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Last Published: 10/17/2019

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The U.S. Commercial Service helps U.S. firms identify and navigate opportunities for selling products and services in Mexico. This section provides a market overview for doing business in one of the largest and most vibrant markets for U.S. products in the world.

There are four key reasons why U.S. companies should consider exporting to Mexico:

  1. Mexico is the 15th-largest economy in the world with further growth potential from its young population (median age 28).
  2. Given Mexico’s large, diversified market, most U.S. products and services have ample opportunities. The new U.S.–Mexico–Canada Agreement (USMCA, see below) seeks to generate even more opportunities for U.S. companies.
  3. Mexico generally enjoys stable economic growth, despite softening in 2019.
  4. Close cultural, social, and economic ties make Mexico a natural market to consider for first-time and expanding exporters.
Mexico’s USD 1.2 trillion economy is the second-largest economy in Latin America and the 15th-largest economy in the world. Mexico has a large, diversified economy that is linked to its deep trade and investment relations with the United States. Mexico is an upper-middle-income G-20 and OECD member with a per capita GDP of USD 9,807. Still, Mexico’s 2.5 percent average annual GDP growth rate since the signing of NAFTA in 1993 has been slower than most emerging markets, due in part to its high rates of labor informality (57 percent), poverty (43 percent), and declining oil production.

In 2018, Mexico was our third-largest trading partner (after Canada and China) and second-largest export market. Two-way trade in goods and services totaled USD 678 billion, and this trade directly and indirectly supports millions of U.S. jobs. The United States sold USD 265 billion of U.S. products to Mexico in 2018 and USD 34 billion in services, for a total of USD 299 billion in U.S. sales to Mexico. Mexico is the first or second-largest export destination for 27 U.S. states. Top U.S. product exports include electronics, vehicles, fuels, minerals, plastics, and machinery. Mexico is the second-largest agricultural export market for the United States, importing USD 19.5 billion in U.S. agricultural products, including corn, soybeans, dairy, pork and beef products in 2018.

Both countries have over USD 144 billion in bilateral, reciprocal foreign direct investment (FDI). Mexico is the 20th-largest investor in the United States, having invested a total stock of USD 37.2 billion at the end of 2018. U.S. affiliates of Mexican-owned firms, in such diverse sectors as food, communications, plastics, metals, auto components and business services, employed 79,900 American workers in 2017. Over the last 20 years our supply chains have become increasingly integrated.

In July 2018, Andrés Manuel López Obrador won the Mexican presidential election with the largest margin in decades. President Lopez Obrador took office on December 1, 2018 and has moved quickly to implement his ambitious agenda to reduce corruption and violence while boosting public investment and social program spending. His National Regeneration Movement party (Movimiento de Regeneración Nacional or MORENA) and its coalition partners hold 64 percent of seats in the lower house and 54 percent in the Senate. MORENA has majorities in 16 of 32 state congresses and is the largest block in five more. Public expectations remain high Lopez Obrador will use his mandate to address Mexico’s corruption, security, and economic challenges.

The North American Free Trade Agreement (NAFTA), signed by the United States, Canada, and Mexico (the Parties), entered into force on January 1, 1994. Under NAFTA, tariffs on nearly all goods were eliminated progressively, with all final duties and quantitative restrictions eliminated, as scheduled, by January 1, 2008.

The United States entered into negotiations with the Parties seeking to update and rebalance NAFTA in August 2017. The United States-Mexico-Canada Agreement (USMCA) was signed on November 30, 2018 and will replace NAFTA to better serve the interests of American workers, farmers, ranchers, and businesses. The USMCA modernizes and rebalances U.S. trade relations with Mexico and Canada to benefit American workers and businesses and reduces incentives to outsource by providing strong labor and environmental protections, innovative rules of origin, and revised investment provisions. The Agreement also brings labor and environment obligations into the core text of the agreement and makes them fully enforceable. The Agreement is a mutually beneficial win for North American farmers, ranchers, businesses, and workers. Once implemented, it will create more reciprocal trade with Mexico and Canada, support high-paying jobs for Americans, and help grow the U.S. economy.

The USMCA expands U.S. access in Canada for certain U.S. dairy, poultry, and egg products and, once implemented, will help reduce costs and facilitate trade via new commitments on customs inspections, automation, and the treatment of low-value goods. In addition to these achievements, the Agreement upgrades NAFTA in key areas. For example, the USMCA establishes the strongest and most advanced provisions on intellectual property and digital trade ever included in a trade agreement. Finally, the USMCA also includes several groundbreaking provisions to combat non-market practices—such as subsidies and currency manipulation—that have the potential to disadvantage U.S. workers and businesses. Mexico’s Senate ratified the USMCA on June 19, 2019. For more information, see our USMCA Highlights below and visit the Office of United States Trade Representative website (www.ustr.gov).

Mexico is a member of the World Trade Organization (WTO), Asia-Pacific Economic Cooperation (APEC), G-20, and Organization for Economic Cooperation and Development (OECD). Mexico has 13 FTAs covering 50 countries including the 11-country Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP, formerly known as the Trans-Pacific Partnership). For U.S. exporters, Mexico’s participation in these international agreements means that, in general, the Mexican market is one of the most open and competitive in the world. In terms of demographics, Mexico is the most populous Spanish speaking nation in the world. Seventy-nine percent of its inhabitants live in urban areas. Ten percent of the population is considered wealthy, and about 44 percent lives in poverty. The remaining 46 percent of the population is considered middle class. Mexico has a young population, with a median age of 28.




 

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.