Mexico, the EU and globalisation since 2000 Sample Clauses

Mexico, the EU and globalisation since 2000 money laundering and the liberalisation of trade Within the new global system, Mexico has become a low-cost ancillary economy to the US, serving in part as a stepping stone to US markets for TNCs from other continents, with 80% of its trade executed with the US. In some industries, Mexico has become deeply integrated in global value chains – something which, although described in different words, was already recognised in the Harvard Business Review in 1990: ‘The relaxation of licensing regulations and the substantial drop in tariffs [in the 1980s] has already had a profound effect on foreign subsidiaries. Foreign-owned companies … have been freed from the necessity of producing all essential parts and end-products internally [in Mexico] and can now rationalize their manufacturing organizations and focus their efforts on the things they can produce most efficiently in Mexico.’16 Economic relations between the EU and Mexico have greatly expanded under the Global Agreement, which eliminated all tariffs for industrial goods.17 Since the Global Agreement entered into force in 0000, XX-Xxxxxx trade in both directions has nearly tripled to reach $65 billion in 2014, which is 8 per cent of Mexico’s total foreign trade, although the US accounts for 64 per cent of this.18 On the other hand, the EU, unlike the US, has retained a large trade surplus with Mexico. The considerations applying to trade between Mexico and Europe are quite different from those between Mexico and the US: for European TNCs, factories in lower-wage countries within the EU, as well as neighbouring areas such as Turkey and North Africa, serve the same purpose as Mexican ones for US corporations. The new Xxxxx approach has marked an era of uncertainty in US free trade agreements, which has in turn destabilised Mexico’s trade strategy since the NAFTA agreement in the 1990s. European companies have tended to use Mexico not as a market in itself, but as a gateway to the US market and to an extent also Canadian markets. If the US closes its markets and pursues a protectionist agenda for trade, European companies will have to rethink their investment strategies.