Business opportunities in Mexico
As the second largest economy in Latin America, but a higher GDP per capita than any of the BRIC countries, Mexico offers an abundance of possibilities, in many different sectors. The main language is Spanish, but English is widely used and understood. Mexico consists of a huge mix of cultures, with influences from Europe, the United States, combined with the old, rich cultural history dating back to the Aztecs and Mayans. While Mexico has a beautiful culture, nature and traditions, it also boasts powerful, global cities with different sector hubs. Currently, Mexico is the world’s 15th largest economy, though it is predicted that in a few years, it will be in the top 10.
Trade with Mexico
Mexico is the country with the most free trade agreements (FTA) in the world. Besides the FTA Mexico has with the European Union, they have 12 FTA’s with over 40 countries. In the uncertainty following the results of both the Brexit vote and the U.S. election, the Mexican and British governments have both been keen to stress that establishing a new Free Trade Agreement between the two nations is a top priority.
Opportunities in Mexico
With a population of over 120 million and a growing middle class, there is a huge market for British goods, about the same size as the whole of Western Europe.
Though mostly every sector offers great opportunities, these are the ones which are currently the most prosperous:
Oil and Gas
Mexico is a major oil exporter, though a great deal of their potential has not been realised due to the 75-year monopoly the state has had on oil and gas. The current energy reforms, where not only the market for oil and gas - but also for electricity - have been opened up to new players, already increasing oil production. As more private companies win bids for exploration and production, opportunities open up for suppliers into the sector.
Besides oil and gas, there has been an increasing interest in renewable energy in Mexico.
- The potential for wind energy is estimated at around 40 GW.
- The potential for hydroelectrical energy is estimated at 53,000 MW.
- Because of its ideal geographical location in the so-called ‘Sunbelt’, Mexico is seen as one of the most attractive countries for the development of photovoltaic projects, with a potential to generate 6,500,000 GW per year.
- Mexico has committed to source 35% of power from clean sources by 2024
The 1994 establishment of NAFTA opened Mexico up to an influx of American culture and goods as well as propelling Mexico’s manufacturing sector. Currently, more than a quarter of Mexico’s trade with the UK consists of manufactured goods. Unlike other countries in Latin America, Mexico’s manufacturing sector has had solid growth over the past years. This is not only due to NAFTA, but also because of low average labour costs, a skilled and youthful workforce and various fiscal incentives. The main subsectors within manufacturing are the automotive industry (Mexico is the leading exporter in Latin America, and 8th in the world), the aerospace industry and white goods.
However, there are many more interesting, steadily growing sectors in Mexico:
- They are the leading exporter of electronics in Latin America, with an average growth rate of nearly 7%.
- The food sector contributes heavily to current trade with the UK, and Mexico has a strong position worldwide in multiple food subsectors, including coffee, cacao powder, avocadoes and meat.
- The Mexican government has an ambitious national infrastructure plan with opportunities for private companies in large construction projects.
- Also metalworking, mining, tourism, Information Technologies, education and the pharmaceutical industry are sectors with a plethora of opportunities.
For more information about Mexico and more specifically the relationship between UK and Mexico, please visit our website: www.britishbusiness.mx. Also, if you require more information or advice about entering the Mexican market, please do not hesitate to contact firstname.lastname@example.org or the Norfolk Chamber International Team.
British Chamber Education Day in Mexico: 26th May
Mexican Petroleum Congress: 7th – 10th June
British Chamber Energy Day: 26th September