Overview of best prospect sectors, major infrastructure projects, significant government procurements and business opportunities.
Taking into consideration the challenges above, many market opportunities for U.S. firms exist in Mexico. With the positive effects of USMCA, Mexico may provide better prospects than other countries.
Mexican companies, government agencies, and entire industries are deeply familiar with and receptive to U.S. products and services. U.S. producers often find it straightforward to market and sell their services and products in Mexico.
Mexico’s most promising sectors for U.S. exporters include agriculture; agribusiness; auto parts and services; aerospace; education services; energy; environmental technology; franchising; housing and construction; packaging equipment; plastics and resins; security and safety equipment and services; information technology; transportation infrastructure equipment and services; and travel and tourism services. However, given the size of the Mexican market, there is almost no product a company cannot sell successfully in Mexico with the right preparation, commitment, pricing, and service.
United States–Mexico–Canada Agreement (USMCA) Highlights
The USMCA improves market access for U.S. companies in several important ways.
Intellectual Property Rights (IPR). The agreement provides for strong, effective protection and enforcement of IP rights. Canada and Mexico agreed to strong enforcement provisions against counterfeiting and piracy, ensuring protection of trade secrets, and ex officio authority for law enforcement officials to stop suspected in-transit counterfeit goods.
Digital Trade. The agreement contains the strongest disciplines on digital trade of any international trade agreement, including rules to ensure that data can be transferred cross-border and minimizing limits on where data can be stored and processed.
Labor. A new chapter brings labor obligations into the core of the agreement and makes them fully enforceable. The agreement requires parties to adopt and maintain labor rights recognized by the International Labor Organization, an Annex on Worker Representation in Collective Bargaining in Mexico, and new provisions prohibiting importation of goods produced by forced labor as well as violence against workers exercising their labor rights. The USMCA also supports Mexico’s historic labor reform which creates a whole new labor justice system which will be phased in by states through May 1, 2022.
Environment. With the most comprehensive set of enforceable environmental obligations of any U.S. trade agreement, provisions will combat illegal trafficking in wildlife, timber, and fish. They will also enhance customs inspections, prohibit harmful fisheries subsidies, and combat illegal and unregulated fishing. Further, the agreement addresses environmental issues such as air quality and marine litter.
Automotive Manufacturing. Through updated automotive rules of origin, the agreement increases regional value content for passenger vehicle and light trucks from 62.5 percent to 75 percent, phased over three years after USMCA enters into force. This intends to stimulate more North American auto production. The agreement encourages higher automotive manufacturing wages by requiring 40–45 percent of automotive content be made by workers earning an average base-wage of at least USD 16 per hour.