Mexico growing fast as destination for exports

By DANIEL RIORDAN

"Poor Mexico, so far from God and so near to the United States."

The words of former dictator Porfirio Diaz cut no ice with Trade New Zealand's Mexican director, Jorge Arguelles.

Mexico still relies on US imports, but its economy has opened up to the rest of the world over the past 10 years and, with distance less of a handicap than it once was, New Zealand exporters are competing successfully on price and quality.

Mr Arguelles says that shipping times from New Zealand to Mexico have fallen from 30 to 40 days just four years ago to 13 to 16 days now.

Mexico is one of New Zealand's fastest-growing export destinations. Exports to that country more than doubled last year to $440 million, making it New Zealand's 16th-largest market.

That growth rate may not be sustainable, but Mr Arguelles sees no reason New Zealand exporters cannot continue to make major inroads into Mexico.

The biggest money-spinner remains the traditional exports leader, the dairy industry.

Mexico is one of the world's biggest dairy importers, with a burgeoning demand for butyric fat and other ingredients for making butter and hard cheeses.

Other opportunities for New Zealand exporters are in agritech, niche plastics, meat, wood, education, building and construction, as Mexico continues to privatise much of its infrastructure.

In particular, the demand is high for greenhouses, hydroponics, freeze-dry and dehydration systems and floriculture - mainly because of the lack of good export-quality fruit and vegetables from local sources.

Mexico's economy has achieved relative stability since a major currency devaluation in 1994.

But its dependency on the US - 80 per cent of Mexico's exports head north of the border - points to an inevitable slowdown in the local economy as American consumers and industry start trimming their demands.

Still, Mr Arguelles notes that the risk of the Mexican economy's grinding to a halt is a lot less than for other major economies in Latin America, because of its importance to the US.

His bailiwick also takes in Central America and the Spanish-speaking Caribbean.

Mr Arguelles says that New Zealand exporters are missing many opportunities in the region, although he acknowledges that cultural and language barriers are not easily overcome.