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Mexico Needs to Polish its Brand Image. Nearshoring Can Help

By Ari B. Saks - EY Mexico
Nearshoring Investment Services Coordinator, Geostrategic Business Group Mexico Leader, and Other Tax Associate Partner


Ari B. Saks By Ari B. Saks | Nearshoring Investment Services Coordinator, Geostrategic Business Group Mexico Leader, and Other Tax Associate Partner - Tue, 07/11/2023 - 11:00

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Mexico is the 14th-most prosperous country in the world. We are members of The Organization for Economic Cooperation and Development (OECD) and the Group of 20 (G20). Mexico has free trade agreements with all world regions, including the US, the European Union, and the Pacific Alliance countries. Also, Mexico is a leading exporter of minerals and agricultural products, such as avocados, tomatoes, and blueberries. Believe it or not, Germany is not the country with the highest beer exports: Mexico is the No. 1 beer exporter.

Mexico has made significant contributions to the world, including chocolate, chili peppers, and corn. As the most populous Spanish-speaking country, Mexico City is also the oldest in North America and boasts the most museums in the world, according to Frommers. Despite these accomplishments, Mexico faces challenges with its branding and its image abroad due to stereotypes and prejudices around social and political issues.

No country can ignore what the world thinks about it and its society. That is why when a country suffers a branding and image crisis, the country or its government must address it promptly, with resources, strategies in national and international media, professional lobbying, diplomacy, and intensive promotion.

A country brand represents a variety of factors, associations, or variables, including its tourist attractions, natural resources, history, culture, language, political and economic systems, social institutions, infrastructure, and its people. According to Prof. Simon  Anholt, a country brand represents how countries compete with each other effectively to create favorable perceptions about their government, culture, tourism, migration, trade, and investments.

Today, we cannot be denied that Mexico has insecurity, violence, corruption, inequality, and poverty challenges. However, what region, nation, or country in the world does not have the same challenges? The most industrialized economies in the world, such as the US and several other European countries, today have the same or even worse challenges than Mexico. This is a global set of circumstances that may result from an economic system that, although it has generated great well-being and development to reach our modern world, also has challenges.

There are many examples of Mexicans traveling abroad who, in one way or another, have felt a change in attitude about Mexico's branding image in recent years. Years ago, Mexicans were identified as friendly and high-spending tourists. This image is changing today, and we may want to avoid accepting, seeing, or saying it openly, but it is a reality we must take in. Admitting a problem is the first step to solving it.

Promoting the brand image or restoring the brand image of a country is a considerable challenge. Prof. Talcott Parsons classified the crisis that a country can suffer into three categories: the first is an immediate crisis, which is quick and happens without any warning; for example, natural disasters, such as an earthquake or a tsunami. The second is an emerging crisis that grows gradually but is temporary; for example, pandemics, such as COVID-19. Finally, a sustainable crisis that persists for a very long time and is ongoing, such as violence and the lack of governability. We may analyze these types of crises and consider the circumstances that may affect Mexico's branding image and take action immediately.

Stereotypes are closely associated with prejudices, which may reinforce through biased information or without context news that is spread globally. In the case of Mexico, this information may be related to violence, drug trafficking, or certain government policies.

Undoubtedly, we can all take action, helping to highlight a positive branding image of Mexico worldwide. Nearshoring is an excellent opportunity to reinforce Mexico's branding image and showcase the benefits of Mexico abroad. We can promote Mexico as an area of growth and opportunity. The Mexican economy will likely grow by 2.5% this year, resulting from private investments in manufacturing due to its strategic location and the USMCA.

Right now, Mexicans have the opportunity to agree and change their country's image abroad as what it is, that is, not only as a tourist power or for the vastness of the natural resources that Mexico possesses or because of its strong agribusiness but, rather, promoting a Mexico and positioning it as a country that in recent decades has transformed from being an assembler of cheap products  to a manufacturing country of products with a higher degree of technological content.

Mexico is a country with a wealth of potential for foreign investment, particularly given its strong track record in manufacturing. Experts in this field agree that the current geopolitical climate presents an opportunity to showcase Mexico's impressive credentials. As it stands, almost 90% of the country's exports are manufactured goods. Data from the National Industry of Autoparts reveals that Mexico is the world's fourth-largest producer of auto parts, the seventh-largest producer of light vehicles, and the fifth-largest car exporter. Additionally, Mexico holds the distinction of being the fourth-largest producer of heavy vehicles and the leading exporter of trucks globally. Furthermore, Mexico is a leading exporter of computers to the US and among the top exporters of flat-screen TVs. In the aerospace industry, the country holds the 12th position in the ranking of component exporters to the US.

Mexicans should strive to discuss the talents of its people and the changes in society and technology on a daily basis, both in the media and among ourselves. They should also showcase the beauty and cleanliness of most Mexican cities and the advantages of being part of the working middle class. Additionally, Mexicans should highlight the positive experiences of expatriates and executives who work in Mexico from various parts of the world, sharing their success stories and how they quickly adapt to local and business cultures.

Everybody should share and spread positive news about the frequent and significant investments arriving to “nearshore” in Mexico. These investments create new job opportunities and benefits for workers and executives at all levels. Mexico is known for having responsible, productive, and efficient workers. And Mexico's manufacturing sector has one of the most favorable investment environments globally, which is why so many foreign companies are choosing Mexico as their new destination for operations.

In brief, we must highlight the factors that make Mexico's environment attractive to foreign investors locally and internationally. Let's spread the word about Mexico's strategic location, its status as the top producer of manufactured goods in Latin America (even surpassing all Latin American countries together, including Brazil), and its extensive free trade agreements with over 50 countries. We can also highlight that Mexico has investment protection agreements with 31 nations and has signed 61 double-taxation agreements. Moreover, our top-notch industrial park infrastructure is comparable to developed countries. Let's spread the word globally that Mexico is the place to be when it comes to nearshoring in the Americas.

Photo by:   Ari B. Saks

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