Mexico is the second-largest export market for U.S.-produced goods ($262 billion in 2016), as well as for goods produced in Wisconsin ($3 billion in 2016). In the first half of 2017, trends showed Mexican imports from the U.S. increasing by 17 percent over the same period the prior year (compared to an average increase of 5 percent for the U.S as a whole). Trade pathways between the U.S. and Mexico are well-traveled; a long history, geographic proximity and the North American Free Trade Agreement (NAFTA) also make Mexico a relatively easy market to enter for companies that are new to exporting. In addition, Mexico can serve as a gateway to other markets, since it has the highest number of free trade agreements of any country in Latin America.
In January 2018, the Wisconsin Economic Development Corporation (WEDC) will be leading a global trade venture to Mexico. Wisconsin companies, whether new to exporting or looking to expand their exports into Mexico, are invited to participate in this program. The cities included in the program, Guadalajara and Mexico City, are the two largest cities in Mexico. In each city, participants will be scheduled for one-on-one meetings with potential partners in the market. These partners are hand-picked for each participating company.
Each participant in the global trade venture will also receive a Mexico market assessment specific to his or her company, detailing considerations they should keep in mind when introducing their product or service into the market. WEDC has eyes and ears on the ground in Mexico, in the form of Wisconsin’s authorized trade representatives—thus making it easier for Wisconsin companies to find local partners they can trust, and taking some of the guesswork out of launching in a new market. With all your appointments arranged for you, you can focus on business rather than logistics and scheduling.
With the impact of NAFTA over the last two-plus decades, Mexico has transformed from a commodities export market to a diversified manufacturing economy. Mexico has a robust supply chain with an interdependent relationship to the U.S. manufacturing sector, and Mexico’s ties to Wisconsin are stronger than ever. Leading export categories from Wisconsin to Mexico include industrial machinery, electrical machinery, vehicles and parts, plastics, and medical and scientific instruments. Therefore, Wisconsin companies from a broad range of sectors are encouraged to attend this trade venture. This trade venture is suitable for companies that do not have prior export experience. U.S. products are already well represented in the market, and are perceived to be a good value for the price.
Mexico imported $387 billion in goods from the U.S. in 2016—nearly half of Mexico’s total imports. The country’s appetite for consumer and industrial products presents a strong opportunity for Wisconsin manufacturers as well as exporters of business and engineering services. Wisconsin’s top categories of exports to Mexico already include industrial and electrical machinery; scientific and medical instruments; and plastics. Categories in which Mexico imports large quantities from the U.S.—but not yet from Wisconsin specifically—pose opportunities for Wisconsin exporters. These include: vehicles; furniture; edible vegetables; articles of steel, aluminum and copper; railway and tramway parts; essential oils; paper and pulp; tools; and organic chemicals.
Services in areas such as construction, engineering, manufacturing, environmental and water are in demand across Mexico. In addition, the Mexican government’s investments at the federal, state and municipal levels in developing and improving infrastructure—such as communication systems, highways, airports and water supply—create opportunities for Wisconsin companies. These infrastructure and building needs have become more acute due to destruction caused by the September 2017 earthquake.
Mexico City is the nation’s capital and also the largest city in Mexico, with more than 24 million people in the surrounding state— an area that is 14 percent of Wisconsin’s size with more than four times the population. The state is responsible for one-quarter of Mexico’s GDP and nearly 20 percent of its population. Major industries include manufacturing, automotive components, chemicals, agricultural equipment and aerospace. The metropolitan area is home to many corporations’ worldwide or regional headquarters, and is a key economic driver for the country.
Guadalajara, in the state of Jalisco on Mexico’s Pacific coast, has a population of 7.3 million in an area less than half the size of Wisconsin. Manufacturing, automotive and mining are key industries. Wisconsin has a sister state agreement with Jalisco, and the two states have a strong agricultural connection, especially with respect to dairy products, livestock genetics and animal feed. Additionally, Jalisco is described as the Silicon Valley of Mexico, with a critical mass of high-tech companies, data storage facilities, and electronics manufacturing.
According to the Woodrow Wilson Center’s Mexico Institute, for every dollar of goods the U.S. imports from Mexico, it is estimated that 40 cents comes from U.S.-made components, and nearly 5 million U.S. jobs depend on trade with Mexico. Many Wisconsin companies may already be exporting their products indirectly to Mexico without knowing it, if they are selling parts to factories in the southwestern U.S. whose products are then exported after assembly. By taking part in this global trade venture, companies can tap the existing demand for their products to forge new relationships that lead to growing export sales with new customers and sectors—and face-to-face interactions are especially key to closing deals in this market. In addition to learning about market conditions and meeting local partners, the trade venture offers companies the chance to learn from one another, as the group will include both experienced exporters and companies that are new to exporting.