President Luiz Inácio Lula da Silva stated this Monday (30) that trade agreements between Brazil and Mexico need to be reviewed and new ones must be established to explore the full potential of trade and investment between the two countries. Lula participated in a forum with more than 400 Mexican and Brazilian businesspeople, in Mexico City, the Mexican capital.
“The potential of the Mexican economy is extraordinary, the potential of the Brazilian economy is extraordinary, I think we still cannot use 70% of the potential we have. And that’s why we need to make new agreements, discuss in depth without fear of arguing, always bearing in mind that a good commercial relationship policy is a two-way street: I want to sell, but I want to buy. There needs to be a balanced balance in this commercial political relationship”, he said.
Lula is in Mexico for the inauguration of the new president, Claudia Sheinbaum, which takes place this Tuesday (1st).
“I think that you, fellow businesspeople, don’t have to be afraid, sit around a table, see what problems are making our commercial relations difficult and let’s see if the future president of the Republic and I have the wisdom to make sure that the changes can benefit the people of Mexico and the Brazilian people”, added Lula.
During his speech, the Brazilian spoke about the partnership with the National Congress in approving important projects, such as the fiscal framework and tax reform, and defended his government’s agenda which, according to him, aim to guarantee predictability and stability in the country.
“And why did we decide to do all this? So that we could offer guarantees not only to Brazilian businesspeople, but also offer guarantees to foreign businesspeople”, he said. “The most a President of the Republic can do is open the gate, but you are the ones who know how to talk about the business”, he added.
The Brazilian delegation has more than 150 businesspeople from different sectors, such as food, beverages, machinery, tourism, medicines, the textile sector, fertilizers and also communications and energy. The forum promoted panels on investments, food security and food exploration, production chains and new industry.
Agreements
The Brazilian government is committed to deepening the economic complementation agreement between Brazil and Mexico, ACE 53. Brazil wants to expand the number of lines that can enter with trade benefits or lower tariffs, as the bilateral agreement only covers 13% of the tariff lines.
ACE 53 establishes the elimination or reduction of import tariffs for a universe of approximately 800 tariff positions, through the granting of reciprocal preference margins between Brazil and Mexico. The instrument also provides that, in the case of Brazil, imports of products included in the agreement will not be subject to the application of the Additional Freight for the Renewal of the Merchant Marine (AFRMM).
Also on the table is the renegotiation and modernization of ACE 55, a free trade agreement for the commercial exchange of automobiles; light commercial vehicles, chassis with engine and cab and bodies for these vehicles, trucks and chassis with engine and cab; agricultural tractors, harvesters, self-propelled agricultural machines and self-propelled road machines; and auto parts for the listed automotive products.
Current scenario
Mexico is Brazil’s sixth trading partner and the fifth main destination for Brazilian exports. In 2023, bilateral trade reached US$14.1 billion. With almost 130 million inhabitants, Mexico has the second largest economy in Latin America, behind only Brazil, and, in 2023, the country’s economy grew 3.2%, the second consecutive year of growth above 3%.
Trade relations between Brazil and Mexico have grown in recent years. From 2019 to 2023, Brazilian exports to Mexico grew 74%, with the pandemic in the middle, going from US$4.8 billion to US$8.5 billion.
Despite the growth, Brazil’s exports to Mexico represent only 2.5% of the total, similar to Chile, where the country exports 2.3% of the total. On the other hand, Brazilian imports of Mexican products represent 2.3% of total imports. In 2023, Brazil imported US$5.5 billion from Mexico, growth of 4.9% compared to 2022.
Mexico, 09/30/2024 – President of the Republic, Luiz Inácio Lula da Silva, during the opening of the Mexico-Brazil Business Seminar. Photo: Ricardo Stuckert/PR – Ricardo Stuckert/PR
Agenda
Even today, Lula has meetings with the country’s current president, López Obrador, and also with the elected president. Among the topics planned for the bilaterals are the environment and challenges in the climate area, gender issues and trade relations.
Sheinbaum will be the first woman to hold the presidency of Mexico.
Tomorrow morning, the president will go to the Chamber of Deputies, at the Legislative Palace of San Lázaro, where the presidential inauguration broadcast ceremony will take place. Afterwards, all the leaders head to the National Palace, where Claudia Sheinbaum will receive greetings. On the same day, President Lula returns to Brazil.
