MEXICO CITY — European plastics companies are waiting in line to jump into the Mexican market. The firms are spurred by hopes of a free-trade deal between the two regions and data that shows the Mexican industry has recovered from its economic recession that started with the peso devaluation in December 1994.
``Companies from the European Union are at a disadvantage,'' because of the North American Free Trade Agreement, said Victor Andres Maldonado, counselor for the European Union in Mexico. EU's share of Mexico's total trade has dropped from more than 15 percent in 1992 to only 6 percent in 1997.
The lion's share of Mexico's trade goes to its NAFTA partners — the United States and Canada — who in 1997 accounted for 87 percent of Mexico's exports and 76 percent of its imports.
An EU-Mexico free-trade agreement ``may be the most ambitious'' trade agreement to date, he added. Negotiations on the deal are scheduled to begin this October, and should last for at least a year, but not more than two, Maldonado said.
The plan is to eliminate plastics-related tariffs within five years, while more sensitive areas such as agriculture will take longer. That would put European firms on par with NAFTA companies as early as 2004. Currently, the average tariff for EU goods entering Mexico is 2 percent, Maldonado said.
Meantime, Mexico's market for plastics machinery is booming.
Machinery imports have increased 58 percent from 1996-97, according to the Asociaci¢n Naci¢nal de Industrias del Pl stico AC, or Anipac, a major Mexican plastics industry association.
Before NAFTA took effect, the local plastics industry was 25 years behind technologically, said Anipac Director Socorro Sedano. But between 1994 and 1997, ``the processors invested $1.63 billion in modern and competitive machinery, even during the 1995 crisis,'' she said.
From 1995-96, imports averaged $350 million annually. That started to increase in 1996, and hit $589 million in 1997.
Sedano presented the data to 145 companies from the European Union and Mexico in a June 8-9 forum promoting trade and business between the two regions.
Anipac estimates the Mexican plastics industry will keep on investing at a rate of about $600 million per year, while domestic consumption of plastics will grow by at least 9 percent annually.
Sponsors for the Mexico City seminar included the Mexican trade ministry, Secretaria de Industria y Fomento Industrial (Secofi) and the Mexican development bank Banco Nacional de Comercio Exterior S.N.C.
``We concentrated on three sectors of the plastics industry ... bottling and packaging, injection parts for the automotive and electronics industries, and agriculture,'' said Bancomext's Homero Torres, assistant manager in the plastics and chemical sector.
The seminar also included arranged meetings between 51 European and 94 Mexican firms.
Many EU companies admitted they were just checking Mexico out, or were already active in the NAFTA market.