Mexico’s growing economy and trade agreements with the United States makes it an opportune trade destination for Utah companies.
Mexico serves as a strategic location for Utah companies looking to expand their operations and seeking an entrance into Latin American markets.
Since 2010, the Mexican economy has realized steady growth at a rate of two percent or greater to become the 15th largest economy. As its economy and population has grown over the past 20 years, total Mexican imports have increased fourfold—with the amount of Utah exports to Mexico reaching $854 million in 2015. Mexico’s sustained economic growth allows emerging Utah competitors to capture market shares, increase exports abroad and diversify their customer base.
For decades, Mexico has strived to establish a more open and prosperous business environment. Compared to most of Latin America, Mexico has a freer economy. Similarly, it is easier for a U.S. company to do business in Mexico than most other Latin American countries. Utah companies can benefit from these shared values held by both the Mexican and American markets.
In 2014 and 2016, the World Trade Center Utah partnered with the Governor’s Office of Economic Development to lead trade missions to Guadalajara, Mexico. Patrick Scott, the director of sales for Kaddas Enterprises, attended and noted that Mexico is an ideal export destination for their company.
“A growing middle class and urban development are driving incremental energy needs,” said Scott. “The Mexican people understand brand value, and products made in the U.S. carry with them a higher quality perspective.”
The United States’s long-time trade relationship with Mexico contributes to Utah companies succeeding in Mexican markets.
“We share not only a 2,000-mile border, but also a dynamic commercial relationship that generates more than $500 billion in trade of goods and services, and supports millions of jobs in both countries,” said Eduardo Arnal, the former Consul General from Mexico for the U.S. and the President and CEO of Arnal Consulting.
As the second and fourth largest export market for U.S. and Utah goods respectively, Mexico has proven itself to be a reliable market for American, and more specifically Utah-made, exports. This is largely due to the North American Free Trade Agreement (NAFTA), whose implementation eliminated tariffs and made it easier for American companies to access Mexican markets. Additionally, Mexico’s geographical proximity to Utah reduces logistical costs, which helps Utah companies that are in the early stages of expanding globally.
Scott recognized that since the United States merely accounts for five percent of the global population, Utah companies should capitalize on the other 95 percent of global business found in markets abroad—highlighting Mexico as a favorable starting location.
“Our neighbors to the South are spending more, traveling more and enjoying more out of life than ever before” said Scott. “NAFTA helps ease the burden of Mexico importing US goods; shared common borders and shipment destinations can be reached by truck within hours to just a few days, versus weeks on the water when exporting to most other countries.”
To better help Utah companies explore business opportunities in Mexico, WTC Utah has coordinated a trade mission to Mexico City and Tijuana that will be led by Governor Gary R. Herbert during the business week of Apr. 9-14, 2018. To learn more about Utah’s favorable trade relationship with Mexico or to register for the World Trade Center Utah’s 2018 trade mission to Mexico, visit http://wtcutah.com/trade-missions/.
The deadline to register for the trade mission is January 31, 2018.