Mexico is a major textile producer, with an industry based on competitive labor costs and geographic proximity to the United States. Textile manufacturing in the country dates back to 1830 and continues to grow - especially in central and north-eastern Mexico, including Puebla, Mexico City, Mexico State, Hidalgo, Tlaxcala, Guanajuato, Nuevo Leon, San Luis Potosí, and Coahuila. The sector now represents 3% of Mexico’s GDP and generates $7 billion per year.
International companies can capitalize on the large Mexican sector but should understand certain technical requirements, including rules of origin, verification audits, and reference prices.
Mexico has gradually reduced its tariffs on textile imports from the United States that meet the rules of origin under the United States–Mexico–Canada agreement (USMCA). For example, finished goods qualify for North American origination so long as the yarn and fabric are formed and finished in one of the partner countries. Additionally, the USMCA stipulates that sewing thread, narrow elastic fabrics, and pocket bag fabrics must be sourced from one of the parties.
As a result, the USMCA opens new opportunities for U.S. exporters in yarns, fabrics and apparel. Demand for these products has increased given the renewed certainty for investors and the growth of the automotive, aerospace, and medical device industries in the region. The United States is the second-largest supplier of textile machinery to the Mexican market. Companies are investing in new technology and machinery to improve their production and supply chains in order to provide fast turnaround times. With Nexus, companies seeking to invest in the Mexican textile and apparel sector are able to deliver quality products to their customers at low costs and greater certainty.
Additionally, companies in this sector can leverage Mexico’s 14 trade agreements to ship their products duty-free to 46 different countries. Companies are also able to work with Nexus’s team of experts to make their processes more efficient with the latest software and hardware technologies, as well as energy solutions that reduce utilities costs up to 50%.
With information from the International Trade Administration