Five reasons to consider exporting to Mexico from the US

Do you have a product that you are currently only selling in the US?  Here are five good reasons you should consider exporting to Mexico.

1.  Proximity: 
If you are already selling to your neighbor to the north, why not sell to your neighbor to the south?  Mexico is a convenient export market for many reasons, but proximity is a big factor.  Shorter distances mean less money spent on freight and less time getting your goods from point A to point B.

2.  Mexico's love of foreign products:
Because Mexico has been exposed to products from the US for many years (more so after NAFTA went into effect), there is a perception of US goods being of high quality.  Use this perception to your advantage.

3.  Government assistance programs:
The US government has a number of programs for US exporters.  Contact the Department of Commerce for more information on BuyUSA and other export programs.  Also, look into your local Chambers of Commerce or Trade Associations to see if they have any matchmaking missions or free courses on exporting. 


4.  Additional revenue streams
If your domestic sales are stagnant, why not look abroad to increase your sales?  Many people get overwhelmed by the thought of exporting, but forget about the upside.  If there is a need for your products in Mexico, the sky is the limit on potential revenues.

  
5.  Trade agreements
NAFTA allows most American products to enter into Mexico duty free.  What does that mean to you as an exporter?  It means that you are going to be more competitive when it comes to pricing.  If someone in another country is trying to sell the same product into Mexico, but their product has a 20% tariff, that automatically adds another layer to their pricing that you don't have to deal with. 

Mexico's Trade Agreements: Is Brazil Next??

As Mexico has started talking to Brazil about a possible trade agreement once again, I thought I would round up some interesting articles about Mexico trade that I've read recently.

Israel, Austria...Mexico? from The Economist

Mexico, Brazil Start Trade Negotiations from BusinessWeek

Texas Reaches a Milestone in Trade with Mexico from The Houston Chronicle

Cuba and Mexico Sign an Agreement to Boost Bilateral Trade from the Cuba News Agency

It's a very encouraging sign to see Mexico in talks with Brazil and Cuba for trade agreements.  Mexico is one of the countries with the most trade agreements in the world.  As Mexico becomes a bigger player in the international markets with its exports, it will certainly help to boost the Mexican economy and hopefully lead to more job creation. 

US allows Mexican shrimp exports in again

On March 1st, the US had placed a ban on imports of Mexican shrimp due to complaints that Mexican shrimpers were not respecting the sea turtles. 

As of last week, the US recertified Mexican wild shrimp for import into the US.  This is great news for Mexican shrimpers because the majority of their exports went to the United States.  Mexican shrimp exports will also help cover the shortage due to the Gulf oil spill.

According to FIS News (Fish Information & Services), "Mexican authorities designed and launched the Emerging Plan for the Proper Use of devices for the exclusion of sea turtles (TED) and the Work Programme 2010-2012, which will enable the country to have a regional model for the shrimp industry."

Mexico's trade deficit reaches $1.04 Billion USD

Interesting article in the WSJ regarding Mexico's trade deficit...

WSJ article - Mexico trade deficit

Mexico to impose tariffs on 99 US products

In retaliation over the trucking dispute, Mexico has decided to impose tariffs on 99 goods from the US.  The US was supposed to have proposed a solution to the trucking issue, which has banned Mexican trucks from crossing the border to deliver goods in the US.  According to the rules established by NAFTA in 1994, Mexico should be allowed to cross the border to deliver goods, but the US claims that Mexican trucks did not meet safety standards.  The pilot program that was to let Mexican trucks in the US, was cancelled by a provision in a bill passed by US Congress last year.

Some of the items that will be subject to tariff:

US Pork

Grapefruit

Pistachios

Cheese

Chewing Gum

Ketchup

The official list of goods will be posted in the next few days.  This is a huge blow to US manufacturers who export these items and the total financial impact could reach over $2.5 billion USD. 

Mexico and South Korea to restart Free Trade Agreement talks

Mexico and South Korea had initiated free trade agreement talks back in 2007, but the talks were put on hold in 2008 because Mexico was worried about a possible trade imbalance.  Felipe Calderon and

South Korean President Lee Myung-bak visited Mexico earlier this month to discuss a number of issues, trade being one of them.

A free trade agreement between South Korea and Mexico would be a huge boost for trade between the two countries.  Many people are unaware that South Korea is actually Mexico's 6th largest trading partner.  Trade between Mexico and Korea has tripled since 2001, and reached $11.4 billion in 2009.

Many Mexican business owners opose a free trade agreement with South Korea because they say more analysis needs to be done to examine how the agreement will negatively impact Mexican businesses.
South Korea hopes to have some kind of agreement by the end of the year, but it remains to be seen whether both countries will make a decision by then.

Mexico has its eye on Russia

Mexico's SAGARPA (Secretary of Agriculture and Rural Development)  are currently participating in a trade mission to Moscow, Russia.  The purpose of the trade mission was to promote Mexican meat and produce in Russia, while Mexican buyers are looking at Russian minerals and wheat.  There are 38 small businesses from Mexico participating in the trade mission.

Mexico has a good history of trade relations with Russia.  Mexico is considered a "favored nation" in Russia, which means it enjoys discounts on trade tariffs of up to 25%.

A few trade facts about Russia:

• Russia is the world's 5th largest food importer
• Trade between Mexico and Russia grew 79% from 2000 to 2007
• Russia is part of the BRIC (Brazil-Russia-India-China) economic block
• Russia's main exports include: aluminium, steel, nickel, copper, helicopters and plastic
• Russia's main imports include: automobiles, machinery, televisions, medicine

US Exports up 16.7% in the First Quarter

Exports from the US were up 16.7% in the first quarter of 2010, which means the US is on track to double exports in 5 years as proposed by President Obama.

Data highlights include:


The Commerce Department's Bureau of Economic Analysis (BEA) last week announced that U.S. exports totaled $434 billion during the January-March period of 2010, up 16.7 percent from the same period of 2009.

The largest percentage increases occurred in Taiwan (80%), Korea (66.2%), Malaysia (49.2%) and China (46.6%)
 
*info from Export.gov
US Pork exports to Mexico exploded in the first quarter of 2010, valued at nearly $195 million.

The dollar value of pork exports to Mexico almost doubled from 2009.

“The growth we have achieved for U.S. pork in Mexico is just terrific,” said USMEF Chairman Jim Peterson, a rancher from Buffalo, Mont. “About this time last year, we were facing the A-H1N1 crisis and pork demand in Mexico looked like it might be in serious jeopardy. But we worked very hard to educate consumers and the trade there to keep the market open and maintain consumer confidence in our product. As a result, Mexico is now our leading volume market for U.S. pork. And now that prices are improving we’re seeing sustained buying at higher prices, which gives us impressive gains in export value.”  (from Pork News Source)

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Thanks for stopping by my blog! This blog is intended to be a compliation of everything having to do with entrepreneurship, international trade, and doing business in Mexico.