Elizabeth Morgan | Jamaica’s bid to increase business with Mexico

In July, a Jamaican trade and business mission went to Mexico, organised by the Ministry of Industry, Investment and Commerce. Minister Aubyn Hill stated that on this mission, Jamaica was seeking to partner with members of the Mexican Business Council for Foreign Trade (COMCE) to develop and expand markets in Mexico for Jamaican products and services, and to establish a Jamaican-Mexican Chamber of Commerce.

In my article of July 1, 2020, I looked at CARICOM’s trade with Latin America countries and whether trade barriers, including language, in those markets were insurmountable. It was good to see that Jamaica is continuing to explore market opportunities in Mexico.

Jamaica and Mexico established diplomatic relations in 1966. Mexico, really considered as being in North America, is a large country with a population of about 128 million people and a current gross domestic product (GDP) of US$1.47 trillion.

Jamaica and Mexico are members of several organisations, which include the United Nations, the Organization of American States, the Community of Latin American and Caribbean States, and the Association of Caribbean States.

There are also other regional bodies such as the Group of Latin American and Caribbean Exporters of Sugar (GEPLACEA) and the Organization for the Prohibition of Nuclear Weapons in Latin America and the Caribbean (OPANAL).

Jamaica and Mexico have signed several bilateral cooperation agreements. There is a Mexico-Jamaica Permanent Binational Commission aimed at promoting trade, investments and other relations. Its 10th meeting was concluded in July 2023.

Jamaica has diplomatic representation in Mexico City, with Julia Hyatt recently appointed as the new ambassador. Mexico also has resident diplomatic representation in Kingston.

PROMOTING TRADE

It was interesting to note that in December 1969, a trade mission from Mexico visited Jamaica with the purpose of stimulating trade. Jamaica, at this time, had a large trade deficit with Mexico.

In August 1974, another trade mission from Mexico visited Jamaica, aimed at further improving trade, exports and imports, between the two countries.

The Jamaica/Mexico Business Committee met in Mexico City in August 1978 with the focus still on trade. Discussions were not just about import and export of goods, but also about improving tourism. It may also be recalled that the San Jose Accord, involving both Mexico and Venezuela, came into effect in 1981, allowing for lower oil prices to countries in the Caribbean.

The North American Free Trade Agreement (NAFTA), signed in 1991, between the USA, Canada and Mexico, it may be recalled, had some negative impacts for Jamaica’s production and trade in textiles and clothing.

A WIDENING TRADE DEFICIT

So, trade and economic discussions with Mexico have been ongoing for many years. What has not happened is a significant increase in Jamaica’s exports to Mexico. The trade deficit has remained wide. The information available states that in 2022, Mexico exported US$126 million in goods to Jamaica, including molasses and manufactured goods, and imported US$5.32 million in goods from Jamaica. The deficit was thus US$120.68 million in Mexico’s favour.

The trade has been further declining since 2013, when Jamaica’s imports from Mexico were valued at US$272 million. From 2013, Jamaica’s exports of goods to Mexico peaked in 2019 at about US$10 million. Basically, there has been a continuing downward trend for Jamaica’s exports.

The available statistics are also showing that there is very little trade in services between Mexico and Jamaica, including in tourism. In 2018, Jamaica and Mexico signed a memorandum of understanding (MOU) to concretise a multi-destination marketing arrangement to create ease of travelling between destinations and increasing tourist arrivals.

A trade agreement does not exist between Mexico and CARICOM or even as a bilateral partial scope agreement between Jamaica and Mexico. Thus, trade would generally be under World Trade Organization (WTO) rules.

On investments, Mexican businesses have significant investments in Jamaica in the tourism sector, cement, and airports. There is no evidence of Jamaican investments in Mexico.

On transportation, in the 1960s and 1970s, Mexicana Airlines had direct flights to Jamaica. In later years, COPA Airlines had direct flights, it seems.

Jamaicans do not need a visa to enter Mexico. However, travel to Mexico by Jamaicans has become more complicated in the last few years, as Mexico has become a transit point for potential refugees and illegal migrants to the USA.

I hope an outcome from the July mission to Mexico will be the establishment of an active Jamaica/Mexico Chamber of Commerce.

- Elizabeth Morgan is a specialist in international trade policy and international politics. Email feedback to columns@gleanerjm.com