japan-mexico: how to effectively chase the chameleon?
TRANSCRIPT
Japan-Mexico: How to Effectively Chase the
Chameleon? 10th Anniversary of the Japan-Mexico
Economic Partnership Agreement
Beatriz Leycegui Mexico City, Mexico
[email protected] June 11, 2015
1
Contents
I. World Trade: A Chameleon
II. Chasing the Chameleon: Japan-Mexico Strategies
III. Final Remarks
2
I. World Trade: A Chameleon
3
Section I - World Trade: A Chameleon
Transformation of World Trade
• Just like a:
• It adapts to the specific needs at any given time and location.
• This is ever more true in the past two decades.
4
Section I - World Trade: A Chameleon
XXI Century Trade Revolution
As a consequence of the information and communication technologies revolution (1980s & 1990s)
Remember when you sent your first e-mail?
5
Section I - World Trade: A Chameleon
XXI Century Trade Revolution
6
ICTs revolution led to the fragmentation of
production processes.
Expansion of GVCs –
Made in the world
Section I – World Trade: A Chameleon
XXI Century Trade Revolution
7
Sou
rce:
*O
rgan
izat
ion
for
Eco
no
mic
an
d C
oo
per
atio
n D
evel
op
men
t (2
01
3),
P
rofi
tin
g f
rom
tra
de
in v
alu
e a
dd
ed.
Trade Transformation-
Global Value Chains.
XXth Century - Trade of final goods.
XXIst Century - More than 50% of world’s trade is inputs (2013).*
Section I - World Trade: A Chameleon
Smiling Curve
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Distribution
Marketing
Manufacture
Branding
Design
Concept, R&D
Sales/ After Service
So
urc
e: S
hih
, S
. (2
00
5).
Refo
rgin
g A
ce
r: C
rea
te, G
row
an
d C
ha
llen
ge
. B
eiji
ng: C
ITIC
Pu
blis
hin
g H
ou
se
.
Section I - World Trade: A Chameleon
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Increase participation
Greater value added to
exports
Democratization of trade (SME’s)
Expand local suppliers and
sourcing
Global Value Chains
Challenges
II. Chasing the Chameleon: Japan-Mexico Strategies
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II. Chasing the Chameleon: Japan-Mexico Strategies 1. Negotiation of the Japan-Mexico
Economic Partnership Agreement (EPA) (2005)
2. Deepening of the EPA (2012)
3. Trans-Pacific Partnership Agreement (TPP)
4. Pacific Alliance
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Section II - Chasing the Chameleon: Japan-Mexico Strategies
1. Negotiation of the Japan-Mexico Economic Partnership Agreement (EPA) (2005) • EPA – Mexico’s first and
only FTA with an Asian country.
• Bilateral trade in 2012: USD $22 billion (increase of 41% since enforcement of EPA).*
• Mistake: assessing trade agreements in terms of the trade balance.
12
Min
istr
y o
f E
co
no
my,
Off
ice
M
exic
o-J
ap
an
(2
01
3)
Mexico’s
$4 billion
$16 billion
Section II - Chasing the Chameleon: Japan-Mexico Strategies
Positive assessment of the Japan-Mexico EPA
13
Japanese investments in Mexico 2005-2013: USD $12.1 billion.*
Government procurement projects in Mexico: USD $4.3 billion.*
Main sectors: automotive and autoparts, electronics, metallurgic, machinery, food processing, high technology manufacturing, energy, logistics and transport services.
More than 90% of Mexico’s imports from Japan are intermediate and
capital goods.
Min
istr
y o
f E
co
no
my,
Off
ice
M
exic
o-J
ap
an
(2
01
3)
Section II - Chasing the Chameleon: Japan-Mexico Strategies
Positive assessment of the Japan-Mexico EPA
14
•**
Wo
rld
Tra
de
Org
aniz
atio
n, I
nte
rnat
ion
al T
rad
e St
atis
tics
(20
14
)
As a result, Mexico’s export position is:
Automotive** 4th place
Manufacture** 8th place
Electronic components** 6th place
• Mexico’s structural reforms- Japanese investments in a privileged position
• In case of conflict between Mexican laws and the EPA, the latter prevails. 15
Section II - Chasing the Chameleon: Japan-Mexico Strategies
Positive assessment of the Japan-Mexico EPA
Constitution
EPA
Constitutional and Federal laws
Section II - Chasing the Chameleon: Japan-Mexico Strategies
2. Deepening of the EPA (2012)
16
Improve market access in
agricultural and industrialized
goods.
