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Mexico: Market Profile

Table: Major Economic Indicators
Table: Major Economic Indicators

Recent Developments

  • Continued pick-up in both the domestic construction sector and the US economy has contributed to the recovery of the Mexican economy, while accommodating a loose monetary policy and structural reforms have given the economy new growth momentum. Yet, structural weaknesses such as insufficient credit to SMEs remain unsolved. Given low tax revenue, the tightening of government spending is also expected to continue. With a weak peso and a sustained US recovery, Mexico is projected to register growth of 2.4% this year, before accelerating to 3.0% in 2016.
  • Hong Kong’s total exports to Mexico rose by 4% to US$1.6 billion in the first half of 2015, while its imports from Mexico fell by 24% to US$355 million.

Current Economic Situation

With its close links to the US, Mexico has clearly benefitted from the continued pick-up of the US economy since the second quarter of 2014. This, together with the recovering domestic construction sector and accommodating a loose monetary policy, which keeps the interest rate at a record-low 3%, and structural reforms in the energy (allowing for private sector participation), telecommunications (cracking monopoly), labour (moving workers into the formal labour sector to boost productivity) and financial (providing easier credit access to SMEs) markets, has provided new impetuses to the Mexican economy.

Yet, structural weaknesses such as insufficient credit to SMEs remain unsolved, while the tightening of government spending observed in 2015 will likely continue, given relatively low tax revenue. On the back of a weak peso (tumbled to a record low in late July 2015) that bolsters exports and facilitates the trend of industrial relocation to Mexico, a similar growth of 2.4% in GDP is estimated for 2015. As the benefits of structural reforms are expected to materialise and the US economy continues to fare well, the Mexican economy is forecast to grow by another 3.0% next year.

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 December 2014, 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 several AD measures on Chinese imports such as hydraulic bottle jacks, mushrooms and seamless steel tubing, while it has initiated a number of investigation cases on imports such as children’s bicycles and certain steel products from the Chinese mainland, while it does not apply any countervailing (CV) measures on imports from the Chinese mainland or Hong Kong.

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 February 2014, the PA members reached an agreement to eliminate tariffs on 92% of goods traded within the bloc by 2015, while the remaining 8% will be dropped progressively and steadily in following years.

Hong Kong’s Trade with Mexico [1]

Mexico is Hong Kong’s largest export market in Latin America. Hong Kong’s total exports to Mexico rose by 4% to US$1.6 billion in the first half of 2015, after surging by 26% to US$3.7 billion in 2014. Major exports to Mexico in January-June 2015 included telecommunications equipment & parts (shared 42% of the total), electrical apparatus for electrical circuits (8%), computers (6%), parts & accessories of office machines/computers (6%), electric power machinery & parts (5%), semi-conductors, electronic valves & tubes (4%) and toys, games and sporting goods (4%).

On the other hand, Mexico is Hong Kong’s 3rd largest source of imports in Latin America, after Brazil and Chile. Hong Kong’s total imports from Mexico fell by 24% to US$355 million in the first half of 2015, following a 54% upsurge to US$870 million in 2014. Leading import items in January-June 2015 included computers (shared 34% of the total), telecommunications equipment & parts (20%), fresh or dried fruit and nuts (not including oil nuts) (9%), parts & accessories of office machines/computers (7%), crustaceans, molluscs & aquatic invertebrates, chilled, frozen, dried, salted or in brine (5%), plastic waste, parings & scrap (5%), and semi-conductors, electronic valves & tubes (3%).


Table: Hong Kong Trade with Mexico
Table: Hong Kong Trade with Mexico


[1] 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