Home|[in] focus|South Africa and Mexico: Que Pasa?
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by Institute for Global Dialogue

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Categories: [in] focus

by Institute for Global Dialogue

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Wayne Jumat

The features that have characterised both states in the Global System of Actors are: the visibility of these states at the international level; their activity in their respective regions; and their regional economic roles. Both states also struggle with similar challenges such as unemployment, high crime rates, poverty, inequality, indigenous knowledge preservation, and the impact of global economic currents. Despite their categorical designation as “pivotal” states and their positions as regional engines of economic growth, these states could add more strategic value to this relationship. In this regard, the Bi-National Commission (BNC), established through the signing of the Memorandum of Understanding (MOU) for the establishment of a BNC in February 2009, is an important mechanism as it allows for constructive engagement and dialogue between states at both the bilateral and multilateral levels.

The inaugural session of the BNC (2010) underscored the significance of growing relations between the two states, particularly in matters of societal approximation which go beyond political and trade relations, and duly recognised and promoted the significance of people-to-people relations through the signing of a Cultural Cooperation Agreement (CCA) in 2005. Continuing on from the establishment of the BNC, in 2014 this relationship experienced another wave of formalisation with a flurry of agreements and legal instruments signed between the two states. The bilateral relationship between South Arica and Mexico could thus be described as advanced and multi-layered as the relationship has been formalised around issues of trade, finance, tourism, resource extradition, the environment, and academic and diplomatic cooperation.

Despite a strong trade relationship between the two states, South Africa experienced a growing trade deficit with Mexico during the period of 2010 to 2014. The deficit for South Africa amounted to R 1, 24 billion in 2010, and increased to R 3, 99 billion by the end of the fiscal year in 2014. It is therefore clear that more needs to be done to reduce this trade deficit and to embed South African goods and services in Mexico and the larger Central America.

South Africa should establish a new strategy in Central America whereby Mexico, as South Africa’s biggest trade partner in Central America, may be viewed as the northern entrance to Central American markets, as South Africa looks to expose the region and its consumers to South African products and services, thereby enlarging its consumer markets. By establishing Mexico at the centre of its Central American agenda, it will necessitate not only the consideration of the “Pact for Mexico” as part of the fundamental components that serves Mexico’s economic interests but would also have to consider the Trans Pacific Partnership (TPP) and North American Free Trade Agreement (NAFTA), as factors influencing this bilateral relationship and South Arica’s regional strategy.

While South Africa attempts to strengthen its relations with Mexico and Central America at both state and societal level, it needs to be aware of the regional dynamics and the limits of growth regarding trade, investment and political cooperation.

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