Your Bridge to Central America

Your Bridge to Central America

Why Mexico?

MEXICO HAS UNIQUE COMPARATIVE ADVANTAGES.

Geographical and Infrastructural Advantages:

• Mexico is one of the largest countries in the world; it has a unique strategic position by having direct access to Europe, Asia, Latin America and North America.

• The Mexico-US border consists of more than 3,000 kilometers with 52 international access points, while the coastline along the Pacific and Atlantic Oceans has 11,000 kilometers.

Trade Facilitation and Competitiveness:

• Mexico is reducing import tariffs from 13% to 5% from 2008 to 2013, and has also implemented programs for trade simplification through which products with zero tariffs will increase from 20% in 2008 to 63% in 2013. This reduction of duty rates will benefit products such as steel, shoes, fabrics, apparel, automotive and chemical.

• Mexico has a domestic market of more than 112 million people.

• Preferential access to the most important markets worldwide through one of the largest networks of commercial and free trade agreements (43 countries) makes a potential, accessible market with over one billion consumers, which represents two-thirds of the world imports and 64.9% of the world’s GDP.

Industrial Advantages:

• Mexico has become an important producer of goods with high added value worldwide, thanks to its skilled and competitive professionals.

• Mexico is the leading supplier of auto-parts and trucks in the United States: one out of every seven cars sold in the U.S. is made in Mexico.

• Mexico is the first destination for projects in the aerospace industry: there are more aerospace companies located in Mexico than elsewhere.

Mexico is the biggest producer of smart phones in the world and the second greatest exporter of television sets.

• Mexico is the fifth favourite country for mining investments in the world and the second largest silver producer.

• Mexico is the largest exporter of organic coffee, avocado, papaya, watermelon, melon and mango (one of the top producers). It is the second largest exporter of fresh tomatoes and the leading exporter of vegetables in the Americas.

• Mexico is the largest medical instrument and device supplier to the United States.

• IT and BPO services exports experienced an 18% growth, reaching 3.72 billion dollars in 2009, and it is estimated that they will increase by 12% in 2010, reaching 4.15 billion dollars.

• Every year more than 90,000 students graduate from engineering and technical programs, Mexico offers qualified professionals and skilled labour.

• Mexico has a young and highly qualified population, the population average is 26 years old.

• According to a study carried out by the consulting firm AlixPartners, Mexico is the country with the lowest costs for the manufacturing of industrial components among the main emerging economies (Brazil, China and India) since it possesses an attractive exchange rate against the dollar, relatively low transportation costs and a large number of Free Trade Agreements.

Financial and Investment Advantages:

• Mexico is an attractive destination for Foreign Direct Investment (FDI). The economic policies of the last few decades have been a determining factor in guaranteeing the sound and stable macroeconomic environment that persists in Mexico. Thanks to the certainty, security and support of its institutions, Mexico has developed a solid economic stability and structural changes that have increased its competitiveness as an investment destination.

• The country’s public finances are well-balanced, as are its banking and financial systems.

• Mexico shows external accounts with very moderate deficits and one of the lowest inflation rates among Latin America’s main economies.

• Likewise, the country has signed Agreements on the Reciprocal Promotion and Protection of Investments with 29 countries and signed Agreements to avoid Double Taxation with more than 40.

• As a result of the global crisis, the Mexican market contracted 35% in 2009; however, it has strongly recovered (29% during the 2st quarter in 2010).

• AT Kearney has ranked Mexico as the 8th most attractive destination for FDI, improving 11 positions between 2007 and 2010.

Transparency and Law Enforcement:

• Mexico has made important efforts to increase its productivity and to be more competitive on the international scenario. Its system of government has made it easier to endorse laws and mechanisms that guarantee the transparency and security of investments, as well as of industrial and private property.

• On June 12th 2003, Mexico approved the Federal Law on Transparency and Access to Public Government Information which, as part of the process of reform that the State is going through, its purpose is to strengthen the democratization of the country, as well as to establish a relationship based on the government’s accountability to society.

• As for NAFTA, it provides the appropriate legal framework and certainty for trade in the North America region through legal instruments such as patents, copyrights, and trademarks, and also includes provisions covering trade rules and dispute settlement.” Source 1

Source: Ministry of Economy and PROMEXICO. http://www.promexico.gob.mx/en_mx/promexico/Empresario_Extranjero