Sharing More than Just a Border: U.S. Commercial Opportunities in Mexico
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Sharing More than Just a Border: U.S. Commercial Opportunities in Mexico. Asia Pacific Business Outlook Conference University of Southern California March 26-27, 2007 Los Angeles, CA. Karen L. Zens Minister Counselor for Commercial Affairs U.S. Embassy – Mexico.

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Sharing More than Just a Border: U.S. Commercial Opportunities in Mexico

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Sharing more than just a border u s commercial opportunities in mexico

Sharing More than Just a Border: U.S. Commercial Opportunities in Mexico

Asia Pacific Business Outlook Conference

University of Southern California

March 26-27, 2007

Los Angeles, CA

Karen L. Zens

Minister Counselor for Commercial Affairs

U.S. Embassy – Mexico


Mexico just what your real estate agent told you

Mexico – Just What Your Real Estate Agent Told You…

  • NAFTA! Access to Goods/Services/Market in U.S.

  • Proximity to World’s Best Consumer Market.

  • Shared Culture: Western, Hispanic.

  • Large installed base of manufacturing in various sectors.

  • Perception of stronger legal protections (China, Russia..)

  • Seen as politically stable.

  • Macroeconomic stability.

    Location, Location, Location…


Sharing more than just a border u s commercial opportunities in mexico

Mexico – A Snap Shot

  • Pop: 104 million

  • GDP per capita: $8,135

  • Adj for Purchasing Power: $9,800

  • 74 percent urban

  • Under 20: 44 %

  • Wealthy/Upper Middle: 23%

  • Middle Class: 37%

  • Poor: 40%


Sharing more than just a border u s commercial opportunities in mexico

TOP U.S. TRADING PARTNERS in 2006 (Goods)

Source: U.S. Bureau of Census


Sharing more than just a border u s commercial opportunities in mexico

U.S. Exports to Mexico

Source: International Trade Administration, U.S. Department of Commerce.


Sharing more than just a border u s commercial opportunities in mexico

Foreign Direct Investment in Mexico

Source: Secretariat of Economy, General Directorate of Foreign Investment.


Sharing more than just a border u s commercial opportunities in mexico

Foreign Direct Investment in Mexico by Country

Source: Mexico’s Secretariat of Economy, General Directorate of Foreign Investment.


Sharing more than just a border u s commercial opportunities in mexico

Mexico’s 2006 Bilateral Trade

Source: Mexico’s Secretariat of Economy.


Sharing more than just a border u s commercial opportunities in mexico

Mexico:

Outlook for 2007

  • U.S. economy

  • GDP growth – 3.5% (4.8% in 2006)

  • Inflation –4.1% (4.05% in 2005)

  • Macroeconomic stability

  • Remittances, oil and tourism

  • New Calderon Administration: 2040 goal - 5th largest economy in the world

  • Economic reforms - Congressional split


Sharing more than just a border u s commercial opportunities in mexico

The Impact of NAFTA

  • Almost no tariffs on U.S. exports to Mexico

  • More than 85% of U.S. Goods enter duty-free

  • By 2008, 100% will enter duty-free

  • Elimination of Barriers

  • Institution of Dispute Resolution Process

  • U.S-Mexico trade increased 377%: from $88 billion to $332 billion in 2006


Sharing more than just a border u s commercial opportunities in mexico

U.S. EXPORTS TO WESTERN HEMISPHEREEXCEEDING THOSE TO OTHER REGIONS

2006

Western Hemisphere: 43.8%

Source: U.S. Bureau of Census


Sharing more than just a border u s commercial opportunities in mexico

The Future of NAFTA

  • Clearly not about cheap labor

  • It is about integration of the North American marketplace

  • It is about moving up the value-added chain

  • It is about maintaining and increasing competitiveness and productivity

  • Mexico, like the U.S., fears losing its manufacturing sector to other countries – why? Over the last 5 years:

    • China’s exports to the U.S. grew 300%

    • Mexico’s exports to the U.S. grew 30%


Sharing more than just a border u s commercial opportunities in mexico

Security and Prosperity Partnership of North America

Trilateral Initiative

Building on NAFTA

Security – Led by DHS

Prosperity – Led by Commerce

North American Competitiveness Council

Trilateral private sector representation

WWW.SPP.GOV

Beyond NAFTA:

Security and Prosperity Partnership


Sharing more than just a border u s commercial opportunities in mexico

SPP –Prosperity Working Groups

  • Manufactured Goods

  • Movement of Goods

  • Energy

  • Environment

  • E-Commerce and ICT

  • Financial Services

  • Business Facilitation

  • Food and Agriculture

  • Transportation

  • Health


U s commercial service mission

U.S. Commercial Service Mission

  • Agency of the U.S. Department of Commerce.

  • Helps small and medium size U.S. companies export goods and services.

  • Protects U.S. business interests abroad.

