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A president of Mexico many years ago lamented, "Poor Mexico. So far from God, so close to the United States." Some modern day Mexicans may still harbor similar sentiments, but many others are enjoying the fruits of an increasingly interdependent economy.
Economic growth in 2014 is expected to reach around 4 percent, a rate at which exporters should take note. The market is big—about 117 million people with a purchasing power parity of $19,260 and a GDP of $1.4 trillion. 10 percent of the population is considered wealthy and about 45 percent are in poverty earning less than $10 per day. The remaining 45 percent of the population is considered middle class. Mexico has a very young population with a median age of 27.
The U.S. and Mexico seem destined to remain joined at the hip. The U.S. takes 78 percent of Mexico's exports, while providing almost half of Mexico's imports. China provides almost 15 percent of Mexico’s imports. For data geeks and social media fans, Mexico is number 5 in the world in number of Facebook account holders. Mutual investing is also big, with one of Mexico’s billionaires recently buying an AT&T business for a midsize fortune.
Made in Mexico/U.S.A.
The U.S.-Mexico relationship is more robust than it appears because many goods that boast Made in Mexico labels consist of components made in the U.S. Bombardier commuter jets are designed in Canada, made of many components from the U.S., and assembled in Mexico for export. For U.S. companies outsourcing some of their production to Mexico comes at the expense of China, which surprisingly is losing some of its cost advantage when variables like shipping, labor, supply chains and quality are figured in. Some jobs previously done by Chinese workers are shifting to Mexico and the U.S. The “world’s factory” has competition.
Interconnected rails and roads, plus the North America Free Trade Agreement (NAFTA), have created an intercontinental supply chain that will be even more productive when the roads and customs crossings receive the upgrade that they’ve long needed. In 1993, the year NAFTA went into effect, bilateral trade was $88 billion. This year it will shoot well past the $500 billion mark, an increase of over 400 percent. Border dwellers in Southern California, which used to belong to Mexico, are making plans with amigos in Tiajuna to one day build a giant international airport on the Mexican side that would serve the entire region.
The drug trade and violent narco cartels are a painful blemish on otherwise steady progress in getting Mexico’s house in order. But the government has had some recent success in collaring criminals, and the murder and kidnapping rates are down. American businesspeople and tourists are traveling again without fear.
This will be a make or break year for President Enrique Penã Nieto and his campaign to change the constitution to allow private investment in oil, gas and electricity. These industries remain nationalized and inefficient, never mind that easy-to-pump oil is becoming a thing of the past and Mexico needs foreign investment and know-how to reach the remaining deposits.
Foreign energy companies will be watching, especially the secondary legislation that will spell out rules addressing the extent of their participation. Attempts to open these markets in the past have foundered, and the last time was in 1938. Nieto’s coalition in Congress may be stretched to the breaking point.
Negotiations are now underway for the Trans Pacific Partnership (TPP), with U.S. and Mexican participation. The U.S. and Mexico seek to boost U.S. and Mexican economic growth by increasing exports in a region that includes some of the world’s most robust economies and that represents more than 40 percent of global trade. The TPP presents an opportunity to go well beyond NAFTA. While quick passage seems iffy at best, the prime minister of Singapore, not a person prone to hyperbole, said during a visit to Washington, D.C. last week that he expects a deal to be done by the end of this year.
In May 2013, President Obama visited Mexico where he and Mexican President Nieto announced a new High Level Economic Dialogue (HLED). The HLED will help to further identify barriers to trade between our two countries, to reduce such barriers, and improve opportunities for both U.S. and Mexican companies in the two markets. One U.S. company was recently stung when it was charged thousands of dollars in duties for a piece of equipment that was shipped to replace one that failed. Normally, such replacements under warranty enter countries duty free because duty was already charged on a similar part when the item was first shipped. There is a way to avoid paying the duty but the shipper wasn’t familiar with it and a drawback wasn’t possible under Mexican rules.
Further harmonization will come, but Mexico is different than the U.S. in many ways, especially the legal system and it’s always wise to read up on the differences before doing business there. To get you started, here are a series of podcasts produced by the U.S. Embassy in Mexico. They cover 20 different sectors including auto parts, machine tools, agribusiness, and franchising. Plus, there’s one on business culture. No surprise here: Mexicans in general prefer face-to-face meetings, often over long lunches with perhaps a tequila or two. Email is widely used, as is the aforementioned social media; but long-term success depends on the creation of a solid personal relationship.
| Product Model | Inside Diameter | Outside Diameter | Thickness |
| PCMF161812B bearing | 16 | 18 | 12 |
| PCMF151709B bearing | 15 | 17 | 9 |