Opportunities for exporters of manufactures from Mexico to Canada

The Ministry of Economy highlighted a series of opportunities for exporters of manufactured goods from Mexico to Canada.

Through the analysis of trade flows, the Ministry of Economy identified a sample of products with export potential that is presented below.

The methodology classifies opportunities as follows:

First

Competitive Products: those where Mexico is an important supplier to Canada (market share above average) and the import market grows above average.

Second

Opportunity Products: those where Canadian imports grow above the average, but Mexico has a below average share.

Third

Consolidated Products: those where Mexico is a major supplier to Canada, but market growth is slow.

Fourth

Decreasing Products: those where Mexico has little market share in Canada and the market grows slowly. Subsequently, we present a preliminary analysis of the services sector, which has been identified as a potential market.

Exporters of manufactures

According to the Global Affairs report, Canada’s State of Trade 2020, last year there was an 8.2% increase in Canadian imports of agricultural products -particularly fruits, nuts and meat- and in general a 4% increase in total imports.

Additionally, Mexico was Canada’s third trading partner during the first quarter of 2020, after China and the United States (second in the food sector).

Manufacture

It is that sector that is dedicated to the mechanical, physical or chemical transformation of materials or substances in order to obtain a new product. This sector is of special importance for Mexico, having contributed 17.3% of the country’s total GDP in 2019.

Among the main Mexican exports to Canada, products such as automobiles and their engines stand out; materials for the assembly of aircraft and machines; electronic equipment, such as recorders and monitors; plastics and their manufactures.

Opportunity Products

The new rules of origin for the steel and aluminum automotive sector contained in the USMCA promote the integration of small and medium-sized enterprises (SMEs) into regional value chains.

With the new regional content value lows in the automotive sector, SMEs have a greater opportunity to become suppliers to automotive companies.

These are large companies that, by establishing themselves in a country, promote the economic growth and development of their surroundings, through the purchase of products and hiring of local services.

An example is the Original Equipment Manufacturers (OEM) of the automotive industry that have established themselves in Mexico.