country pro file NAFTA Numbers Strategie links Market position Optimistic outlook Team work have heen in the past. This is strengthen- ing the industrial economy - and position- ing Mexico in international trade.' Trade policy has focused on hilateral trade agreements, turning Mexico into a kind of springboard to the US market. While the US is the leading foreign in- vestor in Mexico, there are a number of other countries whose investment ratio far exceeds its trade with Mexico. Looking to take advantage of NAFTA, Mexico has entered trade agreements with Chile, the European LInion, Israël and the northern tier countries of Central America. And currently, it's negotiating with Brazil and Singapore. 'These agreements are giving Mexico a strategie trade position,' says Shwedel. it's taking on the role as the bridge between the Old World and the North American market and the rest of the world.' The food industry is expected to further fuel economie growth, driven by the re bound in consumer spending and contin- ued export growth. 'The industry has un- dergone a process of consolidation,' explains Shwedel. 'We expect this to con tinue as companies reposition themselves in the domestic market and develop multi- market strategies. While growth in the food industry is promising, the market also suffers from poor agricultural perfor mance. Of the last 20 years, agricultural output lias lagged behiud population growth for 10 of those years,' Shwedel adds. 'But, commodity imports continue to grow, and Mexico is now a major importer of powered milk, grains and oilseeds. On average, imports are equal to about 15% of production.' In a market that is historically susceptible to changes in political administration, there's some cause for concern as Presi dent Zedillo and his administration step down. And, there is some potential risk coming from outside factors - a sudden drop in the US economy or a sharp fall in oil prices could dim Mexico's economie outlook. 'But,' says Barendrecht, 'the government's strong macroeconontic man agement, commitment to implementing structural changes and maintenance of a floating exchange rate has created confi- dence in Mexico. Right now, we are fo cusing on our core business in the food and agribusiness - there are ample oppor- tunities to move from a lending bank to a bank with a wider product range. Our F&A knowledge differentiates us from other banks in Mexico - and this is dri- ving opportunities in M&A and advisory. In general, things have really turned around - and we expect that they'll only get better.' From 1 January, 1994 Mexico, Canada and the US began implementing the North American Free Trade Agreement (NAFTA). Removing most barriers to trade and investment between the members states, it has helped position Mexico as the second largest trading partner to the US, and the fourrh largest to Canada. Between 1993 and 1999, US-Mexico trade skyrocketed by 150%, reaching over USD 200 billion at the end of last year. In the same period, Canada-Mexico trade doubled, amounting to USD 8.5 billion. Statistics released by the US Department of Commerce in January 2000 suggest even stronger rates of growth - in the first month of the year, US-Mexico trade totalled USD 17.4 billion, a 30% increase from January 1999, and almost 190% higher than in I 993. Of this amount, Mex ico bought almost 14% of US exports and Mexican products accounted for 1 1% of US imports. The picture of the food and agri sector tells a similar story: in 1993, the year before NAFTA went into effect, Mexico's F&A exports into the US were USD 2.7 billion. In 1999, exports had climbed to USD 4.8 billion, an in crease of 78.3%. During the same period, Mexico's F&A imports grew by 55% - climbing from USD 3.6 billion to USD 5.6 billion. Under NAFTA, all non-tariff barriers to agricultural trade between the US and Mexico were eliminated. Many tariffs were eliminated immediately, while others are gradually being phased out between 2000 and 2010. It's expected that all agricultural provisions will be im- plemented by 2008. -■*- Continued from page 5 It's clear that our team in Argentina has lots of work to do. While cautioned, they're optimistic about the improvements expected in the next 12 months. The volatility of the market has taught us to work flexibly and proactively,' says Abbenh uis. 'L.everaging our deep knowl edge in F&A and strong relationships with clients gives the bank a solid position in Argentina. In fact, no F&A transaction occurs in the market that we're not a part of.' The team is busy advising clients on strategy and M&A issues, and they're in- volved in a number of structured transac- tions with mitigation of country risk. Throughout the year, the office in Buenos Aires has put forth serious efforts and at- tention on monitoring credit risk - a cru- cial factor in the coming months. 'The dedicated and professional team in Buenos Aires brings together a blend of experience and knowledge,' says Abben- huis. 'We've worked together to overcome the obstacles of this volatile market - and we're ready and well-positioned to face the ehallenges of the future.'

Rabobank Bronnenarchief

blad 'What's news' (EN) | 2000 | | pagina 7