  • Network of 100+ offices in the U.S. and 160 worldwide.


Sharing more than just a border u s commercial opportunities in mexico

Mexico - A Large and Complex Market

Tijuana

Monterrey

Guadalajara

Mexico

City


Products services

Products & Services

Trade Counseling & Advocacy.

Qualified Appointments for U.S. Companies.

Partner Searches and Background Checks.

Market Research.

Single U.S. Company Promotions.

International Buyer Program (IBP) for Mexican Companies.

Trade Missions for U.S. Companies.

www.buyusa.gov/mexico/en


Sharing more than just a border u s commercial opportunities in mexico

CS Mexico Results

Oct 2005 – Sept 2006

We helped U.S. companies obtain 500 distinct export sales worth over $360 million in sales for American small and medium size firms

  • 160 days of appointments arranged for U.S. companies.

  • 103 trade events (trade missions, seminars, etc.).

  • 20 Mexican delegations to U.S. trade shows.

  • Interagency Representation:

  •  U.S. Export-Import Bank.

  • U.S. Trade Development Agency (TDA).

  • U.S. Overseas Private Investment Corporation (OPIC).


Upcoming trade events in mexico

Upcoming Trade Events in Mexico

  • Tijuana Border Program

    April 16-19

    Tijuana, B.C.

  • Expo Logistica 2007 - Customs and Logistics

    May 7-9

    Mexico City, Mexico

  • Aeroexpo Aviation Trade Show

    May 24 – 26

    Mexico City and Toluca, Mexico

  • World of Concrete Mexico

    June 19-21

    Mexico City, Mexico

  • Enviropro / Power Mex - Environmental and Energy Industries

    September 26-29

    Mexico City, Mexico


Sharing more than just a border u s commercial opportunities in mexico

The Market for U.S. Exporters:

Best Prospects

  • Automotive Parts and Supplies

  • Electronic components

  • Energy Sector

  • Airport & Ground Support Equipment

  • Travel & Tourism Services

  • Plastic Materials/Resins

  • Telecommunications Equipment


Sharing more than just a border u s commercial opportunities in mexico

More Best Prospects

  • Environmental Sector

  • Low-Income Housing & Rapid/Prefab Construction

  • Safety & Security Equipment/Services

  • Hotel & Restaurant Equipment

  • Intermodal Transportation Equipment

  • Education & Training Services


Manufacturing remains strong in mexico

Manufacturing Remains Strong in Mexico

  • Mexico’s Industrial GDP has grown over 5% last year .

  • In 2005, Industrial GDP reached $176 billion.

    • $87 billion was exported to the US .

    • $7 billion exported to other countries.

  • Leading manufacturing sectors: autos/ auto parts; computer hardware;electronic components; home appliances; tool,die and moldings;

  • Maquiladoras: U.S. and foreign firms


Sharing more than just a border u s commercial opportunities in mexico

The Manufacturing Sector

  • Imports $87 billion of machinery, componants and inputs annually

  • 56,000 companies in the U.S. supply this sector

  • Competition is strong but opportunities are great


Sharing more than just a border u s commercial opportunities in mexico

U.S. Share of

Maquila Imports

Source: Banco Mexicano de Comercio Exterior


Sharing more than just a border u s commercial opportunities in mexico

Asian Share of

Maquila Imports

Source: Banco Mexicano de Comercio Exterior


How do you sell to mexican manufacturers

How Do You Sell to Mexican Manufacturers?

  • Good local representation.

  • Knowing where purchasing decisions are made.

  • Identification of your customers – 1st or 2nd tier?

  • Finding out what your customers need.

  • Understanding what financial tools are at your disposal to offer financing.

  • Following up!


How we help us suppliers

How We Help US Suppliers

Goal: Increase US exports of goods/services to Mexican Manufacturers.

  • Identify key sectors and market trends through company visits, association partnerships (AMT, NAM, MIT, etc.), and market research.

  • Publicize opportunities to export to these companies through Trade Leads system.

  • Locate qualified reps and customers through our services.

  • Promote relevant trade shows like Expo Manufactura.

  • Give updates on our findings through teams, USEACs, electronic newsletters, and web/videoconferences.


Some tips on mexican business customs

Some Tips on Mexican Business Customs

  • Mexico has its own customs.

  • Importance of establishing personal relationships before business is done.

  • Breakfast, Lunch and Dinner!

  • Time is Flexible

  • Patience pays off

  • Physical contact: “un abrazo” – you can (air)kiss the ladies!


Business customs some hazards

Business Customs:Some Hazards

  • Indirectness - difficulty in saying “no”

  • Push for easy credit terms – be careful

  • Follow up quickly with your Mexican partner – there is lots of competition – not an “American preserve”

  • Use a qualified interpreter if needed

  • Keep in contact: visit, phone not just e-mail


Sharing more than just a border u s commercial opportunities in mexico

A Sus Ordenes!

Let us Help You


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