Mexico, or the United Mexican States, is the second most populous country in Latin America with over 123 million people. A stable democracy, it has the second highest GDP in the region, after Brazil. Administratively, Mexico is a federation made up of 31 states. Its capital, Mexico City, is home to 20 million inhabitants.
As part of its overall economic liberalization program, Mexico has been lowering tariffs on a range of products since 2008 and was one of the few countries in the world to carry out substantial tariff reductions in the wake of the global financial crisis.
Mexico has bound all its tariff headings in the WTO, meaning the government has set tariff ceilings on all product categories. Mexico’s levels of binding range from 0 to 254%, but the actual tariffs imposed by the government are lower than the corresponding bound rate, except for a few rare cases.
Mexico also continues to deepen its network of preferential tariff agreements, although the unilateral tariff reduction process that it began in 2008 has to a certain extent narrowed the gap between its most-favored-nation tariffs offered through the WTO and preferential tariffs.
To date, Mexico has granted tariff preferences for imports from over 50 countries, most of which are covered by its free trade agreements. Its preferential tariffs vary depending on the trading partner and industrial sector.
Trade with the U.S. is perhaps unique in this regard. While average tariffs generally range from 0 to 2.6% under Mexico’s FTAs, preferential trade with the U.S. is entirely duty free. Textile and apparel goods manufactured in the U.S., for instance, enter Mexico duty free under NAFTA if they qualify under its rules.
Mexico’s tariffs on agricultural products tend to be markedly higher than those on other products. Sugars, animal, and dairy products have particularly high average tariff rates.
The WTO provides the following summary of Mexican tariff rates for broad product categories: