Last year MMA was honored to be invited to the Dallas Bar’s International Law Section where several possible scenarios for Mexico were evaluated given the then state of “NAFTA II” and the probable election of AMLO as the new president of Mexico.
We are currently in the scenario where NAFTA II now known as USMCA is on its way and AMLO has been elected in a sweeping victory.
There are now 2 Mexicos and the opportunity / risk profile of Mexico depends greatly on what the business enterprise is taking advantage of in Mexico.
The internal Mexican market for consumer goods has been weak and will weaken further in 2019 and 2020. The most recent prognostication from the IMEF again reflects Mexico’s very weak inflation-adjusted GDP growth. Very weak meaning negative. So consumers will continue to be harder and harder pressed to purchase their basic basket of goods & services and more so luxury consumption. Not an easy environment to launch a new consumer oriented product into.
The Mexican external market for products produced, assembled, manufactured or grown in Mexico will, on quite the contrary, continue to do very well driven by Mexico’s cost advantages and China’s ongoing problems. An easy environment to take advantage of for global sourcing, especially in North America.
So which Mexico are you referring to?
Best,
Andrew Barker
Middle Market Advisory LLC
