By Terry Potter, from the Michigan United Kingdom Center
On June 23, voters in the United Kingdom voted to leave the European Union by a margin of 52 to 48 percent. “Leave” won the majority of votes in England and Wales, while every council in Scotland saw “Remain” majorities. The vote is the beginning of a lengthy transition as the U.K. reconstructs its regional and global role.
Officially, the U.K.’s departure from the EU will not commence until Article 50 of the Treaty of Lisbon is triggered. This Article gives any EU member the right to quit unilaterally, and outlines the procedure for doing so. After triggering Article 50, the U.K. has two years to finalize negotiations – although many economists believe negotiations could potentially take longer than this and any extension to this two-year period would need to be agreed with existing EU members.
Once set in motion, Brexit cannot be stopped except by unanimous consent of all member states and any deal must be approved by a “qualified majority” of EU member states and can be vetoed by the European Parliament.
Theresa May, the U.K.’s new Prime Minister, has said she would not trigger Article 50 before the end of this year. According to Mrs. May, “Only the U.K. can trigger Article 50 and in my judgment, we should only do that when there is a clear view about what new arrangements we are seeking with our European neighbors. In the meantime, during the negotiations that will follow, there will be no change to people’s rights to travel and work and to the way our goods and services are traded or to the way our economy and financial system is regulated.”
It cannot be denied that Great Britain will experience near and mid-term costs as it rewires its economy, but there are good reasons to believe that both the United Kingdom and European Union will make the new arrangement work as it is in all parties’ interests to protect their important trade and investment links and the U.K. will have more freedom to expand its wider international business relationships.
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By Silvia Alonso, Michigan Mexico Center
Mexico is so much more than beautiful beaches, guacamole and tacos. Mexico retains its lure for international investment and boasts a stable economy, despite economically adverse events such as the recent currency devaluation and the fall of oil prices. As of the end of 2015, Mexico remains the 15th largest economy in the world, with a GDP estimated at USD 1.1 trillion, according to the International Monetary Fund. It is the USA’s third largest trading partner, behind China and Canada, and also the second largest trading partner of Michigan, after Canada. In recent years, Mexico has managed to keep a stable economy and a low inflation rate, which stood at only 2.13% during 2015 (one of the lowest ever recorded). Hundreds of international companies have chosen Mexico to house their manufacturing facilities, given its privileged geographical location, its proximity to the largest consumer market in the world (North America), its skilled workforce and regular tax incentives. There are two major industrial sectors that have been taking advantage of these opportunities and which present exceptional opportunities to Michigan companies:
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Automotive sector
Given Michigan’s tradition in the automotive industry, Mexico’s automotive sector has a special appeal to companies in the state. The country has transformed into an automotive manufacturing powerhouse in the last 15 years, with large OEM companies such as GM, Ford, Nissan, VW, FCA, Toyota, Honda and BMW, as well as large auto parts and Tier 1 and 2 suppliers such as Magna, Delphi, Robert Bosch, Continental, Rassini and Nemak, setting up operations in Mexico. In 2015, Mexico produced an estimated 3.4 million motor vehicles, placing the country 7th in manufacturing worldwide. According to some analysts, the country will produce 5 million vehicles by 2020, and will surpass South Korea and India to become the 5th largest manufacturer in the world. Between 2014 and 2015, several multinational carmakers announced large investment projects in Mexico, worth a combined value of $13.2 billion USD.
This industry has been mainly propelled by robust export sales, in particular to the North American market. As of the end of 2015, this industry directly employed 721,000 workers and has become the largest generator of foreign currency into the country. There is virtually no other manufacturing industry that has yielded such outstanding results in Mexico in the past five years.
Aerospace sector
Mexico has also emerged as an important hub for the aerospace industry. With an average 20% annual growth rate since 2004, this industry has become a major success. Over 330 companies and supporting entities are now established in the country, most of which are internationally certified as NADCAP and AS9100. The industry takes advantage of Mexico's strong manufacturing base, its highly valued engineering and development centers, its position next to the world's largest economy, and its extremely competitive costs (aerospace companies can produce in Mexico at costs that are 30% lower than in the US, 40% than in Europe and 50% than in Japan).
Large companies such as GE (a global leader in airplane engines), Honeywell, Churchill, Rolls Royce, Indra, Tata, Volare, Eurocopter and Bombardier have established in the country. During the past ten years (2005-2015), the industry has grown at a yearly average of 17.3%, reaching close to $7.5 billion USD of exported goods and services (including consulting, repair, maintenance, engineering, research centers and design). Most companies are located in the northern border states of Baja California, Chihuahua, Sonora, Nuevo León and the central state of Queretaro. These regions have extensive experience in high tech manufacturing, as they also house large automotive and electronics operations.
Looking ahead
According to Promexico, the country is experiencing growth in many other industries beyond the automotive and aerospace sectors, offering Michigan companies a wide range of opportunities to expand. These industries include agriculture, electronics, pharmaceuticals, mining, energy (oil & gas), electric appliances and construction materials.
