico, Qiu Xiaoqi, said that in recent years, his country and Mexico have entered a period of broad development with concrete achievements and progress  and he hoped that the narrow work will continue.

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From 5 to 10 November, the China International Import Exhibition (CIIE) will be held in Shanghai; Mexico participates as one of the 12 guest countries of honor, with more than 65 national companies.

The coordinator of International Affairs of Sagarpa, Raul Urteaga Trani, reported that 32 companies that will be present in the activity belong to the agri-food sector, which increases double-digit presence in the main Asian economy.

In the first eight months of the year, Mexico has exported to China 283 million dollars in agri-food products; that is, an annual growth of 79.7 percent.  What we see reflects this commercial opening that China has made, ” he added.

In the CIIE, two protocols will be signed, the first one for small and medium businessmen from Chiapas, Tabasco, Veracruz, Guerrero, Colima, and Jalisco to take bananas to that country. The other will allow Tamaulipas, Sinaloa, and Guanajuato to export sorghum.

In his participation, the general director of ProMéxicoPaulo Carreño, reported that in the last six years, exports from Mexico to China grew 250 percent, up to 2016 totaled 5 thousand 411 million dollars.

He added that between 2016 and 2017 the foreign investment of that nation to our country quadrupled, reaching almost 900 million dollars.

Paulo Carreño said that Mexico has raised the quality of manufacturing products exported to the Asian country, as is the case of entrepreneurs who process avocado oil and agave honey, as well as infant formulas.

In addition, in a context in which the T-MEC puts new rules on the commercial relationship of Mexico with respect to other economies, the ambassador of China considered that the relationship between both nations is not affected.

He reiterated that he is convinced that  in the coming years we will develop our cooperation in all fields, we are convinced that our interests are mutual  .

He reported that after reaching the T-MEC, the foreign ministers of China and Mexico spoke to give certainty and reiterate the sovereignty of Mexico, so he specified that the nation takes it to practice and strive to maintain its ties with China.

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Mexico looking to diversify and expand its trading partners

Currently, 80% of Sinaloa’s exports are shipped to the US

Of the total exports from Sinaloa to other countries, 82.5 percent corresponds to sales to the United States market. In revenues, this represents 8.9 percent of the State Gross Domestic Product.

During 2014, Sinaloa exported products for close to 770 million dollars, which represented 0.2 percent nationally. The main shipments were tomato, chickpea, bovine meat, oil and fishmeal, shrimp, squid, and tuna.

Nationally, more than 80 percent of exports go to the United States. This represents a high dependence of the productive sectors of the country with the northern neighbor. And the greater the trade of a state with the United States, the greater its vulnerability.

Vegetables, main product

In the period from January to June 2016, the main Mexican exports to the United States were fresh vegetables, fresh fruits, alcoholic beverages and vinegar, sugars and confectioneries, preparations of vegetables and cereals, among others.

Divided by-products, the first 10 are beer, tomato, avocado, pepper, tequila, raspberry and blackberry (berries), grape, strawberry, cattle, and boneless beef. This, according to data of the Agricultural Counseling for the United States.

In the same period, the 10 main imports from the North American market to our country were corn, soybeans, soy waste, wheat, pork ham, other foods, boneless meat, milk powder and cream, fructose and starch waste.

Twenty-two states in Mexico export vegetables to the United States. These exports represented about 583 thousand 795 million dollars, with Guanajuato being the leading state. Another 21 states imported vegetables from the United States for 23 million 139 thousand dollars.

Sinaloa exported vegetables to the neighbor of the north for a value of 12 million 139 thousand 433 dollars. In turn, imported American vegetables for 84 thousand 628 dollars. Thus, the value of legument exports from 22 states to the United States exceeds its imports.

According to the Department of Commerce of the United States, Mexico is the second destination of exports from that country with 15.7 percent of the total, preceded by Canada with 18.6 percent and is the third supplier, with 13.1 percent of the imports, after China, which accounts for 21.5 percent and Canada, which adds 13.2 percent.

In the case of California, the Mexican market imports 12.53 of the products that that entity sends abroad. For Nebraska, this amounts to 14.53 percent.

But these states are not all, in 2015, Mexico was the main destination for exports from Arizona (39.7 percent of total state exports), New Mexico (38.49 percent) and Texas (37.6 percent).

In addition, Mexico is the first, second or third market of 30 of the 50 states of the American Union.

It is noteworthy that the US content of Mexican exports to the American market is almost 40 percent of the components of the said products, according to the National Bureau of Economic Research.

The US, Canada, and Mexico signed a trade deal to replace NAFTA on Friday at the G20 summit in Argentina. It’s known as the United States-Mexico-Canada Agreement, or USMCA.

Achieving and maintaining agreements is an urgent need for many states with high dependence on the United States market for their exports.

In the case of Sinaloa, this commercial relationship represents 8.9 percent of the state GDP and this is mainly due to food.

There are other entities more vulnerable. Examples are Chihuahua, Baja California, Coahuila and Tamaulipas. For all of these states, exports to the United States represent more than 50 percent of its Gross Domestic Product and, for the most part, are from the manufacturing sector.

Source: Notimex, Pro Mexico, Vox

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