With around 130 million inhabitants, Mexico represents the 15th economy on a global scale and 2nd in Latin America, behind only Brazil, with a GDP of $1,07 billion. As for foreign direct investment, the country is the 15th recipient in the world. Due to its geographical position, with kilometers of coastline on the Atlantic and Pacific oceans, Mexico is a country extremely devoted to commerce. And it is one of the most commercially open Latin American markets thanks to the numerous free trade agreements on a global scale. At the same time, it enjoys a political and macroeconomic stability that distinguishes it from other Latin American countries. The exchange rate with the local currency, the peso, has remained stable for several years and has not seen major fluctuations even during the most critical moments of the pandemic that began in 2020. The average age of 27-28 also makes the Mexican market promising and constantly growing, with a public debt of just over 50% of GDP.
From a cultural and historical point of view, Mexico is fully a Latin American country. On the other hand, due to its geographical position (it shares a 3000 km border with the USA, which is crossed every day by around 1 million people), Mexico is a North American market. And it is North American especially in the entrepreneurial culture and in the trade deal strategy. The country is in fact part of theUSMCA, which strengthens the commercial unity between Mexico, Canada and the USA. The latter represent the main commercial partner, with more than 75% of exports, followed by Canada, China and Germany. However, the dependence on the North American economy, the high crime rate and the high levels of poverty of the population are often discouraging factors for investing in this country. Furthermore, the geographical and cultural distance should not be underestimated. However, it is a promising market that offers many business opportunities, including for Italian companies.
Italy has had important trade relations with Mexico for years. It represents the second partner in the EU, after Germany, and Mexico represents the main market for Made in Italy in Latin America. More than 400 companies have decided to establish themselves locally, using the country as a gateway to the region. From 2020, after theagreement between the EU and Mexico, there has been an increase of almost 10% in trade with Italy and the opportunities are numerous. Made in Italy mainly exports agricultural machinery, but there is still ample room for growth in the consumer goods, agribusiness and automotive sectors.
In particular, with reference to the agricultural and agri-food sector, Mexico has a vast cultivated area and is one of the main producers in the world of corn and avocado, with a large production also of bananas, coconut, coffee, asparagus, red fruits. Furthermore, the production of organic products is on the rise, in response to the high demand of US consumers. Agricultural businesses are often family-run, well structured and looking for new technologies. Therefore, there are good opportunities in agricultural machinery and technologies. At the same time, there are many automotive companies that have decided to settle in the area, taking advantage of cheaper labor and using logistics as a base for exports to the rest of the continent. Mexico, on the other hand, is the fourth largest car exporter in the world after Germany, Japan and the USA.
Before starting a business in Mexico, even though there are free trade agreements, non-tariff barriers should not be underestimated, whether it is an export project or setting up a production branch. In particular, we refer to local regulations, labeling requirements, special certificates and licenses, but also to logistical problems and cultural differences. Finally, in Mexico, thanks also to the young average age, e-commerce and social media are widespread. Here then is that any economic actor who decides to strengthen its presence in the area cannot do without these tools.
