National Business Review | Tuesday August 26 2008

New Zealand should exploit Mexico/US FTA

by Sarah McDonald

New Zealand companies should take advantage of Mexico’s free trade agreement with the United States and look at entering the lucrative US market via its neighbour, a visiting trade representative says.

A Mexican delegation is currently touring New Zealand to promote the trade relationship between the two countries.
Promexico chief executive Bruno Ferrari, who is heading the delegation, says Mexico is New Zealand’s biggest trading partner in Latin America but there is still plenty of room for improvement.

There is a lack of communication between the two countries, he says, and there needs to be more “success stories” to encourage a better business relationship.

The most widely-covered business development between New Zealand and Mexico in recent times was Fisher & Paykel Appliance’s move to relocate its manufacturing plant to Mexican city Reynosa.

When that decision was announced in April, Trade Minister Phil Goff pointed out the benefit for Fisher & Paykel of having duty free access into the US market.

Dr Ferrari echoed this argument, saying Mexico’s free trade agreement with the United States means it can act as a valuable base for operations for companies looking to enter the US market without paying tariffs.

So far the trade delegation has met with a range of companies including Wellington Drive Technologies; Fulton & Hogan; Scott Technologies and HortResearch.

Dr Ferrari says there is agricultural technology and techniques developed in New Zealand that Mexican companies are interested in, such as in avocado production: both countries grow avocadoes, but Mexico doesn’t currently produce avocado oil. This is something that it is keen to change, using New Zealand assistance.

The relationship between the two countries is currently based on New Zealand dairy products (making up 60 per cent of New Zealand’s exports to Mexico) and Mexican beverages like Corona.
New Zealand is Mexico’s 48th biggest trading partner, with two-way trade of $US543 million per year.

Promexico was established by the Mexican government a year ago to coordinate the country’s approach to its trade relationship development.

Promexico’s role, amongst other things. is to look for business investment opportunities for Mexican companies in offshore markets and encourage foreign investment in Mexico.