CPTPP and Mexico
CPTPP is New Zealand’s first trade agreement with Mexico – our largest goods trading partner in Latin America and 21st-largest export market overall.
Mexico has a population of 130 million people. It is a world leading exporter of top quality products, with a thriving food processing sector, and is deeply integrated into North American supply chains. Opportunities for New Zealand organisations abound, from education and R&D to manufacturing, agricultural machinery and efficient field technologies.
Mexico has significant demographics of high income earners (8-9 million by one estimate) and medium income/aspirational consumers (15-25 million) with a high level of receptiveness to foreign goods and services, including high-quality food and beverage products.
As the most populous Spanish-speaking country in the world, Mexico represents an ideal point of entry for New Zealand businesses wanting to operate in other Latin American markets.
All tariffs on New Zealand exports into Mexico will be eliminated over time under CPTPP, with the exception of some dairy products where duty free access will still be achieved under quotas. There will be an estimated NZ$3.1 million in annual tariff savings immediately, rising to NZ$6.6 million once the tariff reductions are complete.
Some of the most important new market access opportunities are in the food and beverage sector and the food service sector.
You can search the online tariff finder (external link) to find the outcome for your particular export or import item.
For the first time under a trade agreement, New Zealand businesses will have commercial opportunities to win Mexican government procurement contracts. Mexico’s government procurement market is sizable and includes a diverse range of goods and services, which will provide greater opportunities for New Zealand’s established industries as well as more specialised and niche exporters. By and large, New Zealand businesses will be able to compete for government procurement contracts in Mexico on an equal footing with domestic suppliers and they will be subject to more open, fair and transparent procurement rules.
Mexico is the 10th most populous country in the world, including a large and growing middle class with an internationalist outlook and propensity to travel and study abroad. CPTPP offers an opportunity to boost New Zealand's profile as a destination for education and tourism at a time when Mexican government and industry are pushing to diversify Mexico’s international relationships.
In recent years, there has been growing business engagement with Mexico in areas such as animal breeding, horticulture and agri-business services. Under CPTPP, New Zealand service suppliers will have improved protection, predictability and transparency when doing business in the Mexican market.
For New Zealand, key outcomes from Mexico’s CPTPP commitments include the following:
- There is guaranteed ability for New Zealand lawyers to provide legal advice on New Zealand, international or third-party law, as well as arbitration and mediation services, on a fly-in, fly-out basis or electronically.
- Mexico has guaranteed market access for computer-related services, environmental services, engineers (including for integrated engineering services), urban planners and architects (including landscape architectural services), and ground-handling services. Access for service providers is however still subject to immigration requirements.
- Mexico has locked in its current energy sector regime. This gives New Zealand companies the opportunity to bid to participate in the exploration, production, processing and refinement of oil and gas and provide services mining-related consulting, research and development, engineering, environmental, mining and technical testing and analysis services.
- Mexico has also locked in current restrictions in the agricultural services sector around land ownership and the spraying of pesticides. This means that any reforms to these restrictions will flow through to New Zealand providers.
- For private primary, secondary and higher education services and language and special education and commercial training, Mexico has removed a 49% foreign investment cap included in its GATS schedule. However, it has retained authorisation requirements.
- The 49% foreign investment caps included in Mexico’s GATS schedule in relation to private hospital services, private services of clinical laboratories auxiliary to medical diagnosis, other private services auxiliary to medical treatment and dental prosthesis laboratory services have also been removed.
New Zealand businesspeople going to work in Mexico will benefit from CPTPP in the following ways:
- Business visitors are eligible to stay in Mexico for up to 180 days provided they are entering on a temporary basis
- Intra-corporate transferees who are executives, managers and specialists can enter Mexico for one year, which may be extended three times for further one-year periods
- Professionals and technician professionals from New Zealand can enter Mexico for one year, which may be extended three times for further one-year periods, where the person has a remunerated offer of employment.
There is a limited New Zealand investment presence in Mexico in comparison to some other Latin American markets.
CPTPP should help rectify this by bringing greater certainty and transparency for investors as well as to specific areas such as intellectual property and regulatory frameworks, while still preserving the rights of governments to legislate and regulate in the public interest. Strong rules will help ensure that New Zealand and Mexican investors are treated in a fair, equitable and non-discriminatory manner, allowing them to compete on an equal footing with other investors.
Mexico has removed a 49% cap on foreign investment in relation to private hospital services; private services of clinical laboratories auxiliary to medical diagnosis; other private services auxiliary to medical treatment and dental prosthesis laboratory services; private primary, secondary and higher education services; and language, special education and commercial training.
Investors in both countries will have access to an investor-state dispute settlement mechanism that is independent and transparent.
Tariff rate quota administration information (external link) (Spanish language only)