Mexico’s Challenges in Commercial Integration with Pacific Alliance Countries

Abstract

This chapter presents information regarding the significance of the Pacific Alliance in the commercial development in Mexico. Mexico’s integration with the countries of the Pacific Alliance (Peru, Colombia, and Chile) is highlighted through statistical analysis of the composition of Mexico’s exports, the future of the country’s exports, and the balance of trade. Some of these challenges are the growth and diversification of exports, internationalization of small business enterprises, and reduction of the balance of trade deficit with respect to some of its main export products. Results showed that Mexico’s three Latin American commercial partners together represented the third-highest destination for its exports, where Mexico had a favorable balance of trade, which suggests that a further opening of these countries’ economies would bring benefits to Mexican economy.

The decrease of Mexican exports since 2012 to countries such as Chile and Colombia are symptoms that the Pacific Alliance free trade agreement needs more support in order to represent an opportunity to increase export diversification, since most of the Mexico-exported goods go to the United States. This can bring economic and political risks because of the overreliance on one trading partner.

The results also showed that most of Mexico’s exports to the Pacific Alliance country members are hi-tech products. The principal exports in terms of sales come from the telecommunications industry, transportation industry, and the home appliance industry. The rest of the main products exported come from medium- or low-technology industries, with high levels of local added value.

Citation

Velarde-Moreno, O., Alarcón-Osuna, M. and Blanco-Jimenez, M. (2019), "Mexico’s Challenges in Commercial Integration with Pacific Alliance Countries", Blanco-Jimenez, M. and Álvarez, J.C. (Ed.) Regional Integration in Latin America, Emerald Publishing Limited, Leeds, pp. 61-71. https://doi.org/10.1108/978-1-78973-159-020191005