A ROBUST AND DIVERSE COMMERCIAL RELATIONSHIP
Mexico is the second largest economy in Latin America and the 16thth-largest in the world; Forecasts are for strong GDP growth of 5% for Mexico in 2021. A large, diversified economy with close trade and investment ties with the US, it is also the second largest export market for US-made goods ($290 billion in 2021). and for Wisconsin exports ($3.1 billion in 2021, almost back to the pre-pandemic 2019 peak of $3.3 billion). Although the US imports more from Mexico ($385 billion in 2021), many products assembled in Mexico are made from US parts, even imports from Mexico often benefit US companies that originally made the components. After a rapid growth of 4.8% in 2021, the Mexican economy is expected to continue with solid growth of around 2% this year and next, and the US-Mexico-Canada Trade Agreement (USMCA) that came into effect in 2020 has opened up new opportunities in Mexico for US companies.
Wisconsin exports to Mexico have increased dramatically over the past decade and now account for more than one-tenth of Wisconsin’s total exports. Export growth for the year to date also looks strong, with Wisconsin exports to Mexico up 16% in the first six months of 2022 compared to the same period last year. Within Wisconsin exports to Mexico, the industrial machinery category is growing even faster, with exports in this category increasing 21% in the first half of 2022 compared to the first half of 2021. This is the top category of Wisconsin exports to Mexico, with other leading categories such as electrical machinery, vehicles, and plastics. Specifically, pharmaceutical product exports from Wisconsin to Mexico saw astronomical growth of more than 2,000% in 2021. Wisconsin’s imports from Mexico are also growing rapidly (up 13% in the first half of 2022 from year-ago figures), indicating robust two-way trade growth. Although Wisconsin still imports more from Mexico than it exports to Mexico, the import and export figures for 2021 were nearly equal.
BUSINESS RELATIONSHIPS
In February 2023, the Wisconsin Economic Development Corporation (WEDC) will lead a Global Trade Venture to Mexico. Wisconsin companies, whether new to exporting or looking to expand their exports to Mexico, are invited to participate in this program, which will travel to Mexico City, the largest city in Mexico, and Monterrey, the third largest city in Mexico by population and second-largest in terms of its contribution to GDP and has a high concentration of manufacturing facilities targeting Wisconsin’s major industrial sectors.
In each city, attendees will be scheduled for one-on-one meetings with potential partners at the market. These partners are selected for each participating company based on the company’s needs, growth strategy and product or service offerings. Each participant in the Global Trade Venture will also receive a company-specific Mexico Market Assessment that outlines the considerations they should take into account when introducing their product or service to the market. WEDC has local eyes and ears in Mexico in the form of Wisconsin Authorized Sales Representatives – making it easier for Wisconsin businesses to find local partners they can trust and take a little guesswork out of launching into a new market or growing eliminates exports within the market. With all of your appointments arranged for you, you can focus on business instead of logistics and scheduling.
MEXICO OUTLOOK
Mexico has established itself as a world leader in sectors such as automotive, aerospace and electronics. The agro-industrial sector has harnessed the technology to increase both imports and exports. Lopez Obrador’s administration has set priorities including investing in healthcare, infrastructure and clean energy, and updating government procurement processes to make it easier for US companies to participate. In addition, the United Nations ranks Mexico as the sixth best location in the world for foreign direct investment.
With a population of 21 million, Mexico City is one of the largest cities in the world. The metropolitan area is a major economic engine for the country and is home to many global or regional corporate headquarters and is particularly a center for the aerospace industry. Company meetings in Wisconsin in the region can be held in nearby cities such as Puebla, Toluca, Queretaro and Guanajuato.
Monterrey in the state of Nuevo Leon in northeastern Mexico has a population of 4.5 million. Major industries include aerospace, automotive, and home appliances. Northeast Mexico is an important agricultural region and is also the location of many maquiladora Systems from US manufacturers. Gone are the days when Mexican factories used outdated technology—instead, many of today’s factories have state-of-the-art “smart” technology that uses sensors and automation to maximize efficiency. Therefore, original equipment manufacturers (OEMs) in Wisconsin, as well as companies that provide engineering services, could find opportunities to help Mexican factories adopt the latest technology.
This will be WEDC’s first personal Global Trade Venture in Mexico since 2020. Although virtual trade ventures took place in 2021 and 2022, personal connections are vital to doing business in Mexico because of the trust and personal connection that is built. Companies across many industries can find opportunities in Mexico’s diversified economy, but companies in the following sectors are particularly encouraged to participate:
- Agriculture
- automobile
- Clean energy
- Build and build
- Medical devices, life sciences, health technology
- Food and Beverage Processing
- Industrial automation
- Information and communicationtechnology
- packaging equipment
- tools and matrices
- metal stamping
- plastics and resins
- Quality control equipment and services
- security equipment and services
- Equipment and services for transport infrastructure
