Free Trade Agreement between Mexico and Japan: What You Need to Know

Mexico and Japan have been trading partners for decades, but in 2018, they took their relationship to the next level by signing the Japan-Mexico Economic Partnership Agreement (JMEPA). This agreement is a free trade agreement that eliminates tariffs on a range of goods and services between the two nations.

Benefits of the JMEPA

The JMEPA is expected to boost trade between Mexico and Japan significantly. With the elimination of tariffs on a wide range of goods and services, businesses in both countries will be able to import and export products at lower costs. This will enable Japanese companies to gain access to the Mexican market, which is the second largest economy in Latin America, while Mexican businesses will get access to the lucrative Japanese market.

The JMEPA has also created new opportunities for investment, particularly in infrastructure, automotive, and electronics sectors, which have strong trade relations between Mexico and Japan. The agreement also aims to promote cooperation in fields such as intellectual property, customs procedures, and environmental protection.

Mexico’s Relationship with Japan

Mexico and Japan have a long history of trade. Japan is one of the largest investors in Mexico, with investments in industries such as automotive, electronics, and aerospace. Japanese companies have been expanding their operations in Mexico to take advantage of the country`s strategic location, well-developed infrastructure, and highly-skilled workforce.

Mexico, on the other hand, is Japan`s second-largest trading partner in Latin America after Brazil. The country has a strong manufacturing sector that produces a range of products, including automobiles, electronics, and agricultural goods. With the JMEPA, Japan is expected to increase its imports of these products from Mexico.

Impact on Other Countries

Although the JMEPA is a bilateral agreement, it will have a wider impact on other countries. Mexico and Japan are members of the Trans-Pacific Partnership (TPP) – a trade agreement between 11 countries in the Asia-Pacific region. The JMEPA will provide a template for other TPP members on how to negotiate bilateral agreements with each other.

The JMEPA also sends a strong message to the United States, which has recently been increasing tariffs on exports from Mexico and Japan. The JMEPA provides an alternative to the protectionist policies of the US, demonstrating the continued commitment to free trade among some of the world`s largest economies.

Final Thoughts

The Japan-Mexico Economic Partnership Agreement is a significant step forward for both countries. With the elimination of tariffs and increased investment opportunities, businesses in both Japan and Mexico stand to benefit greatly from the agreement. The JMEPA also sends a positive message to the rest of the world about the importance of free trade and the benefits of a collaborative approach to international business.