Business Profile
Economy: The agricultural sector produces various staple crops including sorghum, wheat, maize, rice, beans and potatoes largely for domestic consumption; while coffee, sugar cane, fruit and vegetables are grown for export. The contribution made by agriculture (including fishing, which is a major employer in coastal areas) has declined since the 1980s, it now employs about 20 per cent of the workforce and accounts for five per cent of GDP.
Manufacturing has grown considerably during the last 20 years: the main products are vehicles, processed foods, iron and steel, chemicals and machinery. Many companies in this sector are located in so-called maquiladora plants, where semi-finished goods or raw materials from the southern USA are shipped across the border into Mexico, completed, and then (for the most part) returned to the USA. The purpose is to take advantage of lower wages and running costs, and the absence of major restrictions on the behaviour of corporations (such as environmental and health and safety regulations). NAFTA (see below) has also contributed substantially to the growth of this part of the Mexican economy.
Mexico has a large mining sector, producing a wide range of minerals including silver, bismuth, arsenic and antimony; there are also smaller deposits of sulphur, lead, zinc and cadmium. However, the largest single natural resource, and the source of much of Mexico’s revenue in recent years, is oil. Indirectly, it also led Mexico into serious financial difficulties as, on the basis of future oil receipts, it borrowed far more than it could afford – at one stage, Mexico owed over US$100 billion to various institutions around the world. In the service sector, tourism is the most important single industry, and once worth an estimated US$7 billion annually (much of the tourism trade came from North America and since 11 September 2001, there has been a sharp decline).
In 1993, Mexico signed the North American Free Trade Agreement (NAFTA) which created a free trade bloc among the USA, Canada and Mexico of a size to rival the EU in both population and economic output. Mexican trade with its fellow NAFTA members increased threefold, and accounts for 80 per cent of the total trade volume. As well as NAFTA, Mexico is a member of the Inter-American Development Bank, the Association for Latin American Integration (ALADI) and, most recently, the Asian-Pacific Economic Forum (APEC). While much of Mexico’s recent attention has been concentrated to the north, Mexico has not ignored economic relations with its southern neighbours, having concluded in the early 1990s a number of free-trade agreements with Colombia and Venezuela (The Group of Three) and with the Hispanic countries of Central America. Mexico has come through the 2001-02 recession reasonably well, sustaining two per cent annual growth throughout the period. This is expected to double in 2003, while the Government is unlikely to relax its tight control over fiscal policy and inflation. Outside the American continent, Japan, Germany and Spain are Mexico’s other important trading partners. The UK is the largest foreign investor in Mexico after the USA.
Business: English is widely spoken in business circles although it is preferable for the visitor to be able to speak Spanish. Letters written in Spanish should be replied to in Spanish. Business wear is formal. Mexicans attach much importance to courtesy and the use of titles. Prior appointments are necessary and if in doubt about a correct title it is advisable to use licenciado in place of señor. Best months for business visits are January to June and September to November. Avoid the two weeks before and after Christmas and Easter. Office hours: Vary considerably; usually Mon-Fri 0900-1400 and 1500-1800.
Commercial Information: The following organisation can offer advice: Confederacíon de Cámaras Nacionales de Comercio, Servicios y Turismo (CONCANACO), Third Floor, Balderas 144, Col. Centro, 06079 México DF (tel: (5) 709 1559; fax: (5) 709 1152).
Conferences/Conventions: The meetings, conventions, exhibitions and incentives planner’s kit issued by the Mexican Ministry of Tourism lists over 70 convention venues in Mexico City, Acapulco, Taxco, Morelia, Puerto Vallarta, Ixtapa, Guadalajara, Mazatlán, Cancún and Mérida. Taxco, Acapulco, Morelia and Cancún have dedicated centres, the largest of which, in Acapulco, can seat up to 8000 people.
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