Though exporting can be challenging, exporters and U.S. businesses looking to start exporting should not be deterred. One country that offers tremendous opportunity for U.S. business is Mexico.
Mexico has the second-largest economy in Latin America, and is the United States second-largest export market for U.S. made goods. This can be attributed to a lot of cooperation between Mexico and the United States, including the signing of the North America Free Trade Agreement (NAFTA) in 1994.
In fact, the Mexican and U.S. economies are so integrated that today it is estimated that 40% of the content of imports from Mexico are of U.S. origin —which means a lot of businesses are already successfully exporting to Mexico and have cleared the way for your business to do so as well.
Three Ways NAFTA Has Minimized Barriers to Trade
Since the introduction of NAFTA, the United States has worked to minimize the burden U.S. businesses large and small must undergo to sell and manufacture goods and services to Mexico. Three ways NAFTA has empowered U.S. businesses to compete more effectively in the Mexican marketplace are:
- Eliminating duties and quotas for goods and services traded between NAFTA countries that are produced in NAFTA countries,
- Recognizing the equivalence of standards for various industries-eliminating the need to redesign U.S. products for sale in Mexico and Canada
- Recognizing accreditation standards for certain service industries, allowing for U.S. service providers to more easily enter the Mexican marketplace.
Tools That Empower U.S. Businesses to Export
The U.S. Foreign and Commercial Service and the Export-Import Bank of the United States (EXIM) offer products and services to U.S. firms looking to do business in Mexico. The Commercial Service offers U.S. businesses trade counseling and market research to successfully enter the Mexican marketplace. Specifically, the Gold Key Matching Service sets your company up with pre-screened appointments prior to your arrival in Mexico, clearing your path to success. Meanwhile, the Commercial Service’s U.S. Export Assistance Centers offer customized market research for your product or researches whether your service fits in the Mexican marketplace.
Once a foreign customer is secured, EXIM can work with your company or your bank to ensure that your business doesn’t have to worry about financing your international sales. Two products that help U.S. businesses export are export credit insurance and working capital loan guarantees. Export credit insurance gives your business the confidence it needs to enter new markets, minimizing the risk of foreign buyer nonpayment. Working capital loan guarantees give your bank assurance of payment for loans made for export working capital so that your business doesn’t have to worry about obtaining the financing required to grow your international sales. Think that you are too small to be an exporter? EXIM’s products are specifically designed to benefit small businesses.
The Commercial Service and EXIM work with your business to give you the confidence you need to enter new markets and grow your U.S. business internationally. To learn more about U.S. export programs, specifically "Look South", visit business.usa.gov or export.gov.
Have immediate questions?
Reach out to your local U.S. Export Assistance Center to meet with a Commercial Service Officer, or request a consultation with an EXIM Trade Finance Specialist to get started today.