Revealing numbers
In terms of imports, Europe occupies a relevant place for Mexico, since it has a 12.7% share in the total value, but Asia surpasses it, with 40%.
On the old continent, Mexico has the Free Trade Agreement with the European Union (TLCUEM), which has been in force since 2000, and its modernization will soon be completed, which is expected to be signed in 2025.
With this, Mexico and the European Union will seek greater trade integration, but there are still issues to resolve regarding energy and investments.
The European Union represents 87% of what Mexico buys from Europe.
In 2000, when the TLCUEM began, Mexico bought about 14.3 billion dollars from the European Union, by 2023 it was 65.122 million, a growth of 4.5 times.
But in Asia, in China, in that same period the growth was exponential, because in 2000 Mexico imported only 2,880 million dollars from the Asian giant, while in 2023 purchases reached 114,191 million; increased almost 40 times.
With this growth, China became Mexico’s second largest supplier of merchandise.
These numbers reflect the size of the challenge for Mexico to replace Chinese imports.
the same goal
The countries of the European Union can become an ally, since they also pursue the same goal: reducing dependence on China, which is their main supplier.
Figures from the European Commission indicate that European Union imports from China amounted to 515.9 billion euros in 2023, this amount in the trade balance meant a deficit of 292 billion.
The Commission itself recognizes that the economic relationship between the European Union and China is seriously unbalanced, both in terms of trade and investment flows.
The European Union sees the opposite in Mexico, far from a threat it is an opportunity; with the country, its trade balance is surplus, that is, it sells more than it buys.
The European Union is Mexico’s third source of imports, after the United States and China.
Mexico’s main purchases from the European Union include machinery and appliances, transport equipment, chemicals and basic metals.
While the purchases that Mexico makes from China are mobile phones, machinery, automobiles and auto parts, as well as machines and data processing units.
This is where specialists see the challenge, that what Mexico is importing from China is also available in other countries, but not only that, that the costs are competitive.
From the economic research center Mexico, how are we doing?, there is a need to make a differentiated plan to apply this Chinese import substitution plan, as well as an analysis of which components the United States considers represent a risk of national security.
In the Mexican business sector it has also been said that not everything can be replaced, because there are no other regions or countries that can provide certain goods that are brought from China and are needed.
So, it is better to focus on where Mexico can increase its capacity in the development of inputs – as is the case of chips, to be more competitive – than to spend its energy on others that may take decades and that are not of added value.
