Eyeing NAFTA advantages, Secretary Brown takes 39 minority firms to Mexico - Secretary of Commerce Ronald H. Brown

Business America, Jan, 1994

As one in a series of initiatives to make sure the North American Free Trade Agreement (NAFTA) produces profits for American companies and jobs for American workers, Secretary of Commerce Ronald H. Brown led 39 minority firms in a Matchmaker trade mission to Mexico City Dec. 7-9. The Matchmaker, designed to match U.S. firms with Mexican business partners, is a key part of the U.S. Department of Commerce's Export Mexico program, launched last September. "In Mexico City, we succeeded in acquainting the participating minority firms with the vast opportunities NAFTA opens up," Secretary Brown said. "Following the official kick-off of NAFTA Jan. 1, we are moving forward on a broader front to acquaint all U.S. businesses, regardless of size or ownership, with the new advantages of selling in Mexico."

The dismantling of tariff and other trade restrictions scheduled under NAFTA is expected to make the Mexican market even more attractive for U.S. firms than it now is. U.S. exports to Mexico have more than tripled in the past five years, growing from $12 billion in 1986 to a projected $44 billion in 1993. Optimism About Market. The great majority of businesses participating in the Matchmaker returned home optimistic about their sales prospects in Mexico. Ninety-five percent of the companies said they had achieved their objectives for participating in the Matchmaker: finding a sales representative or joint-venture partner; testing the market for their product or service; or gaining exposure in the Mexican market.

Stephen Harvey, Vice President of V&A, Inc., of Las Cruces, N. Mex., a participant in the Matchmaker, is making plans to make Mexico the target of the firm's first international venture. The Hispanic firm manufactures portable work stations that include a cellular phone, a notebook computer, and a laser printer, for business persons who are away from their regular offices. "The Mexicans have been paying a premium for foreign-made computers, because of high tariffs," Harvey observed. "Under NAFTA, the tariffs will come down, making products like ours much more competitive in the Mexican market. We think we have a good chance to break into the market. We had a number of good conversations with prospective Mexican customers and are now following up on the leads we obtained during the Matchmaker."

Michael Waller, President of Cleveland Telecommunications Corporation of Solon, Ohio--an African-American firm--also thinks NAFTA's lifting of trade restrictions "can only help" him in selling engineering and operational skills in systems engineering. telecommunications, and ADP/BPE in Mexico. "The Matchmaker gave me a more positive view of the Mexican market than I had expected. I think there is a lot of potential for us in Mexico. I am following up on the leads I located there and am planning a trip to Mexico in the first quarter of 1994."

Second Minority Matchmaker. Because the December Matchmaker was over-subscribed and unable to accommodate all applicants, the Commerce Department has scheduled another Minority Matchmaker in Monterrey, Mexico, on April 19-21. The December Matchmaker was held in conjunction with a trade show, Rep Com. The April mission also will be affiliated with a trade exhibition--Representaciones Monterrey '94. The April trade show, like Rep Com, is designed for U.S. firms, particularly those new to the Mexican market, seeking Mexican representatives, agents, distributors, licensees, or joint ventures. For information about the April Matchmaker, firms should contact the nearest district office of the Commerce Department's U.S. and Foreign Commercial Service (US&FCS). Of the companies represented in the delegation to Mexico City, 27 percent were African-American, 38 percent Hispanic, 20 percent Asian, 5 percent Middle Eastern, 8 percent Asian Indian, and I percent American Indian. The participants came from the District of Columbia and 14 states--California, Colorado, Illinois, Indiana, Maryland, Michigan, Mississippi, New Mexico, New York, Ohio, South Carolina, Texas, Virginia, and Wisconsin.

All told, it is expected that $14.4 million of sales will result from contacts made during the Matchmaker over the next 12 months. The participating firms obtained, overall, more than 1,000 sales leads, 283 agent/distributor prospects, and seven licensee projects. Four companies reported $15,600 in off-the-floor sales. The business participants represent industries that produce projects in particular demand in Mexico, including environmental and health care services, telecommunications, medical and electrical equipment, auto parts, and consumer goods.

Inter-Agency Effort. The Matchmaker was a cooperative effort by several federal agencies. The Commerce Department's Minority Business Development Agency furnished financial assistance for the Matchmaker. All the participants received counseling by the district offices of the Commerce Department's U.S. and Foreign Commercial Service to prepare them for their trip to Mexico. In Mexico City, a practical, hands-on briefing on how to finance exports to Mexico was conducted by the Small Business Administration, the Export-Import Bank of the United States, and the Commerce Department's Foreign Commercial Service (FCS) in Mexico. The FCS set up appointments for the U.S. companies with potential Mexican business partners, representatives, and distributors, all of which were pre-screened to assure proper matches.