Trade facilitation
Customs procedures
Agriculture -Increase quotas and reduce tariffs within them, e.g. bovine meat, orange juice, apples, green tea.
Industry -Accelerate tariff elimination and modification of rules of origin.
Investment:
Attract foreign investment in
energy, infrastructure,
technology, and clean
energy
Global Value Chains:
Further
integration of Mexican
enterprises into Japanese global value
chains in Mexico
Regulatory Cooperation:
Sanitary and
phytosanitary issues and technical
regulations and
standards
Section II -Chasing the Chameleon: Japan-Mexico Strategies
Pending Agenda of the Mexico-Japan EPA
17
Market Access:
Improve
opening of the
agricultural sector
Regulatory Cooperation:
Sanitary and
phytosanitary issues and technical
regulations and
standards
Market Access:
Improve opening of
the agricultural
sector
Section II -Chasing the Chameleon: Japan-Mexico Strategies
3. TPP– Too soon to make a call Can be WTO and RTA-plus
18
Improve market access of goods and
services trade
Further participation of SME’s in
international trade and investment
Regulatory convergence and
cooperation
Competitiveness and supply chains
Trade facilitation provisions
Rules of origin and cumulation of
origin
19
Sou
rce:
Pac
ific
Alli
ance
Web
Sit
e.
Section II – Chasing the Chameleon: Japan-Mexico Strategies
4. Pacific Alliance - Importance
6th global
economy in 2012;
expected to
become 4th in 2025
50% of
LAC trade in goods and services in
2013
2,7% of world’s
GDP
2.9% of world’s
trade
35% of
Latin America GDP in 2013
USD 2,123 billion GDP in 2012
Section II - Chasing the Chameleon: Japan-Mexico Strategies
Pacific Alliance - A Paradigm of Integration
20
Not a static agreement – it is an integration process
Harmonization and deepening of existing FTA’s as a pre-requisite
Goes beyond existing FTA’s, new generation disciplines
Private sector active participation
Given level of ambition has more than 30 international observers, Japan among them.
Section II - Chasing the Chameleon: Japan-Mexico Strategies
Pacific Alliance - Sectors of greater potential for integration
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Intermediate Goods
Machinery and mechanical appliances
Plastics
Paper and board
Consumption Goods
Textiles
Food
Perfumery and Cosmetics
How deep is their love? Of their trade only 3.6% is intra-regional. * Further integration as the challenge.
Sou
rce:
*SA
I, La
w &
Eco
no
mic
s/ W
orl
d In
tern
atio
nal
Tra
de
Stat
isti
cs 2
01
3
The
Eco
no
mis
t, M
arch
14
, 20
15
.
22
Section II– Chasing the Chameleon: Japan-Mexico Strategies
Pacific Alliance Business Council (CEAP) – An Initiative of the Private Sector Constituted by four Chapters, each established by a State Member and tasked with specific study areas, e.g.:
Chile: • Commerce in Services • Entrepreneurship • Financial integration
Colombia: • Education • SMEs
Mexico: • Technical barriers to trade • Regulatory coherence • Intellectual property
Peru: • Single window • Global value chains • Competitiveness
CEAP
Section III -The Japanese Role in the Latin American Economic Integration
Japanese Support Institutions
23
Japan trade promotion.
Economic cooperation for economic and social development.
Conducts lending, investment and guarantee operations for the private sector complementing economic development.
Japan International Cooperation Agency
Japan Bank for International Cooperation
III. Final Remarks
• Mexico has benefited from Japanese creative thinking based on its ancient values and tradition:
• Minimalism: the Japanese excel at the miniaturization techniques for making smaller and lighter products.
• Adaptation: Japanese manufactures excel at applied technology, adapting or redefining technologies to meet particular needs.
• Simplification: the impulse to remove all excess and to show only the essence.
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Section III - Final Remarks
Referring to what is essential, Octavio Paz once remarked:
“I learned precision of language from Japanese poetry, in which there is no waste of words”.
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Your companies and government have taught us not to waste resources or time, to focus on the essence, to be strategic, to produce with quality and innovation according to the rhythms imposed by societies that are each day more demanding and well-informed.
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Beatriz Leycegui [email protected]
Edificio Plaza Reforma Prol. Paseo de la Reforma #600-010-B Santa Fe Peña Blanca, México, D.F. 01210 Tel. (55) 5985 6618 Ext. 685 Fax: (55) 5985 6628
www.sai.com.mx