The travel dates of The Mexico Trip are fast approaching – and we are so eager to share more useful information to help you maximize this once-in-a-lifetime trip.
Amy, Norm, and Tim have covered quite a lot of facts in our webinar. So let us reiterate some of those with you today:
Did you know that Mexico’s trade industry is older than that of the United States?
Trade in Mexico started in the 1500s when they were colonized by Spain. It was, however, slower in progress. Despite the early start, Mexico’s manufacturing industry took a few centuries before more noticeable improvement – and today, Mexico is still miles away from China insofar as modernization of their facilities and business processes.
One major game changer was the implementation of the North American Free Trade Agreement or NAFTA in 1994 (now called the USMCA). Free trade encouraged big brands in the US and Canada to outsource their manufacturing to Mexico because of their more affordable resources – i.e. raw materials and manpower. One example is the North American automotive industry. Major car companies such as Ford, Chrysler, GM, Toyota, and others have established and continue to build facilities in Tijuana, San Luis Potosi, Guanajuato, and other regions.
Another foreign investor incentive program called IMMEX was established in 2006 to encourage more growth in the Mexican export industry. The program awards foreign companies a VAT exemption on some goods under specific terms and conditions.
Although the IMMEX and the USMCA were successful in inviting large foreign investors to set up shop in Mexico – it wasn’t easily noticed by smaller businesses, both Mexican and American. The Mexico Trip aims to educate both American entrepreneurs and Mexican suppliers and service providers about the wonderful benefits of these programs for North American companies.
If you examine the image above, you might arrive at this conclusion: Mexico’s potential as a sourcing location is there, but there is extra effort needed for it to be developed.
Take note: Mexico’s total land area is 1.973 million sq. km. About 50% of Mexico’s land or 1 million sq. km. are manufacturing zones, with each region specializing in specific product categories (like ceramics, textile, plastics, etc.). That’s a lot of goods – but most of them are only being sold locally. The truth is that most local Mexican manufacturers have not ventured into exporting their products because they lack the knowledge and resources.
In fact, Mexican manufacturers did not feel the need to export. They were satisfied with local trade – until covid happened. Like the rest of the world, Mexico’s economy was badly hit as a consequence of the pandemic. Numerous local businesses closed. Mexican suppliers needed to look for alternative sources of income – and that’s why exporting suddenly became an attractive option.
How to start? They didn’t know. Who do they approach? They have no idea.
That’s all going to change on The Mexico Trip because we are finally planting the seed – our first major initiative in giving Mexico a bigger role in the growing world of eCommerce. This is the seed of information that will spring connections between local Mexican manufactuers and entrepreneurs like you. The seed will need nurturing – that’s how you make it strong – and that’s what we plan to do in the coming years, starting with this trip.
Are you ready to be a pioneer? We can’t wait for you to join us. We hope you’ve already signed up and reserved your slot. If you haven’t – then sign up here.
Meanwhile – so many other topics to discuss. Stay tuned for the next blog!