Photo credit: Water under the bridge, little rock arch, splash of the Pacific Ocean, South Mazatlan, Sinaloa, Mexico by Wonderlane

In 2012, the nine countries comprising the Trans-Pacific Partnership (TPP) embraced Mexico as a tenth member before Canada and Japan. U.S. officials commented that all members – United States, Australia, New Zealand, Peru, Chile, Singapore, Malaysia, Vietnam and Brunei – jointly accepted Mexico’s application.

The acceptance of Mexico within the TPP was one of the big achievements of former President Felipe Calderon during his six-year presidential term. As a member of the TPP, Mexico now has a role in the global supply chains for both the U.S. and Asia Pacific markets. Calderon said, “This is one of the free trade initiatives that’s most ambitious in the world and would foster integration of the Asia Pacific region, one of the regions with the greatest dynamism in the world.”

In addition, Mexico will get the chance to diversity its exports. Within a year from being accepted into the TPP, the country’s major exports were electronics (38%), cars and auto parts (17%), and oil (12%). This is a long way from the low value maquila operations Mexico first started with. By offering lower production costs and cheaper experienced labor, Mexico has quickly grown into an export hub that competes with the likes of China.

As a result of these outcomes and the strategies implemented by the current Mexican President Enrique Peña Nieto, Mexico’s economy grew. The Mexican Ministry of Finance estimates that the economy grew by 0.8 percent in the fourth quarter and reached 1.3 percent in 2013. This was the result of the increase in demand for Mexican goods as well as the reforms President Peña Nieto made to open the oil industry to private and foreign investors. With a stronger economy, Mexico expects its higher job retention rates, rising living standards, and a lower percentage of poverty.

A third advantage of joining the TPP is strengthening the country’s relationship with its neighbour in the north. Though Mexico has already partnered with the U.S. in the North American Free Trade Agreement (NAFTA), it was the U.S. that invited the Latin American country to join the negotiations of the TPP.

U.S. Trade Representative Ron Kirk released a statement after U.S. President Barack Obama and President Calderon met at the Group of 20 summit announcing the news.” “We are delighted to invite Mexico, our neighbour and second largest export market, to join the TPP negotiations. Mexico’s interest in the TPP reflects its recognition that the TPP presents the most promising pathway to boosting trade across the Asia Pacific and to encouraging regional trade integration. We look forward to continuing consultations with the Congress and domestic stakeholders as we move forward.”

This was part of a broader U.S. strategy to link its economy to fast growing markets. For Mexico, this would allow the country to strengthen its synergies and deepen the natural integrations of its exports in the U.S. market.

Prior to joining the Trans-Pacific Partnership, Mexico’s total trade with the nine TPP countries had reached $466 billion in 2011. Meanwhile, the country’s exports to the U.S. were $280 billion.

From February 17 to 25, 2014, Commerce Ministers and Chief Negotiators met at Singapore for an additional round of negotiation. If Mexico succeeds on those negotiations and deep reforms, it will become an international trade and investment platform.

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