Since the implementation of NAFTA (North American Free Trade Agreement) in 1994, trade between Mexico, the United States, and Canada has tripled.
Mexico is considered the 12th largest economy in the world. Approximately 90% of Mexican trade is operating under free trade agreements with over 30 countries. Today, almost 90% of Mexican exports enter the United States and Canada and approximately 65% of its imports come from these two countries. (Statistics and details referenced from Wikipedia.com)
Mexico is one of the most trade friendly countries around the world. Listed here are some of the regions and countries engaged in free trade agreements with Mexico:
The European Union, Israel, Columbia, Venezuela, Bolivia, Costa Rica, Nicaragua, Chile, El Salvador, Guatemala, Honduras, Argentina, Brazil, Uruguay, Paraguay, Iceland, Liechtenstein, Norway, Switzerland, and Japan.
Mexico imports primarily from the USA and China. This offers excellent export opportunities for companies in the USA interested in locating new markets for food, beverage, textile, clothing, and other consumer durables products (automobiles, appliances, furniture, and electronics).
In 2000, the 31 states of Mexico represented the economic position of what China is today; a low-cost manufacturing capital for high-volume product production. Much like other countries, most of that manufacturing has now moved to China. The niche for Mexico today has changed to a center for manufacturing low to medium volume products with high complexity and size, such as medical equipment, network communications, and automotive/aviation components (data and statistics adapted from Wikipedia.com)
Mexico is not the lowest cost country for production (at least four times higher for labor than China). However, the offset in delivery wait time, lower shipping costs, and the ability for North American business people to speak with production facilities in the same time zone, is very favorable.
Benefits to trade with Mexico:
Mexico is actively developing and utilizing secured intellectual property laws to protect highly sophisticated projects outsourced for production in Mexico.
Working with Mexico presents fewer hidden costs (lower shipping costs, minimal inbound duty payments).
Delivery wait time is generally lower than China.
Many English speaking representatives exist on site or work in USA based subsidiaries (many Mexican products are warehoused in USA facilities).
Culturally, Mexicans are open and honest business people. However, much like the Chinese culture, Mexicans avoid directly saying "no". They often see the word as direct and pushy. More often than not, a "no" can mean "maybe" or "later". Keep this in mind when negotiating contract terms or requesting certain capabilities from suppliers and factories. (adapted from executiveplant.com, Mexican business etiquette).
Some of Mexico's highest commodity imports: computer accessories, passenger cars (new and used), semiconductors, engine parts, and plastics. (Compiled from the US census bureau trade division)
Some of Mexico's highest commodity exports: computers, apparel and household goods, passenger cars, video equipment, and wine & related products. (Compiled from the US census bureau trade division)
With Mexico's high tech capabilities, reasonably low labor rates, and its free trade status with over 30 countries, Mexico is an excellent partner to consider with respect to trade and outsourcing. The country is eager to engage in international business, is taking measures to increase and enforce its intellectual property protection, and willing to accommodate your international trade and manufacturing outsourcing needs. Mexico can help your business achieve good outsourcing results by increasing your profit margins with lower hidden costs, minimal duty charges, and shorter product delivery times. Consider Mexico for your next international project.
International Trade With Mexico - One Of The Most Trade Friendly Countries In The World Check For The New Release in Health, Fitness & Dieting Category of Books NOW!
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Michelle Bonn is the owner of Expedient Trade, LLC, an international sourcing and manufacturing service company, based in Buffalo, NY. For questions about this article or other international business information, contact Expedient Trade by visiting their website at http://www.expedienttrade.com
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