Mexico will diversify its export and trade agreements for importing products within Latin America. Mexico has signed many trade and customs agreements with Chile, and it has become one of the most promising partner countries in the region. However, the quality of Chilean cargo requires extreme care in logistics and distribution.

Despite the changes Mexico can have in its business relationship with the United States, it has a powerful internal market and a privileged location as a logistics hub to Europe and Asia.

The portfolio of Chilean export

Chile’s exports include a variety of products whose transportation and distribution is delicate and needs consideration, such as:

  • Copper cathodes
  • Fresh fruit
  • Wood and timber
  • Wine
  • Poultry
  • And much more

These products require strict health and sanitation certifications upon arriving into Mexico. However, Chile has a competitive advantage as it is a plague free country, with strict quality in its exports, which extends the confidence from Mexican trade authorities.

However, even though Latin America equals 22% Chile and trade, Mexico is still a small partner with a large potential for growth.

 The advantages of Mexico for Chile

Mexico has signed several bilateral and multilateral agreements with Chile. 

In 1998 both countries subscribed a Free Trade Agreement,  to stimulate the expansion and diversification of commerce, reduce barriers and improve the flow of goods and services.

On the other hand, according to El Comercio, one of the priorities of the Mexican government by 2017 will be deepening its relationship with the countries within the Pacific Alliance: Colombia, Chile, Mexico and Peru, according to Mexican Chancellor Luis Videgaray.

 The partnership was formed in 2011, as “a mechanism constituted by countries with similar visions of development, free trade, and economics.”

This association includes an alliance that improves the  exchange between these countries, by reducing taxes and fees, improving import and export operations and the optimization of service trading.

From May 2016, a new protocol eliminated 92% of tariffs for 12,000 items between these countries.

The partnership will continue extending by 2017 when a Mutual Recognition Agreement for authorized economic operators is scheduled for enactment. 

According to the Chilean customs authority, this will help improve foreign trade and strengthen the supply chain of these countries, with higher security standards for international trade.

Efficient customs procedures

With these agreements, customs and flow of goods between Mexico and Chile are much more efficient that with other countries. Both countries customs laws are strict in labeling and health certifications.

For instance, when delicate products such as wine a, Chile can self-certify products, and Chilean wine exporters can accredit the drinking quality, genuineness and its denomination of origin by the Chilean Agriculture and Livestock Service (SAG).  

Supply Chain Management in Mexico; challenges to import from Chile

Indeed, Chilean exports have preferential treatment in Mexican customs. However, those who manage global cargo logistics in Mexico must find partners they can trust to align and provide continuity to their supply chain.

 Spanish supply chain consultant José Luis Galiana gives examples of the challenges of the wine industry.

“Not all wines can have the same supply chain.”

Why? He asks. Managing these products requires: 

  • Strict planning of sales and operations to avoid overstock
  • Detailed knowledge of Incoterms for logistics delivery.
  • A well-defined trade distribution network and export chain.
  • Good customs management, to avoid unnecessary costs, delays in delivery and payment delays
  • A freight transport network that is sensitive to sudden changes in temperature.
  • An excellent transport management system for cargo optimization and avoid going over the maximum permitted load.
  • An excellent inventory management system
  • Good tracing capacity to those exporting in bulk sizes
  • Good warehousing management and adequate labeling capacity.

That way, exporters and traders of products from Chile needn’t worry about arriving in Mexico: their doors are open. However, they must take care to have seamless health and safety standards for products, from customs to their client’s doorstep. 

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