A ROBUST AND VARIED TRADE RELATIONSHIP
Mexico is the second-largest economy in Latin America and the 14th-largest in the world; its GDP growth in recent years has been strong due to trends including “nearshoring” manufacturing operations within North America. 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 ($324 billion in 2022), as well as for Wisconsin exports (which reached an all-time high of $3.6 billion in 2022). Although the U.S. imports more from Mexico ($459 billion in 2022), many products assembled in Mexico are made from U.S. parts, so even imports from Mexico often benefit U.S. companies that originally produced the component parts. After rapid growth of 4.8% in 2021, Mexico’s economy is projected to continue with solid growth of around 2% for this year and next year, and the U.S.-Mexico-Canada (USMCA) trade agreement enacted in 2020 has opened new opportunities in Mexico for U.S. companies.
Wisconsin exports to Mexico have increased dramatically over the last decade, and they now account for approximately one-sixth of total Wisconsin exports. Export growth for the current year is also looking strong, with Wisconsin’s exports to Mexico increasing by 27% for the first six months of 2023 compared to the same period the year before. Within Wisconsin’s exports to Mexico, the electrical machinery category is growing even faster, with exports in this category up 48% for the first half of 2023 over the first half of 2022. Industrial machinery is the top category of Wisconsin exports to Mexico, with electrical machinery in second place and plastics and non-rail vehicles and parts also among the leading categories. Wisconsin’s imports from Mexico are also growing rapidly (up 42% in the first half of 2022 relative to prior year figures), indicating robust trade growth in both directions.
In early 2024, 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, which will travel to Mexico City, the largest city in Mexico, and to Monterrey, which is Mexico’s third-largest city by population (and second-largest in terms of its contribution to GDP) and has a high concentration of manufacturing facilities aligned with Wisconsin’s key industry sectors. This Global Trade Venture has been scheduled to align with Expo Manufactura. Taking place Jan. 30-Feb. 1 in Monterrey, this trade show for the metalworking and manufacturing industries is a prime opportunity for making connections and building business relationships.
In each city, participants will be scheduled for one-on-one meetings with potential partners in the market. These partners are chosen 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 Mexico market assessment specific to their 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 or growing exports within the market. With all your appointments arranged for you, you can focus on business rather than logistics and scheduling.
Mexico has established itself as a global leader in sectors such as automotive, aeronautics, and electronics. The agro-industrial sector has taken advantage of technology to increase both imports and exports. The Lopez Obrador administration has moved forward with priorities including investing in health care, infrastructure, and clean energy, as well as updating government procurement procedures in ways that make it easier for U.S. companies to participate. In addition, the United Nations ranks Mexico as the world’s sixth-best location for foreign direct investment.
Mexico City is one of the world’s largest cities, with 22 million people in the greater metropolitan area. A key economic driver for the country, the metropolitan area is home to many corporations’ worldwide or regional headquarters, and in particular is a hub for aerospace manufacturing. Wisconsin companies’ meetings in the area may take place in nearby cities, such as Puebla, Toluca, Queretaro, and Guanajuato.
Monterrey, in the state of Nuevo Leon in northeastern Mexico, has a population of 5.3 million in the greater metropolitan area. Major industries include aerospace, automotive, and home appliances. Northeastern Mexico is a major agricultural region and is also the location of many maquiladora facilities of U.S. manufacturers. Gone are the days of Mexico’s factories using outdated technology—instead, many of today’s factories have cutting-edge smart technologies that make use of sensors and automation to maximize efficiency. Thus, Wisconsin original equipment manufacturers (OEMs), as well as companies that provide engineering services, may find opportunities to help Mexican factories adopt the latest technology.
Companies across many industries can find opportunities in Mexico’s diversified economy, but firms in the following sectors are especially encouraged to participate:
- Clean energy
- Building and construction
- Medical devices, bioscience, health technology
- Food and beverage processing
- Industrial automation
- Information and communications technology
- Packaging equipment
- Tools and dies
- Metal stamping
- Plastics and resins
- Quality control equipment and services