What is a free trade agreement?
There is a lot of talk about the new agreements that Mexico is once a part of, but we will start by defining that it is a free trade agreement.
In general, treaties are trade agreements to expand the market for goods and services among participating countries in different countries around the world; its main function is the substantial elimination or reduction of tariffs on goods between the parties, and service agreements regulated by the World Trade Organization (WTO) or by mutual agreement between countries.
It is important to know that a free trade agreement does not necessarily lead to regional economic, social and political integration (in the case of the European Union, the Andean Community, Mercosur and the Union of South American Nations). While these were created to encourage trade, they also included fiscal and budgetary policy clauses, as well as the movement of common people and political bodies, elements absent from an FTA.
Free Trade Agreements to which Mexico belongs
Currently, we have a network of 12 Free Trade Agreements with 46 countries, 32 Agreements for the Promotion and Reciprocal Protection of Investments (APPRIs) with 33 countries and 9 agreements within the framework of the Latin American Integration Association.
Mexico actively participates in various multilateral and regional for a to promote a strong multilateral trading system that gives greater certainty to trade and foreign direct investment flows.
2000 EUROPEAN UNION
2001 ICELAND, LIECHTENSTEIN, NORWAY, SWITZERLAND
2013 CENTRAL AMERICA
2016 PACIFIC ALLIANCE
For the latter (CPTPP) the implementation of the agreement reduces tariffs on 95% of the products exchanged by these countries.