Mexican Export Market Relying Less on U.S. Demand

Earlier this month, Mexico's Economy Minister, Bruno Ferrari, stressed how important it is to reduce the degree of reliance on the United States.

In this vein, Gerardo Gutierrez, president of Mexican employers' association Coparmex stated, "Being able to diversify Mexican exports is a priority for us," adding, "We have 12 free trade deals with 44 countries that we really don't make enough of."

Car makers in Mexico have been the first to capture new trade markets. Surging vehicle sales to Latin America have made a big dent in the U.S. dominance of Mexico's export business. For instance, the United States bought 61.7 percent of Mexico's car exports in October, while a year earlier it was 68.9 percent.

Another example of the diversification of Mexican exports is Mexico's new trade relations with Brazil; exports to Brazil quadrupled between 2005 and 2010. The surge has been boosted by demand for Mexican cell phones and telecoms components, exports of which rose five-fold last year, according to the Mexican-Brazilian chamber of commerce. At the same time, China's share of Mexican exports now nears 2 percent, making it the biggest market outside North America.

Gabriel Casillas, an economist at JPMorgan in Mexico City, expects Mexico's non-U.S. foreign trade to peak at about 25 percent of the total in the next five years.