Monday, May 20, 2024

Mexico moves up in global commercial services exports ranking

Mexico was the world’s 18th largest exporter of commercial services last year — excluding intra-European Union (EU) trade — rising five places from its 2022 ranking, according to the World Trade Organization (WTO).

The value of Mexico’s commercial services exports increased 9% in 2023 to reach US $52 billion, WTO data shows.

Among the sectors that contributed to that figure were financial services, transport, computer services, telecommunication services, and personal, cultural and recreational services including those related to tourism.

The top 10 exporters of commercial services among the 164 WTO members last year were, in order, the European Union; the United States; the United Kingdom; China; India; Singapore; Japan; Switzerland; the United Arab Emirates; and Canada.

Mexico also ranked behind South Korea; Turkey; Hong Kong; Israel; Australia; Thailand; and Taiwan.

Global commercial services trade totaled US $7.54 trillion last year, a 9% increase compared to 2022.

Tourists on a beach in Cancún
Tourism has made a strong comeback since the COVID-19 pandemic, and contributed to Mexico’s commercial services exports. (Cuartoscuro)

In separate rankings that considered each European Union country individually and included their trade with other EU states, Mexico was not among the leading 30 exporters of commercial services. (The WTO only listed the top 30.)

While the 9% increase as shown by the WTO data is encouraging, the vice president of the Mexican Business Council for Foreign Trade, Investment and Technology said late last year that there was an opportunity for Mexico to grow its commercial services exports sector as more foreign companies establish a presence here amid the growing nearshoring trend.

However, Eugenio Salinas asserted that the sophistication of the services Mexico offers needs to increase. Investment by companies such as Amazon Web Services, which intends to invest more than US $5 billion in a cluster of data centers in Querétaro, should help in that regard.

The WTO said in its April 2024 Global Trade Outlook and Statistics report that “information and communication technology (ICT) services continued to rise in importance in overall
services trade [in 2023], reflecting pent-up demand for software, cloud services, machine learning and cybersecurity as well as increased global Internet traffic.”

Mexico could conceivably increase its ability to meet that demand in coming years.

Salinas said last October that Mexico needs to increase its capacity for “mentefactura” (mindfacturing), which Spain’s University of Murcia defines as an “economy based on knowledge.”

In addition, he said that Mexico should aim to continue growing other commercial services export sectors including tourism — both recreational and medical — telecommunications and software.

President López Obrador and officials at inauguration ceremony in Isthmus of Tehuantepec
President López Obrador (center) accompanied by government officials and magnate Carlos Slim (far right) at the inauguration of the first passenger train of the Interoceanic Corridor project in December. (Lopezobrador.org.mx)

Meanwhile, Mexico’s transport sector commercial services exports should get a boost once the Interoceanic Corridor of the Isthmus of Tehuantepec becomes fully operational, allowing shipping companies to unload goods from Asia on the Pacific coast in Oaxaca and move them by train to the Gulf coast in Veracruz before they are transported via the Atlantic Ocean to points in North America or Europe.

The corridor, which includes a modernized railroad between Salina Cruz, Oaxaca, and Coatzacoalcos, Veracruz could — of course — also facilitate the movement of goods in the opposite direction. It has been touted as a rival to the Panama Canal.

Other WTO data on Mexico

The WTO’s latest Global Trade Outlook and Statistics report also showed that Mexico was the 17th largest importer of commercial services last year, excluding intra-EU trade.

Mexico rose two spots in the rankings in that category, its services imports increasing 10% compared to 2022 to US $69 billion. Mexico wasn’t among the top 30 countries in rankings that considered total commercial services imports of EU members individually.

WTO data also showed that Mexico ascended four positions to become the world’s ninth largest merchandise exporter in 2023 with revenue — as reported in January — of just over US $593 billion. Mexico ranked behind China; the United States; Germany; Netherlands; Japan; Italy; France and South Korea.

One of Mexico’s main exports to the U.S. is vehicles and auto parts, seen here being loaded on a dock in the port of Veracruz. (Asipona Veracruz)

Excluding intra-EU trade, Mexico was the world’s sixth largest exporter last year. It was the largest exporter to the United States in 2023, surpassing China to claim that enviable position.

Data also showed that Mexico was the 12th largest importer in 2023, purchasing foreign-made goods worth US $621 billion, a 1% decline compared to the previous year. Excluding intra-EU trade, it ranked as the ninth largest importer in the world.

Mexico wasn’t among the world’s 30 leading exporters of digitally delivered services. The United States ranked first in that category, followed by the United Kingdom, Ireland, India and Germany.

With reports from El Economista 

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