Australia and Mexico Sign for Stronger Trade Relationship
Commonwealth of Australia
|Monday, August 29, 2005
Australian Industry Minister, Ian Macfarlane, and Mexican Secretary for the Economy, Fernando Canales, have signed a bilateral Investment Promotion and Protection Agreement (IPPA) in Mexico City.
“The IPPA covers treatment of foreign investment, undertakings on expropriation and compensation, and resolution of disputes and provides a framework to boost investment between Australia and Mexico.
“It will give investors in both countries greater clarity and confidence in the investment environment in which they are operating,” said Mr Macfarlane.
Two-way trade and investment flows between Australia and Mexico are currently modest. Mr Macfarlane was in Mexico leading a business delegation to promote trade and investment opportunities for Australian companies in mining and energy.
Australia continues to be a leading supplier of coal to Mexico’s Federal Electricity Commission (CFE). In June this year, Australia won a 3.36 million metric tonne coal supply contract worth $330 million (US$249 million), for CFE’s Petacalco plant. This represented the biggest export contract won by Australia in Mexico.
The signing of a Memorandum of Understanding on energy co-operation in January this year and the IPPA signed today will take the commercial relationship with Mexico to the next level.
“Energy opportunities in Mexico are set to transform the bilateral commercial relationship. The next step is formalising the relationship with a strategic energy partnership based on our ability to supply coal and liquefied natural gas and the potential for Australian miners to invest in Mexican projects,” said Mr Macfarlane.
Liquefied natural gas supply into the North American West Coast represents a huge economic opportunity for Australia.
Australian LNG suppliers are well placed to win potential contracts worth $50 billion over 20 years into Mexico and the west coast of the United States that may be able to start deliveries as early as 2009.
Shell has committed capacity from the Energia Costa Azul terminal in Baja California, in which it holds 50% of the capacity rights, to take its share of gas from the Gorgon LNG project and Chevron plans to source LNG from Gorgon for its proposed terminal offshore from Tijuana.
Kirsty Boazman 02 6277 7580 0412 171 444
© Commonwealth of Australia 2004. All Rights Reserved.