To Russia with love
Much wringing of hands is done in Mexico over the country’s excessive dependence on the United States as the primary market for its exports. With good reason: For years now, the United States has accounted for over 80% of Mexico’s goods exports. In boom times, Mexico makes hay while the sun shines. But when the U.S. economy tanks, like it did in a big way in 2009, Mexico suffers severely. The Mexican government has aggressively pursued trade pacts elsewhere around the world in the hope that local exporters would follow through with enthusiasm in exploring new markets. It seems to us, though, that Mexican exporters overall have shown little thirst for adventure in foreign lands. But maybe, with the U.S. economy still slow to gain strength after the long recession, new opportunities are beginning to capture the attention of more Mexican companies.
A look at export figures provided by the Economy Ministry (SE) reveals some interesting details. First, while the United States was the destination for just about 80% of Mexican exports in 2010, this percentage actually has been declining slowly since a high of 88% in 2002. A closer look suggests that Mexico has been taking advantage of strong demand from the BRIC economies: exports to Brazil grew by an incandescent 325% from 2005 to 2010, while exports to China increased by a merely torrid but nonetheless impressive 270% over the same period. China has come from a long way off to become Mexico’s third largest export market as of 2010. Mexico has also taken advantage of partial bans on Brazilian beef by Russia, developing an important new market in the process. The value of Mexican exports of frozen beef cuts to Russia through May 2011 had surpassed US$41 million, higher than at least the four previous years combined. Read the rest of this entry »
