ProChile Looks to Boost Mexico Market as Key Trade Destination

Q: What are Chile’s main exports to Mexico? 

A: Chilean exports have changed significantly over the past 25 years and the country is well-known as a powerhouse in copper exports. ProChile manages all exports except copper and lithium. From 1998, non-copper exports have grown over 20 times, from nearly US$85 million to over US$1.7 billion, a 13.8% annual growth rate. 

Products that have become major export drivers following the signing of the FTA between both countries include frozen chicken and turkey pieces, sawn pine wood, dried plums, salmon filets, cheeses, juice concentrates, fresh garlic, tomato pulp, preserved fruit jams, apple juice, medicines, and cellulose. These products are now an important part of Chile's offer to Mexico. Some products that were being exported before the 1998 FTA also grew in popularity, including fertilizers, wood panels, mixtures of preserved fruits, and wines. Chilean wines are well-known in Mexico and around the world. 

Q: How does the agency support the export of Chilean products to Mexico?

A: We showcase the diversity that Chile offers as a 360° provider of both products and services. We are exploring opportunities, particularly in such an important sector as wine, and expanding into new categories. We want to focus on promoting high-end Chilean wines so that Mexico becomes familiar with them.

In 2023, there was an opportunity to bring citrus fruits to Mexico. Chilean clementines and mandarins, for example, have been well received at Mexico City’s Central de Abastos. We also see opportunities in other sectors, such as technology. For example, Xepelin and other companies are entering various sectors, including fintech, logistics, and e-commerce. We aim to position Chile as a strong service provider. These unexplored sectors have great potential in Mexico as the country has strong internal consumption and links with the United States and Canada, creating opportunities for Chilean companies. Mexico is expected to grow thanks to nearshoring, opening up opportunities. We aim to showcase Chile’s different products in Mexico, moving away from the traditional offer. 

Q: How can Chile’s products and services complement Mexico’s manufacturing capabilities?

A: Mexico and Chile share similarities in some industries. To be a powerhouse in food and mining, Chile had to develop an important supplier network. Mexico is a mining country by nature, ranking in the global Top 10 for the mining industry for over 16 minerals, and there are several opportunities for supplying this industry. We see interesting opportunities for Chilean companies both in mining and agriculture. While it might seem like Chilean products are competing with Mexican goods, this is not completely true as we see ourselves as complementary suppliers. Chile can be a reliable alternative for sourcing certain products because Chilean products are widely recognized for their quality. Everything produced in Chile is geared toward exportation, a consequence of being a small country with only about 20 million people. Chile is a global leader in the manufacturing of over 26 products.

Q: What are the main concerns of Chilean companies when trying to venture into Mexico? 

A: The main concern is the business culture. In Chile, business interactions tend to be more direct and transactional, focusing on clear communication of volumes and prices. In contrast, Mexican business culture emphasizes building relationships, which can take time and require a more nuanced approach to making and maintaining relationships. Another concern is the Mexican market’s size. With a population of almost 130 million, it is the second-largest in Latin America after Brazil. This vast market can be intimidating for Chilean companies, leading to concerns about response times and the pace of business in Mexico.

There are two primary approaches for Chilean companies entering Mexico. The first is to export directly from Chile, which usually involves finding local partners or distributors to facilitate connections with Mexican buyers. The second approach is to establish a presence in Mexico, which requires a deeper commitment and investment but can lead to stronger relationships and a better understanding of the market. Despite the challenges, Chilean companies are optimistic about the opportunities Mexico offers. Many Chilean companies see Mexico as a gateway to other markets and, as a trade office, we help them address their concerns. 

Q: What strategic factors influence the location choices of ProChile's offices in Mexico?

A: Our goal is to diversify and be present where business centers and decision-making hubs are located. This primarily includes Mexico City and Guadalajara – the latter due to its focus on creative industries and its reputation as a hub for trade fairs. Our office in Guadalajara allows us to participate in various trade fairs and efficiently implement promotional activities. It also serves to cover the large industries in Jalisco and neighboring states. With our two offices in Mexico, we aim to strengthen our presence and build on existing relationships with local governments and businesses. ProChile is focusing on covering as many states as possible from its offices in Guadalajara and Mexico City. If resources allow it, Monterrey could be a strategic location to consider in the future.

Q: What are ProChile’s plans to grow trade between the two countries within the next six years?
A: Our goal is to elevate Mexico to become Chile's sixth-most important market – it now ranks seventh, or eighth if we consider copper separately. Our goal is to increase exports, a process facilitated by the FTA between our countries, which allows over 99% of products or services to enter Mexico with zero tariffs. The Pacific Alliance and the Trans-Pacific Partnership agreements also generate opportunities.

We believe that more companies can succeed in Mexico and we see potential for organic growth. In the coming years, we aim to expand our program to other states in Mexico to develop alliances and contacts, presenting new prospects or leads for Chilean companies. With significant investments arriving to various states in Mexico, there is a need for sustainable development in areas such as electricity and water management. We want Chile to be seen as a strategic partner for Mexico. 

Mexican trade is directed mainly to the United States and Canada, so we encourage Mexico to look southward and see Chile as a strategic partner, as we have been for the past 25 years and hope to be for another 25 years and more. There is a strong political, cultural, and commercial relationship between the countries, and we want to strengthen this bond. Chile is the top supplier of 19 products to Mexico. We aim to increase this number and continue being a strategic partner, as we want Chile to be seen not only as a bilateral market but also as a hub for operating in Latin America. All of Chile’s 16 regions are exporting products and services to Mexico. Each region offers unique products. Our goal is to ensure that these exports reach as many states in Mexico as possible.

Q: Who are ProChile’s main allies in promoting bilateral exchanges?

A: Mexico is a federal country, so we aim to work both with state and federal institutions to connect with importers and exporters. While our primary focus is trade from Chile to Mexico, we also assist counterparts looking to trade from Mexico to Chile. We always try to identify chambers of commerce and guilds with interesting companies, which helps us to organize activities that showcase opportunities for trade, investment, and partnerships with Chile. Our allies include chambers of commerce, guilds, and state governments. ProChile also works closely with the Chilean Embassy to identify opportunities for Chilean companies. 

Q: What initiatives is ProChile planning to launch to celebrate the 25th anniversary of trade relations with Mexico in 2023? 

A: We will host a three-day Latin America meeting in Guadalajara, starting on June 24, 2024, following the Mexican elections. The event will host representatives from Chile, Mexico, and other Latin American countries. On the first day, we will have business meetings with Mexican importers from the area representing about four or five sectors, including technology and forestry. On the second day, we will host visits to innovation centers and industrial parks in both Guadalajara and Mexico City. In Mexico City, we will host importers from Latin America and the rest of the sectors participating in the business meetings, which will include services and food industries. On the third day, there will be a plenary session with business meetings and a networking event.

We will later host events focusing on other sectors, including one for salmon and other seafood products in August and one for wine in September. We will bring Chilean companies interested in or already exporting to Mexico. The goal will be to showcase the different offers and added value of salmon in its various formats and production methods. Finally, we plan to host a Chilean innovation service summit in Mexico toward the end of the year, which will be one of the main activities in our roadmap.

 

ProChile, an agency within Chile’s Ministry of Foreign Affairs, is dedicated to the promotion of Chilean products. The institution has 16 regional directorates and 50 trade offices around the world.