Mexico Outlook

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Information about Mexico Outlook

Published on April 3, 2008

Author: Doride


Slide1:  Sharing More than Just a Border: U.S. Commercial Opportunities in Mexico Karen L. Zens Minister Counselor for Commercial Affairs U.S. Embassy – Mexico Asia Pacific Business Outlook Conference University of Southern California March 26-27, 2007 Los Angeles, CA 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… Slide3:  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% Mexico – A Snap Shot Slide4:  TOP U.S. TRADING PARTNERS in 2006 (Goods) Source: U.S. Bureau of Census Slide5:  U.S. Exports to Mexico Source: International Trade Administration, U.S. Department of Commerce. Slide6:  Foreign Direct Investment in Mexico Source: Secretariat of Economy, General Directorate of Foreign Investment. Slide7:  Foreign Direct Investment in Mexico by Country Source: Mexico’s Secretariat of Economy, General Directorate of Foreign Investment. Slide8:  Mexico’s 2006 Bilateral Trade Source: Mexico’s Secretariat of Economy. Slide9:  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 Slide10:  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 The Impact of NAFTA Slide11:  U.S. EXPORTS TO WESTERN HEMISPHERE EXCEEDING THOSE TO OTHER REGIONS 2006 Source: U.S. Bureau of Census Western Hemisphere: 43.8% Slide12:  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% The Future of NAFTA Slide13:  Beyond NAFTA: Security and Prosperity Partnership 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 Slide14:  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. Slide16:  Tijuana Monterrey Guadalajara Mexico City Mexico - A Large and Complex Market 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. Slide18:  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). 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 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 Slide20:  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 Slide21:  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 Slide23:  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 Slide24:  U.S. Share of Maquila Imports Source: Banco Mexicano de Comercio Exterior Slide25:  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 Slide30:  A Sus Ordenes! Let us Help You

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