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Wednesday, June 20, 2012

Know How International Trade In Mexico Can Help You


From the time when the North American Free Trade Agreement or NAFTA was implemented in 1994, there was a resurgence of Mexico in the international trade. Trade between the country, Canada and the United States have become three folds.

Mexico is considered as the world's twelfth largest economy. Around 90% of trade in Mexico operates under agreements on free trade with more than 30 countries. Presently, approximately 90% of exports from Mexico enter Canada and the U.S and around 65% of its imports are sourced from the two countries.

Mexico in the international trade is amongst the friendliest nations for trading. Amongst the regions as well as countries with agreements on free trade with Mexico are the European Union, Columbia, Israel, Bolivia, Venezuela, Costa Rica, Chile, Nicaragua, Guatemala, El Salvador, Honduras, Brazil, Argentina, Paraguay, Uruguay, Liechtenstein, Iceland, Japan, Norway and Switzerland.

China and the U.S are the primar y sources of imports of Mexico. Mexico in the international trade provides first-fate opportunities for U.S companies that are interested in expanding into new location or tapping into new markets such as textile, food, beverage and clothing and even other durable products such as electronics, appliances, automobiles and furniture.
In 2000, 31 Mexican states corresponded to the economic arrangement parallel to that of China presently; high-volume production with low cost capital for manufacturing. Most of such manufacturing has however shifted to China. Mexico's niche at present transformed a manufacturing center for product of low to average volumes with high size and complexity. These include network communications, medical equipment as well as aviation or automotive components.

Mexico is not the country with the lowest production cost since it costs no less than four times more compared to Chinese labor. Nonetheless the counterbalance lies in shorter delivery time, cheaper shipping as well as the capacity for individuals of businesses in North America to communicate with facilities for production which are in a similar time zone, which is a lot more favorable.

Advantages of Mexico in the international trade include:

-Active development and implementation of laws on intellectual property to safeguard complicated ventures subcontracted for production in the country

-Lesser hidden costs. For example, cheaper shipping and minimal payments for inbound duty.

-Wait time for delivery is generally shorter compared to China

-A good number of representatives on site are English speaking or are employed in subsidiaries situated in the U.S. A good number of products from Mexico are warehoused in the U.S.

-Culture wise, Mexicans are sincere and open business individuals. Nevertheless they refrain from directly stating "no"-just like in Chinese culture. Usually, "no" could equate to "later" or "maybe." You need to put this into consideration when discussing contract terms or asking for particular capabilities from factories and suppliers.



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