How Mexico Can Empower SMEs to Expand Global Trade Beyond USMCA

Trade is one of the fundamental pillars of the economic development of societies. In essence, it is a process of exchange between two or more individuals whose needs and capabilities are complementary. One party has a need, understood as a real or perceived
lack that requires satisfaction, while the other has a product or service capable of meeting that need. The exchange is carried out through an element that represents value, with money being the most widely used means of payment.

However, trade goes beyond the simple act of buying and selling. Every exchange takes place within a physical or virtual space called a market, which is regulated by a set of laws, rules, and provisions that guarantee its proper functioning. Consequently, any product or service that seeks to participate in a market must comply with the legal, technical, and regulatory requirements established by the competent authority.

From this perspective, domestic trade can be understood as a complex network of exchanges involving producers, suppliers, distributors, consumers, and institutions, all operating within the same legal, tax, and administrative framework. This common environment facilitates transactions by sharing the same legislation, a uniform tax system, and the supervision of a single State.

The dynamics change significantly when the exchange takes place between companies or individuals belonging to different States. At that point, foreign trade emerges, an activity that introduces a considerable degree of complexity by involving two different legal, tax, and regulatory systems. Each country has its own legislation, trade policies, customs procedures, and technical requirements, which means that participants must
simultaneously comply with the regulations of both markets.

In essence, foreign trade follows the same principles that govern domestic trade: meeting needs through the exchange of goods and services. The difference is that this exchange must take place while respecting two independent regulatory frameworks, which increases the need for coordination, planning, and regulatory compliance. For international trade relations to be sustained over time, the existence of several complementary elements is
essential.

These include logistics infrastructure, transportation systems, efficient customs processes, supply chains, trade agreements, diplomatic relations, and, above all, the existence of markets with needs that can be met through competitive goods and services.

A representative example of this evolution is the trade relationship between Mexico and the United States. For decades, both countries have built one of the most dynamic trade networks in the world, supported by regional value chains in which thousands of companies participate in shared production processes. Thanks to this integration, many goods cross the border at different stages of production before becoming finished
products.

This close relationship has allowed Mexico and the United States to consolidate their positions as each other's main trading partners. Geographic proximity, production integration, the United States-Mexico-Canada Agreement (USMCA), and the trust developed by the private sector have supported the creation of complementary value networks that strengthen the competitiveness of both economies.

Nevertheless, the experience gained from this trade relationship also represents an opportunity to expand economic integration with other regions of the world.

In particular, Central America has characteristics that make it a strategic partner for Mexico, not only because of geographic proximity and historical ties, but also because of the possibility of building regional value chains capable of competing in international markets.

Therefore, by taking advantage of the synergy of capabilities acquired by companies in the USMCA market, we can transfer the knowledge and expertise of the large companies that have benefited the most from this market to domestic SMEs. In the same way that exportable supply was developed for the USMCA market, with the attributes and characteristics necessary and sufficient to enter the markets of the United States and Canada, we can consolidate an exportable supply for other markets, but this time including smaller companies in this important value.

We are certain that export logistics routes to the USMCA market have grown rapidly at double-digit rates; however, this has not been reflected in the growth of our country. To achieve this, we must involve smaller companies. As they grow as a result of foreign trade, they will contribute to positive growth in our country's domestic economy.

The task, then, is to transfer methodologies and create mechanisms so that smaller companies can effectively conduct foreign trade operations, become capable of doing so, have the competent and necessary personnel, gain access to tax and customs facilities that promote this activity, and, above all, find financing mechanisms that facilitate their participation in global trade.

I write this as if it were easy, but, until now, there has been no public policy that has transformed us into a broadly based foreign trade economy. Today, we are not starting from zero; we have the opportunity to put this into practice and, as a country, find ways for smaller companies to learn from the knowledge and experience of large companies in their complex task of trading in the USMCA market.

This is a great opportunity. If smaller companies renew their efforts to serve markets outside North America, finding specific niches in the European Union, with its recently renewed agreement and where practically more than 90% of goods could be exempt from duties, or in the markets of Central America and Latin America, which are no less interesting, we must understand that dollars in Central America are worth the same as
dollars in the United States.

For Asia, Mexico can also become a complement to value chains and an important supply network, strengthening them and, in this way, gaining access to the USMCA market. This would be beneficial for both Asia and Mexico.

And what about the markets of North Africa? There, in the same way, we could meet their needs through specific and competitive exportable supply. Today is a time when Mexico is presented with a great, unique, and strategic opportunity. Let us all take advantage of it: entrepreneurs, companies, governments, academics, and specialists, by developing actions that, based on supply and demand, generate as much exportable supply as possible and as necessary.

It is up to us to take advantage of this moment or, like many others, simply let it pass.

What do you think?