United Mexican States (Mexico) is located in Central America and shares a long land border with the USA. It is the world’s 14th largest country geographically and the 15th largest economically. It is a relatively low wage economy as compared to the US. Mexico’s economic relations with Pakistan have been weak, with negligible trade flows between the two countries. Pakistan’s exports to Mexico in 2015 amounted to $99.7 million while imports from Mexico for the same year stood at $53 million.
This country profile is part of a series of studies undertaken on South/Central American countries by The Pakistan Business Council (PBC). This brief study aims to highlight the economy, trade and investment opportunities in Mexico. The Table below shows a brief comparison of Pakistan and Mexico.
|Population, total (Million)||123.74||125.39||127.02||181.19||185.04||188.92|
|GDP (current US$ Billion)||1,262||1,298||1,144||231||244||271|
|GDP growth (%)||1.36||2.25||2.47||4.40||4.68||4.71|
|GNI per capita (current US$)||1,228||1,265||1,233||247||258||272|
|FDI, net inflows (BoP, current US$ Billion)||46.90||26.95||32.06||1.33||1.87||0.98|
In 2015, the total exports of Mexico amounted to around $381 billion while its imports were $395 billion. Top Mexican exports in 2015 included vehicles, electrical equipment and machinery, and crude oil while petroleum products, parts and accessories of equipment and vehicles were the top imports. Due to NAFTA, USA is the largest trade partner of Mexico, with 81% of Mexico’s exports going to and 47% of its imports coming from the USA.
Pakistan’s top exports to Mexico consist of multiple textile products such as denim, woven cotton fabric and trousers and also medical instruments. On the other hand, electrical equipment and machineries, and some raw materials such as phosphoric acid, zinc and steel have been the top imports from Mexico.
Exports to Mexico by Pakistan have had a downward trend, at least in the last 5 years, however imports have been increasing over the years. The potential for trade that exists between the two countries is immense; Pakistan could have exported around $6 billion worth of products and imported more than $15 billion worth of products from Mexico in 2015.
In 2017 Mexico is ranked 47 out of 190 countries in the Doing Business index created by the World Bank. Cheap labor, easy access to raw materials and its 13 FTAs across three continents including NAFTA which provides easy access to the USA and Canada make it a lucrative destination for foreign investments. However with President Donald Trump assuming power in USA, and his strong stance against NAFTA, puts the future of the Mexican economy in jeopardy.
The Pakistan Business Council (PBC) is a private sector not-for-profit advocacy platform set up in 2005 by 14 (now 60) of Pakistan’s largest businesses. The PBC’s research-based advocacy supports measures which improve Pakistani industry’s regional and global competitiveness. More information about the PBC, its members, objectives, activities and a soft-copy of this report can be found on our website: www.pbc.org.pk