Mexico is the second-largest economy in Latin America and the 15th-largest in the world. A large, diversified economy with deep trade and investment relations with the U.S., it is also the second-largest export market for U.S.-produced goods ($265 billion in 2018), as well as for Wisconsin exports ($3.5 billion in 2018). Wisconsin exports to Mexico have more than doubled over the last 10 years, and they now account for 15% of all Wisconsin exports. Mexico’s purchases from Wisconsin surpass Wisconsin’s exports to China, Germany and the UK combined. Mexico continues to experience stable economic growth, and recent economic reforms have liberalized key sectors such as energy and telecommunications, creating market opportunities.
In February 2020, the Wisconsin Economic Development Corporation (WEDC) will be leading a global trade venture to Mexico. Wisconsin companies are invited to participate in this program, which will travel to Guadalajara, in the state of Jalisco, as well as the capital of Mexico City.
In each city, participants will be scheduled for one-on-one meetings with potential partners in the market. These partners are chosen specifically for each participating company. Each participant in the global trade venture will also receive a Mexico market assessment customized for 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 representative—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 or growing exports within the market. With all your appointments arranged for you, you can focus on business rather than logistics and scheduling. Traveling as part of a trade venture also provides the opportunity for peer-to-peer networking, allowing attendees to share experiences and make business connections.
As a large, trade-dependent economy with close geographic proximity to the U.S., Mexico is an ideal market for new-to-export companies as well as those seeking to further expand their business/distribution networks in country. Mexico should be a key component of an export growth strategy for Wisconsin companies of all kinds. In Mexico, Wisconsin companies will find a receptive market with many potential buyers for their products and services—especially if they offer innovations that solve problems for companies in their respective sectors.
Business in general, and international business in particular, is a relationship-based endeavor, and participating in a trade venture can help maintain, develop or solidify those relationships. 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.
While it is important to understand and appreciate Mexico’s cultural differences, in general the long and successful history of U.S. firms in Mexico suggests that Wisconsin companies will also find this market to be rewarding and attractive. Given Mexico’s large and diversified market, most U.S. products can be sold successfully in the market, and the renegotiation of the North American Free Trade Agreement (NAFTA) seeks to generate even more opportunities for U.S. companies. Close cultural, social and economic ties make Mexico a natural market to consider for first-time exporters as well as companies that seek to expand their exports. NAFTA has been in place for 25 years and has created a truly hemispheric supply chain that has become an essential fact of life for small businesses and major manufacturers alike. While the ratification of the newly negotiated U.S.-Mexico-Canada Agreement (USMCA) has not yet taken place, trade between the U.S. and Mexico is expected to remain strong regardless.
Guadalajara, in the state of Jalisco on Mexico’s Pacific coast, has a population of around 8 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. In addition, Jalisco is described as the Silicon Valley of Mexico, with a critical mass of high-tech companies, data storage facilities, and electronics manufacturing. Its economy accounts for about 7% of national GDP.
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% of Wisconsin’s size with more than four times the population. The state accounts for one-quarter of Mexico’s GDP and nearly 20% 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.
Particular strengths of Mexico’s diversified economy include high-tech industries, oil production, mineral exploitation, manufacturing and agriculture. Leading export categories from Wisconsin to Mexico include industrial machinery, electrical machinery, vehicles and parts, paper products, plastics, agricultural products, and medical and scientific instruments. With Mexico’s growing middle class, consumer products of all kinds are a major opportunity. U.S. products are already well represented (and thus well-known and trusted) in the market and are perceived to be of good quality and a good value for the price.
Since Mexico is one of the top export markets for U.S. companies across all sectors, Wisconsin companies from a broad range of sectors are encouraged to attend this trade venture. Companies do not need to have prior export experience in order to benefit from this trade venture; however, companies that apply to attend should view exporting as an integral part of their overall corporate growth strategy.