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Assignment 1

Doing bussiness in Europe

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38 views

Assignment 1

Doing bussiness in Europe

Uploaded by

fvallesc
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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14 de junio de 2024

Assignment 1
Lesson 1. Free-trade Agreements

FERNANDA SARAHI VALLES CAMPUSANO


nemak
To: Nemak CEO Armando Tamez
From: Fernanda Valles
Date: June 14, 2024
Subject: Opportunities in the EU Market for Mexican Automotive Suppliers

This memorandum addresses the current trade dynamics between Mexico and the
European Union (EU) in the automotive industry. Despite an established free-trade
agreement, Mexico continues to experience a trade deficit with the EU. This
document highlights key statistics, benefits under the current trade agreement, and
identifies potential opportunities for growth.
Current Trade Statistics
As of 2023, Mexico's automotive industry is robust, being the fourth-largest
producer of automotive parts globally, generating approximately USD 107 billion
annually. The EU is a significant trading partner for Mexico, with bilateral trade
having more than tripled since the initial agreement in 2000.
In 2023, Mexico's automotive exports reached around USD 3.07 billion, with the
EU being a primary market. However, imports from the EU, particularly in
machinery, appliances, and transport equipment, remain substantial.
Benefits under the Free-Trade Agreement
The EU-Mexico Economic Partnership, Political Coordination and Cooperation
Agreement (Global Agreement), updated in 2020, provides several benefits:
1. Tariff Elimination: Many tariffs on automotive parts and vehicles have been
eliminated, making Mexican exports more competitive in the EU market.
2. Regulatory Alignment: Streamlined regulations facilitate easier market
access for Mexican automotive products.
3. Investment Protections: Enhanced protections and guarantees for
Mexican investments in the EU and vice versa encourage bilateral
investments.
Opportunities for Mexican Businesses
1. Electrification and Innovation: With the EU's focus on sustainable and
electric vehicles, there is a growing demand for components related to EVs,
including batteries, electronic systems, and lightweight materials. Mexican
suppliers can capitalize on this by aligning with EU regulations and
standards.
To: Nemak CEO Armando Tamez
Page: 2
Date: June 14, 2024

2. Advanced Manufacturing Technologies: Investment in advanced


manufacturing technologies, such as automation and precision engineering,
can make Mexican suppliers more competitive. There is a particular demand
for high-precision parts and innovative manufacturing solutions.
3. Strengthening Supply Chains: Establishing closer ties with European
OEMs (Original Equipment Manufacturers) and Tier 1 suppliers can open
new business avenues. The proximity to the US market, coupled with
competitive manufacturing costs, makes Mexico an attractive partner for EU
businesses.

Six-Month Forecast
Over the next six months, the automotive trade between Mexico and the EU is
expected to see moderate growth. Factors contributing to this forecast include:
 Continued Demand for EV Components: As the EU pushes for greener
transportation solutions, the demand for EV-related components will likely
increase, providing opportunities for Mexican exporters who can meet these
needs.
 Regulatory Adjustments: Ongoing adjustments and implementations of the
updated trade agreement will further facilitate smoother trade flows and
reduce bureaucratic barriers, enhancing export capabilities.
 Economic Recovery: As both regions continue to recover from global
economic disruptions, trade volumes are expected to stabilize and grow
gradually.
To: Nemak CEO Armando Tamez
Page: 3
Date: June 14, 2024

Conclusion
The EU market presents significant opportunities for Mexican automotive suppliers,
particularly in the areas of EV components and advanced manufacturing
technologies. By leveraging the benefits of the free-trade agreement and focusing
on innovation and regulatory compliance, Mexican businesses can improve their
market position and reduce the trade deficit with the EU.
For detailed strategic planning and potential partnerships, further consultation with
trade experts and market analysis is recommended.

Fernanda S. Valles
Business Manager
[email protected]
Criteria Score

1
Auto industry statistics 30
.

2 Specific industry benefits according to the FTA 30


.

3
Memorandum addressing the CEO with your findings and forecast 40
.

Total 100

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