About HKTDC | Media Room | Contact HKTDC | Wish List Wish List () | My HKTDC |
繁體 简体
Save As PDF Email this page Print this page

Mexico: Market Profile

Major Economic Indicators

Table: Major Economic Indicators

Recent Developments

  • Muted public spending, a weak construction sector, devastating floods and slower US demand growth contributed to the slowdown of the Mexican economy in 2013. With an expectation of profiting from the gradual pick-up across the border, despite the uncertain impacts of unwinding massive monetary stimulus there, the Mexican economy is forecast to see higher growth of 3.4% in 2014.
  • Hong Kong’s total exports to Mexico soared by 35% to US$2.9 billion in 2013, while its imports from Mexico increased by 8% to US$565 million.

Current Economic Situation

After posting high growth of above 4.0% on average between 2010 and 2012, the Mexican economy moderated in 2013 due mainly to the muted public spending, slumps in the construction sector, floods swept through many states during September and slower demand from the US.

On entering 2014, the Mexican economy is expected to profit from the gradual pick-up across the border, despite the uncertain impacts of unwinding massive monetary stimulus following Fed’s announcement to taper its monthly bond-buying program in December 2013. Meanwhile, a record low interest rate of 3.5% will likely underpin the rebound of sentiment among consumers and investors, while a weaker Mexican peso will bolster exports and facilitate the continuing trend of industrial relocation to Mexico. In all, the Mexican economy, on the back of the recovering US economy, is forecast to grow by 3.4% in 2014.

Trade Policy

The Mexican government has taken decisive steps in recent years to further liberalise its import regulations in place on a wide array of products. These efforts have greatly enhanced the prospects for exporters in the Mexican market, who currently face a considerably lower import barrier than few years ago.

Import duties

The Harmonised System is used for goods classification and customs clearance in Mexico. As a WTO member, Mexico affords at least most favoured nation (MFN) tariff treatment to all its trading partners. Tariffs are levied on most products entering Mexico, applying ad valorem to the CIF values of imports. Since 2008, Mexico has embarked in a years-long, unilateral effort to reduce its MFN duties rates on approximately 97% of manufactured imports. The most recent round of cuts took place on 1 January 2013, covering certain apparel, textile made-ups and footwear, reducing the MFN duty rate for apparel and textile made-ups imported into Mexico to 20%. Tariffs aside, most imports are subject to a 16% value-added tax (VAT) in Mexico, while a 0.8% ad valorem customs processing fee is levied on imports.

Import Documentations

In Mexico, all imports must be accompanied by an import declaration, which must contain a broad range of information including a commercial invoice (must include information about the place and date of issue, name and domicile of the consignee, detailed description of the merchandise and name and domicile of the seller), a bill of lading or airway bill, documents showing compliance with non-tariff regulations and restrictions, certificates of origin, applicability of antidumping duties, documents demonstrating guarantee of payments of additional duties when imports appear to be undervalued, and information allowing identification, analysis and control of the imports (such as serial number, brand, model or technical specifications).

Anti-Dumping and Countervailing

As of July 2013, Mexico applies no anti-dumping (AD) order on Hong Kong’s exports. On the other hand, the transition duties imposed by Mexico on a range of Chinese mainland products were eliminated on 12 December 2011. Yet, the Mexican government has stressed that regular AD and safeguard actions against Chinese mainland products may be initiated to protect the domestic apparel, footwear and other sectors from injurious competition from abroad. As it now stands, Mexico applies 13 AD measures on imports from the Chinese mainland and has one ongoing investigation, while it does not apply any AD measures on imports from Hong Kong or countervailing (CV) measures on imports from the Chinese mainland or Hong Kong.

As part of the on-going efforts to enhance the monitoring of imports in Mexico, the Servicio de Administración Tributaria (SAT) launched on 15 December 2011 a new price alert system to detect any practices of undervaluation that may adversely affect domestic producers. SAT indicates that this price alert system will initially focus on 400 textile tariff lines and will subsequently incorporate tariff lines of Chapters 61, 62 and 64. Other sectors beyond the textile, apparel and footwear sectors will be incorporated into the system at a future date.

Product standards and labelling requirements

Basically, Mexican product standard regulations can be classified under two categories, namely mandatory technical regulations (NOMs) including labelling requirements, issued by government agencies and ministries, and voluntary standards (NMXs) issued by recognised national standardisation bodies. In short, most of the standards and certificates are in line with US standards, so that Hong Kong companies can have their products tested and certified before shipment in Hong Kong or the Chinese mainland.

On labelling, all products intended for retail sale in Mexico are required to bear a label in Spanish prior to importation. Most NOMs require commercial information to be affixed, adhered, sewn, or tagged onto the product, with information such as the name/business name and address of the importer and exporter, trademark or commercial brand name of the product, net contents, use/handling/care instructions for the product and relevant warnings and precautions, if applicable, in Spanish.

Preferential treatments

With a wide network of free trade agreements in place, Mexico is having preferential access to 45 countries, including the EU, US and Japan. In a recent move of interest to Hong Kong traders, Mexico signed on 18 June 2012 a comprehensive agreement for the avoidance of double taxation (CDTA) with Hong Kong, aiming to encourage the flow of investment and talent between the two economies. With the enforcement by 7 March 2013, tax paid for income earned in Hong Kong by Mexican residents will be allowed as credit against tax payable in Mexico from the year of assessment 2014/2015 onwards, while a lower withholding tax will be applied to Hong Kong residents receiving interest from Mexico.

In a bid to have better synergy when making inroads into the Asian market, Mexico signed an accord in June 2012 with Chile, Colombia and Peru to establish the Pacific Alliance (PA) to reach out to the Asia-Pacific region as a united force. In August 2013, the PA members reached a preliminary agreement to eliminate tariffs on 92% of goods traded within the bloc as soon as the agreement enters into force, while the remaining 8% will be dropped progressively and steadily in coming years.

Hong Kong’s Trade with Mexico^

Mexico is Hong Kong’s largest export market in Latin America. Hong Kong’s total exports to Mexico surged by 35% to US$2.9 billion in 2013, after increasing by 5% to US$2.2 billion in 2012. Major exports to Mexico in 2013 included telecommunications equipment & parts (shared 40% of the total), electrical apparatus for electrical circuits (8%), electric power machinery & parts (6%), semi-conductors, electronic valves & tubes (6%), parts & accessories of office machines/computers (4%), toys, games and sporting goods (4%) and computers (3%).

On the other hand, Mexico is Hong Kong’s 3rd largest source of imports in Latin America, after Brazil and Costa Rica. Hong Kong’s total imports from Mexico increasing by 8% to US$565 million in 2013, following an 8% decrease to US$521 million in 2012. Leading import items in 2013 included computers (shared 26% of the total), telecommunications equipment & parts (22%), fresh or dried fruit and nuts (9%), parts & accessories of office machines/computers (6%), plastic waste, parings & scrap (5%), crustaceans, molluscs & aquatic invertebrates, chilled, frozen, dried, salted or in brine (4%) and leather (3%).

Table: Hong Kong Trade with Mexico

^ Since offshore trade has not been captured by ordinary trade figures, these numbers do not necessarily reflect the export business managed by Hong Kong companies.

Content provided by Picture: Louis Chan