Asian Journal of Latin American Studies (2016) Vol. 29 No. 2: 1-28 The Potential Impact of the Trans-Pacific Partnership on the Mexican Trade with China and Korea Jorge Eduardo Mendoza* 1 El Colegio de la Frontera Norte, Mexico Mendoza, Jorge E. (2016), “The Potential Impact of the Trans-Pacific Partnership on the Mexican Trade with China and Korea” ABSTRACT In 2015, Mexico became a member of the Trans-Pacific Partnership (TPP) agreement which includes twelve countries. The objective for the Mexican government was to have greater access to markets in Asia and to increase supply chains in the Asia-Pacific region. However, the exclusion of China and Korea, important trading partners of Mexico particularly in the telecommunications goods and inputs required for the production of Mexican manufacturing exports and the domestic market consumption, could bring about limitations for the Mexican diversification of trade. Additionally, the Mexican-Chinese trade has shown increasing intra-industry trade (IIT) in the automotive, electronics and mining industries. The rules of origin of the TPP will impose restrictions on input imports from non-members of the TPP such as China and Korea, and therefore, could potentially slow down the IIT between Mexico and those economies. As a result, there would be a high probability that Mexican imports from China and Korea could be substituted by imports from TPP members, possibly at a higher cost. The comparative analysis of the Mexican tariff structure indicates that the number of high value Mexican imports from China and Korea that are subject to tariffs is very significant. Therefore, it is likely that the establishment of the TPP could increase the competition for China and Korea, which already encompass an important share of the Mexican imports, potentially creating trade diversion. Additionally, the likely positive effects of the TPP are related to the size of the economies and possible trade expansion, which could be limited by the low GDP of several economies included in the TPP. Key Words: Trans-Pacific Partnership, preferential trade agreements, international trade, intra-industry trade, Mexican economy * Jorge Eduardo Mendoza is professor-researcher in the Department of Economic Studies at El Colegio de la Frontera Norte, Mexico (Email: emendoza@colef.mx).