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Mexican exports concentrated in few states

Mexican exports concentrated in few states

Governors strategize to diversify the origins of Mexican exports.

Mexico has risen to be the world’s fourteenth economy in its size, and the tenth largest in terms of its purchasing power parity. The increasing sale of Mexican exports abroad has been the principal motor driving the country’s economic engine.

In 2013, exports accounted for almost thirty-eight percent of GDP. Despite Mexico’s overall strong position as a trading nation, government officials are concerned as regards the disparity that exists between Mexican states that export, and those that don’t.  An eighty-two percent share of national income generated by Mexican exports has its source in only eleven of the nation’s thirty-one states, while exports from a group of thirteen states combined accounted for a paltry total of four percent of goods and services sold in the international market place during the last calendar year.

At a recent gathering of state governors in the city of Puebla, Idelfonso Guajardo Villareal, the Mexican economic secretary, voiced the concerns of the government that he represents. According to Guajardo Villareal, the Mexican federal government “is making efforts in preparing all states to be able to participate in export activities.” Activities specifically mentioned by the Secretary of the Economy included:

  • expanding access to export financing to medium, small and micro businesses;
  • facilitating and encouraging businesses’ participation in international trade fairs through the strengthening of partnerships between private enterprise and ProMexico, the governments investment and trade promotion arm;
  • improving and expanding upon free trade agreements in place, under which ninety percent Mexican exports are covered, such as the NAFTA, the Mexican free trade agreement with the European Union and those in already in place with Latin American countries such as Peru, Chile and Colombia. Since joining NAFTA in 1994, he country has negotiated 11 tariff-reduction accords and has more Mexican free trade agreements (44) than any other country;
  • diversifying Mexico’s customer base; a full seventy-eight percent of Mexican exports are purchased by the United States.

During the meeting of Mexican governors, Rafael Moreno Valle Rosas, the chief executive of the State of Puebla, emphasized the importance of promoting the diversification of Mexican exports by pointing out that twenty-nine percent is comprised of transportation equipment, twenty-two percent is composed of computer and communications equipment, while only fifteen percent is derived from oil industry production.

The governor of the State of Hidalgo, Francisco Olvera, suggested during the meeting of chief executives that the Mexican federal government take the lead in establishing export “Support Centers” in each one of the republic’s thirty-one states. The mission of such entities would be to provide small and medium-sized business with the education and training necessary for more Mexican business to create and benefit from international export opportunities.

Read the primary source for this post in its original Spanish at El Economista.

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