Hugo Martínez, Minister of Foreign Affairs of El Salvador, comments on the historical ties and the developing relationship between El Salvador and Mexico.
Mexico is a partner nation of El Salvador and Central America. We have common roots in the Aztec earth. We share a language, ancient culture, music, beliefs, and geo-environmental characteristics that reflect a very close degree of kinship. However, this kinship has been expanding more in recent decades. Both Central America and Mexico are living with common opportunities and challenges, and from those we have seen the opportunity to establish coordinated policies to address issues such as migration, security, social welfare, cooperation, and economic and trade relations.
It is in this sense that the government of El Salvador’s President, Mauricio Funes, and the leaders of the rest of the region are working diligently to establish partnerships that strengthen our links. The most recent result of this has been the coordination between our countries for the establishment of an agreement that, without any doubt, will bring benefits to all its parties: the signing of a single Free Trade Agreement (FTA) between Mexico and the countries of Central America.
This agreement, signed in San Salvador on November 23, 2011, was the result of seven rounds of negotiations that took place for almost three years. It replaces the trade agreements that each of the Central American countries had separately with the Aztec nation. As I said at the time of signing, I’m sure that we all win with this agreement; not only are our commitments on trade renewed, but also the relations between our countries and their economic sectors are strengthened.
The approval of commercial procedures as a block will ultimately be a competitive advantage that will position us in a country that already registers nearly 113 million habitants, showing an undeniable potential for the placement of our products such as textiles, bottled drinks, fruit juice, cartons, plastics, and pharmaceuticals, among others. The FTA with Mexico is currently in the process of ratification by the various governments of the countries involved, and will inject more dynamism for trade and capital flows that converge between the newly associated countries. This will surely open the doors to promote more investment, businesses, and job creation. For reference on how the FTA will influence the trade relations between Mexico and Central America, observe the 400% growth in the trade exchange between the two territories between 1995 and 2010, from $832 million to more than $4.7 billion, which undoubtedly would have an upward projection with the agreement.
At the bilateral level, El Salvador exported $76.2 million in 2010 and $86.1 million in 2011 to Mexico, with good positioning in the Mexican market for El Salvador’s textiles, which comprised 43.2% of these exports.
By participating in this commercial endeavor, the Salvadoran government shows its confidence and high willingness to do business with Mexico, a partner country with which we will continue to foster the integration of productive chains and diversification of goods, trade, and services.
One of the benefits that motivates us to walk hand-in-hand with Mexico on this pathway is the generation of new jobs and the strengthening of SMEs, which are the human bases behind the signing of the document of free association.
On the other hand, we have also been able to work on other strategies to foster economic development in the region, from spaces such as the Dialogue and Consultation Mechanism of Tuxtla, established in 1991, and the Mesoamerica Project, a high-level political space integrated by Mexico, El Salvador, Belize, Guatemala, Honduras, Nicaragua, Costa Rica, Panama, Colombia, and the Dominican Republic.
From this forefront, the integrated countries are set to work on the execution of programs and projects that improve the quality of life of the habitants of Mesoamerica, such as the construction of a regional fiber-optic network of over 1,800 kilometers in length, which is slated to begin operation in late 2012. This will allow the reduction of tariffs for internet services and ICT in general.
By having this network, Mexico and Central America will ultimately be very attractive countries for establishing investment with competitive levels that are consistent with the global market.
These strong economic ties are part of a broader relationship that the government of the Salvadoran President promotes with the Aztec nation, which also includes efforts and support in areas such as security, consular protection, and humanitarian assistance to our emigrants, and many technical cooperation projects in various fields.
In analyzing these matches and alliances, we can say that Mexico is closer than ever, an appreciation beyond its geographical location. We recognize this country as a partner and a friend of El Salvador and Central America.
© The Business Year