The world’s largest ocean carrier has projected Mexico’s container trade will grow 6 percent this year as the country continues to be fueled by various economic tailwinds.
Maersk Line expects Mexico to deliver another strong year of trade for 2018, the world’s largest container shipping company said in its Mexico Trade Report.
Mexico’s trade growth is expected to be boosted by forecasts of 3 percent global trade growth in 2018, robust U.S. economic performance, the FIFA World Cup and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), Maersk said. In addition, Mexico’s booming automobile manufacturing industry shows no signs of letting up.
The FIFA World Cup, which will be hosted in Russia this year from June 14 through July 15, is expected to be beneficial to Mexican trade in the first quarter due to electronic goods demand ahead of the sports competition.
According to the Secretariat of Economy, Mexico is the largest worldwide exporter of flat panel displays.
Meanwhile, the CPTPP was formally signed last Thursday in Santiago, Chile between all original Trans-Pacific Partnership signatories, except the U.S. The 11 signatories of CPTPP include Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
“On the imports side, CPTPP will increase Mexico’s attractiveness as a gateway for trade to the U.S,” Jaap de Mots, head of trade and marketing for Maersk Line Mexico and Middle America, said in the report. “For exports, we believe Mexican agriculture to be among the main beneficiaries of CPTPP in 2018, but it is going to take time for Mexican industry, as well as agriculture to diversify as a whole and explore the opportunities that the trade agreement provides.”
However, in regards to when the trade deal will enter force, New Zealand’s Ministry of Foreign Affairs and Trade said it believes it “could happen within a year to 18 months of signature.”
Ultimately though, Maersk believes that CPTPP will spur more opportunities for Canada and Mexico to compete more aggressively for U.S. trade opportunities.
In addition, Mario Veraldo, managing director for Maersk Line, Mexico and Middle America, said in the report, “Long Beach/Los Angeles remains the top container port in North America, but congestion related to rail, trucking and other variables are impeding it from competing as effectively as it could be, providing opportunities for Mexican ports of call such as the Lazaro Cardenas semi-automated TEC II terminal to compete.”
Looking ahead, Veraldo said Maersk forecasts total long-haul container trade for Mexico growing 6 percent in 2018, with imports rising 7 percent and exports increasing 4 percent.
In comparison, Maersk expects container trade for Canada to grow 7 percent this year, while for the U.S., it expects growth of 2-4 percent.
In regards to Mexico’s exports, Veraldo told American Shipper in a phone interview that Maersk firmly believes Mexico will be one of the countries in the world that will continue to provide a lot of food, particularly avocados and bananas. He noted how Mexico has a lot of land available to produce food.
Despite looming uncertainty with the North American Free Trade Agreement, Veraldo said Mexico’s automotive market continues to grow and develop. Even though there may be changes in the way things are organized in regards to tariffs, we continue to see Mexico being competitive in automobile manufacturing, he said, also noting how a lot of tier 1 and tier 2s are still establishing themselves in Mexico.
Back in October, London-based shipping research and consulting firm Drewry also made it clear the outlook for Mexico’s automobile industry was positive. “New investments from Kia, Toyota, BMW and Daimler Benz will see Mexican car manufacturing capacity reach 5 million vehicles by 2022, up from 3.4 million in 2015,” Drewry had said.
Maersk predicts strong trade growth for Mexico in 2018
