China and Mexico sign “tequila pact” to boost bilateral trade

Chinese President Xi Jinping continued his first visit to Latin America and the Caribbean on Wednesday after signing a far-reaching bilateral trade agreement with Mexican President Enrique Pérez Nieto.

Called the “tequila pact” — because the distilled beverage is one of the major products Mexico will export to China as part of a $1-billion package — the accord is geared toward offsetting the trade imbalance between Beijing and Mexico City. Xi and Peña Nieto agreed to put aside their country’s past differences over trade issues.

According to Mexican statistics, Mexico exported about $5.7 billion in products to China last year while it imported $57 billion from the Asian giant.

At a news conference, Peña Nieto said he immediately touched on the need “to search for improved balance in trade.” He also promised Xi to resolve “in a friendly way” Mexico’s complaint lodged against China at the World Trade Organization (WTO) for unfair business practices in the textile sector. Mexico charges that China is selling its products under price while at the same time giving government subsidies to the industry.

Besides tequila, which is Mexico’s national beverage, Xi said that China has committed itself to purchasing more Mexican pork products.

The two nations agreed to create a joint working group of businessmen and government officials to seek out investment opportunities in both countries. Peña Nieto said that Mexico could also become a gateway for Chinese products to other Latin American nations, as well as the United States.

Xi explained to reporters that Beijing was interested in investing in Mexico’s energy and mining industries, as well as in infrastructure projects, and announced that in 2015 Mexico has agreed to host the first ever summit between Chinese and Latin American businessmen.

The two leaders didn’t give any precise figures on how much money they had pledged in investment or give a timetable as to when some of these accords will be put into place.

Peña Nieto and Xi, however, both stressed that they were willing to work to forge new relations and cooperate in international forums.

During the past two administrations of Vicente Fox and Felipe Calderón, relations between the two countries were affected by a political and economic differences mostly stemming from Mexico’s accusation of unfair trade practices. In 2009, the Mexican government criticized China’s decision to put into quarantine Mexican citizens for fear of the H1N1 flu virus. Calderón also angered Chinese officials when he met with the Dalai Lama in 2011; Beijing reacted by freezing pork imports.

Xi was expected to speak before the Mexican Congress later Wednesday and visit the ruins of Chichén Itza, in Yucatán, before leaving for the United States on Thursday.