Vietnamese businesses effectively exploits export space to Mexican market

Wednesday, 03/05/2023 11:32
Mexico is a market with a large population and strong consumption, where businesses can take advantage of tax incentives to promote exports of pangasius, tra fish, tuna, rice, and textiles.
Tra fish processing for export in Dong Thap province (Photo: VNA)

In the first months of the year, although export turnover to the Mexican market has decreased, according to trade experts, this is not really a cause for concern. Because this is a large market of about 130 million people and has a full customer segment from high-end to low-end.

On the other hand, Vietnam's export market share in Mexico has only reached a modest figure of about 1.3%, so there is still plenty of room for growth.

Moreover, Vietnam and Mexico are both members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), so taking advantage of tariff preferences from this agreement is an important lever to promote trade between the two countries.

Accordingly, Mexico has committed to eliminate 77% of tariff lines since January 14, 2018, equivalent to 36.5% of import turnover from Vietnam, and eliminate tariffs on 98% of tariff lines in the 10th year since the effect of the agreement.

Some Vietnamese products that can take advantage of tax incentives in the agreement to boost exports to Mexico include pangasius, tra fish, tuna, rice and textiles.

Ms. Cao Thi Phi Van, Deputy Director of the Center for Trade and Investment Promotion of Ho Chi Minh City, said economic and trade relations between Vietnam and Mexico have been continuously expanded and developed, especially since the CPTPP was signed and took effect.

Especially, as a dynamically developing economy, Mexico is gradually becoming an attractive market for the whole world, including Vietnam.

However, statistics show that in the first two months of the year, Vietnam exported more than USD575 million to the Mexican market, down 16.9% from the same period in 2022.

Notably, computers and electronic components alone accounted for a large proportion of Vietnam's total export turnover to Mexico, which significantly reduced Vietnam's exports to this market.

The reason was that there was a shortage of chips globally and Vietnam did not have enough raw materials to supply all markets, only focusing on supplying to a few large markets such as the US.

Commenting on this issue, Mr. Luu Van Khang, Trade Counsel of Vietnam in Mexico (concurrently Guatemala, Honduras, El Salvador, Belize), said that after the shortage of electronic chips was resolved, Vietnamese trade will bounce back.

Some other items are also in the group of reduced turnover such as textiles, footwear and seafood.

Besides decreasing items, there are still some items with increased or even higher export turnover. Specifically, coffee products increased 6 times over the same period in 2022; phones and components increased by 47.4%; machinery and spare parts increased by 17.2%; and means of transport and spare parts increased by 42.9%.

According to trade experts, currently, many Vietnamese businesses are very interested in increasing trade exchanges with the potential Mexican market. This is an easy market with a large population and strong consumption power.

In particular, along with consolidating trade relations with strategic partners, Mexico is strongly promoting the search for new markets such as the Asia-Pacific to avoid relying too much on traditional partners.

To expand exports and increase market share of Vietnamese products in Mexico, trade experts note that Mexican distributors do not import directly from businesses where they need products that are registered and are being distributed in Mexico.

Therefore, Vietnamese processed food products that want to penetrate this market must have distribution agents in the host country. This is an opportunity for trading companies and large companies to open a representative branch in Mexico and then put the goods into supermarket chains and large distribution systems.

In addition, businesses can participate in the fair in the form of many businesses and industry associations organizing delegations and forming the whole exhibition area for Vietnamese goods, thus making an impression and attracting the attention and familiarization of Mexican people with Vietnamese products.

In order to increase the identification of Vietnamese goods in Mexico, trade experts suggested that the Ministry of Industry and Trade consider organizing a delegation of 10-15 businesses to participate in large specialized fairs in Mexico every two years.

On the other hand, experts also suggested that Mexico send similar business delegations to Vietnam to help the two sides gather information, connect and find cooperation opportunities to boost exports to this potential market./.

Compiled by BTA