Mexican businesses revamp imports process as US trade become uncertain

Global Business

China and Mexico’s bilateral trade is growing, and business owners are exploring new ways to import goods from the Asian giant.

CGTN’s Denny Alfonso reports.

Business owner Carlos Sosa imports tech-parts that get assembled into electronics in Mexico. He brings 99 percent of those goods from China through the U.S.

But he is skeptical about the potential changes to the free-trade agreement. “The minute the free-trade accord is modified, we can expect to pay about 10 to 20 percent taxes over the Chinese products we intend to bring through the United States,” Sosa said.

Sosa is one of the dozens of local entrepreneurs that looks into companies like Alsagi, a Mexican firm that has been importing a monthly average of one hundred tons of merchandise from China over the last two years.

 “We have a business partner over there, they audit the local companies, supervise the quality control, and get the permits required to complete the shipping operation departing mostly from Ningbo and Guangzhou’s ports,” Sarahi Perez of Alsagi Imports said.

Last month, the White House notified the U.S. Congress of its intent of beginning the renegotiation of the North American Free Trade Agreement with Mexico and Canada- the talks are expected to begin in August. Meanwhile, Mexico’s presidential election is scheduled for July 2018 which could mean new changes for a revised agreement.

With the NAFTA renegotiation pending, many Mexican businesses are hiring companies to facilitate the import process so they can avoid bringing the products through the U.S.

One financial analyst explained that the existence of companies like Alsagi will benefit the local economy, but said there is more work to do to generate a fair commercial exchange between the two countries. One of them being the investment on the infrastructure needed to support the big demand of Chinese goods entering through Michoac’s Lazaro Cardenas Port.

“It will be beneficial to let China invest in Mexico to complement those imports, for instance in the manufacturing process, so the local industry can gain a bigger impact on the creation of jobs, ” said financial expert, Rodolfo De La Torre.

According to the Foreign Ministry office, Mexico’s imports from China amount to nearly $70 billion, the government said they are looking to achieve greater trade balance by increasing their exports to the Asian nation.