A Few Observations on Doing Business in MexicoBy Jorge Rave | Mon, 12/06/2021 - 10:49
Mexico is one of Canada’s Top 10 export destinations and its growing consumer class, favorable labor demographics and proximity to the US make it a rich source of opportunities for Canadian businesses. Mexico is Canada’s third-largest trading partner after the US and China, while Canada is Mexico’s seventh-largest global trading partner. To illustrate the importance of the relationship, in 2020, the bilateral trade in goods reached over CAD$35 billion (US$27 billion) and Canadian direct investment in Mexico surpassed the CAD$28 billion (US$22 billion) mark.
This is one of the reasons why Export Development Canada (EDC) recently organized a webinar on Doing Business in Mexico, where industry experts from the Trade Commissioner Service (TCS) and the Canadian Chamber of Commerce (Cancham) shared insights on the top considerations for Canadian exporters interested in entering the Mexican market. Our main goal was to help companies be prepared to take full advantage of the business opportunities this vibrant market offers.
One of the first points of discussion was around the services, knowledge and support the TCS, EDC and Cancham make available to Canadian investors and exporters, since our organizations have the common goal of helping Canadian entrepreneurs succeed in Mexico. The TCS highlighted that companies should be aware that they can approach the Canadian Embassy to communicate their plans, as part of its responsibility is to assist them and facilitate introductions to local contacts. Cancham has been committed to the development of the Canada-Mexico relationship for over 40 years and represents Canadian business interests in Mexico. Finally, EDC’s core offering is a set of financial solutions and knowledge products that give Canadian exporters of all sizes, their supply chains and their bankers the confidence to move forward with international sales.
In terms of business opportunities, there was broad consensus around emerging areas such as Internet of Things, artificial intelligence, cybersecurity, telecom and information technology (IT) services. Indeed, Mexico is home to some of the largest Information and Communication Technologies (ICT) firms in the region, which makes it a gateway to other key markets in Latin America. This is something I had mentioned earlier this year in my article, Navigating the Path to Industry 4.0 in Mexico. Our teams on the ground are also seeing a powerful trend toward automation and data exchange within manufacturing. There’s also the cleantech, agri-food and consumer goods sectors that are of strategic importance to the future economy of Mexico. EDC is particularly active in these sectors through our Business Connections Program, where some of the largest Mexican corporations are working with qualified Canadian suppliers for their strategic procurement needs.
Panelists were clear in stating that doing business in Mexico is not without its challenges. One aspect that has become increasingly important has to do with Mexico and Canada having very different business environments. In fact, when it comes to business etiquette, what’s acceptable in one country, may not be in another. Our experience has shown that to be successful in international trade, Canadian companies need to understand the culture, traditions and business habits of their clients and partners and adapt their communication and business strategies accordingly. To help you navigate the cultural differences, we published, Doing business in Mexico: 12 essential etiquette tips.
I want to conclude by reminding you that EDC and partners in Mexico have the knowledge, the industry contacts, the risk-mitigation solutions and the business connections to enable Canadian export and trade. If you’re a Canadian exporter interested in learning more about the Mexican market or getting insights on the local business landscape, here is a link to the on-demand version of the webinar.