Middle-class Mexicans snap up more products ‘Made in USA’

‘Deeply integrated’

Trade with the United States has increased sixfold since the North American Free Trade Agreement went into effect in 1994, according to Bank of Mexico and U.S. Commerce Department data. The trade agreement eliminated tariffs for goods and made it easier to invest across the border.

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See a breakdown of what Mexico bought from each state and how much revenue those exports generated.

Gallery

Middle class marches along in a changing Mexico: While many Mexicans and their neighbors to the north still imagine a country of downtrodden masses dominated by a wealthy elite, the ranks of the middle class are swelling.

In the United States, NAFTA is still often used as a pejorative shorthand for outsourced jobs, particularly in Rust Belt states where manufacturers have closed plants and moved south. The torrid expansion of auto manufacturing in Mexico, for instance, is viewed by some industry experts as a long-term threat to much-touted U.S. job growth in the sector.

But NAFTA today generates far less controversy in Mexico. The last large protests, by farmers angry about cheap corn imports from Canada and the United States, occurred in 2008.

During Mexico’s presidential campaign this year, none of the candidates — not even leftist challenger Andres Manuel Lopez Obrador — campaigned against NAFTA or threatened to revoke it. The winner, President-elect Enrique Peña Nieto, said he wants to expand it.

And there is little wonder why. Mexican exports to the United States have soared from $42 billion in 1993 to $263 billion in 2011, according to the Commerce Department. Almost 80 percent of Mexico’s exports go to the U.S. market, led by crude oil, fruits, vegetables, televisions, cellphones, computers and passenger vehicles.

“Before NAFTA, we had a slight trade deficit with the United States,” said Daniel Chiquiar, a Bank of Mexico statistician. “Now we have a huge trade surplus.”

U.S. exports have also multiplied, especially as the consumption tastes of the growing Mexican middle class increasingly resemble those of U.S. shoppers.

“Mexico and the United States are no longer competitors, where one country wins and the other loses. They are partners,” said Christopher Wilson of the Mexico Institute in Washington, who is the author of the report “Working Together.” “The Mexican and U.S. economies are now as deeply integrated as any on Earth.”

‘Looking for quality’

In a Costco store in the suburbs at the edge of Mexico City, shoppers browse shelves loaded with pallets of Kirkland vitamins, value packs of Nature Valley granola bars and sacks of Cape Cod kettle-cooked potato chips.

From 2009 to 2011, 825 new discounters and more than 3,000 convenience stores opened for business in Mexico. The biggest growth came in modern retail chains, filled with U.S. products, that are challenging, for better or worse, the traditional mom-and-pop stores doling out soda, eggs and tortillas.

Mexico bought $198 billion worth of U.S. goods last year, up from $41 billion in 1993.

The United States sold more stuff to Mexico than to Brazil, India, Japan and Britain combined.

At Costco, even the walls in the butcher aisle boast the “USDA Premium” and “USDA Choice” labels, in English.

Sales were up 12 percent last year at the company’s 32 stores in Mexico, according to Iñigo Astier, the executive in charge of purchasing for Costco’s Mexico operations.

“Costco members here in Mexico are middle class, even upper middle class,” he said. “As our economy grows, consumers are looking for quality products, and Costco is consistent in quality.”