The Mexican government has approved the TACNA Immex Program in Mexico. Foreign companies manufacturing can make use of its high, low-cost labour pool, and its highly skilled technological and skilled professional workforce. Operating under the IMMEX programme in Mexico, such companies can get significant tax, monetary and import/ export benefits to aid reduce operating costs at their plants. This is because Mexico is a trading partner of the USA and vice versa. Imports and exports of goods are in the same economic block and each country benefits from the other. They need both physical and indirect labour, and both countries have made it easier for them to do business as they are allowing each other’s companies access to the Mexican market.
The IMMEX is the only foreign exchange trade agreement between a foreign company and a Mexican subsidiary. The system was established in 2021 when the two parties agreed to increase exports and imports by establishing a single trade account. It enables foreign manufacturers to buy raw materials and services directly from the Mexican suppliers. In exchange for these, the Mexican government extends various incentives. These incentives, like the right to free choice of products and the elimination of duties on imported goods that would normally be paid in the USA, make the IMMEX system an excellent choice for foreign businesses.
Just how did mexico offers such advantages for foreign corporations? The main reason for this is that mexico offers extremely cheap labour. Compared to the wages in the USA, the wages in mexico are far more attractive. A single Mexican company could hire 100 workers for the equivalent of $8 an hour, whereas in the USA this would be equivalent to almost nine dollars an hour.
Another incentive that the Mexican government offers is the support it gives to its foreign investments. Many foreign manufacturers set up their operations in Mexico simply because they prefer the low cost of doing business there. Mexico provides them with low cost raw materials, lower tax rates and other significant incentives. Without such incentives, many foreign manufacturers find it difficult to do business in Mexico and so most of them choose to manufacture there.
The IMMEX system was created as a tool that foreign manufacturers can use to access the raw material and other benefits that Mexico offers. For example, soybeans that would otherwise be very expensive to import can be bought directly from soybean farmers in Mexico for about half the price that they would pay in the USA. Similarly cotton that would normally be imported from China can also be accessed in Mexico at close to the price of cotton grown in the USA. A single manufacturer who operates a processing unit in Mexico can process 500 tons of cotton per year compared to about 100 tons for the same capacity in the USA. This huge advantage for Mexican manufacturers has made the IMMEX Program in Mexico a very popular one.
The IMMEX has helped foreign companies manufacturing products in Mexico gain a foothold on the country’s economic growth. Importers and exporters have realized that the benefits of having their products processed in Mexico are many. Indeed it has become a major aspect of Mexico’s economic policy that promotes the processing of exports into the country and encourages the growth of the domestic economy. The IMMEX has thus become a very important economic tool for Mexico’s growth.