World Country Guide

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 about 5 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 system allows American companies to take advantage of lower wages and running costs, as well as a less stringent regulatory regime. NAFTA (see below) has also contributed substantially to the growth of this part of the Mexican economy. Mexico also has a sizeable 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. In some respects this has been a mixed blessing: Mexico has suffered several economic crises in which over-reliance on oil income was at least a contributory factor. In the service sector, tourism is the most important single industry, although it suffered a serious downturn in the wake of the ‘9-11’ catastrophe and has yet to fully recover. As for the overall economy, after a mild recession in 2001/02, estimated Mexican GDP growth for 2003 was 1.5 per cent; this is expected to rise to 2.5 per cent in 2004. In 2002, inflation and unemployment were 5 and 2.7 per cent respectively.
Under the statist policies of the PRI, the government was always in firm control of economic policy. However, once the party’s stranglehold had been broken, Mexico embarked on the type of reform process familiar throughout the world: privatisation of state-controlled industries, deregulation and removal of tariffs and subsidies, and the opening of the economy to foreign investment. The reform process has been somewhat spasmodic and piecemeal, however, as a result of continuous political disputes. 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. Nor has Mexico neglected trade links with its fellow Latin American countries: there are free-trade agreements with Central America, Colombia and Venezuela. Mexico is also a member of the Inter-American Development Bank, the Association for Latin American Integration (ALADI) and, most recently, the Asian-Pacific Economic Forum (APEC). 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: Confederación de Cámaras Nacionales de Comercio, Servicios y Turismo (CONCANACO), 3rd Floor, Balderas 144, Col. Centro, 06079 México DF (tel: (55) 5722 9300; e-mail: gerardo@concanacored.com; website: www.concanacored.com).

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.