Making Mexico a trade focus

COAL producer Xstrata Coal Australia was this week awarded a $US75 million contract to supply almost 2.3 million tonnes of thermal coal to Mexico. Xstrata will supply the Mexican Federal Electricity Commission’s Petacalco Power Station from its NSW operations in the Hunter Valley and western coalfields.

It is the latest in a number of deals that have resulted in two-way trade between Australia and Mexico doubling in the past five years to stand at more than $1 billion a year.

On November 18 Trade Minister Mark Vaile signed an investment declaration with the Mexican Minister for Economy Dr Luis Ernesto Derbez, bringing to an end negotiations on an investment promotion and protection agreement between the two nations.

In July, a memorandum of understanding on mining was signed and a double taxation agreement sealed in September. The Government is now working on establishing cooperation in the energy and education markets. Last week the Government released a book, Doing Business In Mexico, to help traders to the Latin American country.

The Petacalco coal contract follows a recent decision by the Mexican Government to remove a 3 per cent tariff on commodities and rural products.

Australia’s coal exports reached a record $13.4 billion in 2001-02 – an increase of 24 per cent – according to the recently released Department of Foreign Affairs and Trade publication Composition of Trade, Australia 2001-02.

Australian northern cattle breeders have been hampered in their efforts to export produce to Mexico because of stringent requirements preventing live cattle shipments from northern ports. Currently, tropically adapted breeder and feeder cattle can only be exported to Mexico through southern Australian ports. The Government is trying to press Mexico to change the system and has put a proposal before the Mexican quarantine authority, SAGARPA, to allow the importation of all sheep and cattle without mandatory testing.

The proposal seeks agreement for the importation of livestock officially certified to have been held outside the possibly infected areas for a period of 60 days. According to the Department of Foreign Affairs and Trade Australian, live animal exports were worth $31 million in 2001-02.