The Michigan Mexico Center represents a perfect gateway for Michigan companies to pursue their business endeavors. We are looking forward to assist your company!
Schedule a Consultation
Interested in learning about opportunities for your company in Mexico? Our Michigan Mexico Center Director, Efren Flores will be in Michigan August 29-31. He will be speaking at the Doing Business in Mexico event in Grand Rapids on August 30th. To register for the event or for more information, click here.
If your company is interested in setting up one-on-one consultation with our Mexico office, please contact your regional International Trade Manager.
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MEDC Events
Attention Aerospace Companies!
We’re looking for a few additional aerospace companies to participate in the UK Trade Mission September 25-30. This is a unique opportunity to network and learn about the innovation occurring within manufacturing and aerospace in the UK. Participating companies will have the opportunity to network with high level government and local business representatives in partnership with the Manufacturing Technology Center in Coventry and the Midlands Aerospace Alliance. MI-STEP funds are available to cover 50% of the airfare, hotel and ground transportation costs associated with the trip. Additional matchmaking may be available at no cost to those who register before August 12.
If interested or need additional information, please contact Chris Bosio at 517-348-9256.
Trade Mission to Mexico
Led by Regional Export Network (REN) partner Automation Alley
October 16-21, 2016
Mexico City, Monterrey and Queretaro, Mexico
Join Automation Alley on a trade mission to Mexico, October 16-21, 2016. Matchmaking meetings will place your company in front of potential buyers and end users of your products, services and technologies. Expand your business into the booming Mexican market with help from Automation Alley.
Mission Cost: $4,995
Eligible Michigan SMEs can receive 50% reimbursement for travel expenses and participation fees from State Trade Expansion Program (STEP) grant.
Registration Deadline is September 16, 2016.
For more information about this event, click here.
Poland and Romania Trade Mission
Led by the Conference of Great Lakes and St. Lawrence Governors and Premiers
November 6-11, 2016
Poland and Romania
The Conference of Great Lakes and St. Lawrence Governors and Premiers is leading a multi‐sector trade mission to Poland and Romania, November 6-11, 2016. The mission’s goal is to assist small to medium sized companies from the Great Lakes‐St. Lawrence region to export products and services to these emerging markets. Each mission participant will benefit from a tailored schedule of B2B meetings, in-country briefings, networking events and logistical support.
Mission Cost: $1,350 per company (each additional participant is an additional $400)
Eligible Michigan SMEs can receive 50% reimbursement for travel expenses and participation fees from State Trade Expansion Program (STEP) grant.
Registration deadline is September 9, 2016.
For more information about this mission, click here.
China Trade Mission
Official State of Michigan Mission to China
November 12-19, 2016
Shanghai, Hangzhou, Shenzhen, Beijing
Join senior State government officials for the trade delegation to China taking place November 12-19, 2016. Participating companies will receive in-country market briefings; turn-key business service support including logistics, personal driver & interpreter; B2B matchmaking services for up to 4-5 days of one-on-one meetings; networking events with high level business and government officials; and customized itinerary.
Mission Cost: $998 per company ($298 per additional person traveling) Fee does not include international and domestic airfare, hotel or meals.
Eligible Michigan SME’s can receive 50 percent reimbursement on travel expenses and participation fee through the State Trade Expansion Program (STEP) grant.
Space is limited to only 10 companies and the registration deadline is August 15.
For more information, click here.
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Legal Essentials to Export Toolbox
September 22, 2016
8:30am- 4:00pm
Mt. Pleasant, MI
FREE, but registration required
This one-day educational program has three components designed to help businesses identify legal and compliance issues that are relevant as businesses pursue exporting opportunities. Four full-day group seminars will take place at different Foster Swift office locations, with video conferencing capabilities available at other office locations. Lunch will be provided. Special guest luncheon speakers from the FBI will speak on topics important to the business community, including "Identity Theft and How it Impacts your Business."
1. Trademark/service mark readiness
2. Export control overview compliance training
3. Foreign agent/distributor Contract checklist
To register, Click here.
Export Essentials for Finance Professionals
August 10, 2016
Grand Rapids, MI
8:30am-12:00pm
$120
GVSU’s Van Andel Global Trade Center, along with the Export-Import Bank of the United States, Comerica Bank and International Risk Consultants are bringing a half-day seminar to Grand Rapids, Michigan to educate Michigan businesses about the opportunities available to them when exporting to, and doing business with, foreign countries.
To register, click here.
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Investigating New Business Opportunities in the Pacific Rim
Select dates in August, September and October
Free - Online
2pm
Join the U.S. Commercial Service for a series of complimentary webinars focusing on business opportunities in leading and emerging Pacific Rim markets that are included in the Trans-Pacific Partnership (TPP). The webinars will focus on the 11 TPP countries and will cover the top sectors for U.S. exports and the associated tariff reductions under TPP, additional new market access benefits for U.S. manufacturers and service providers, and current investment and business climate.
To register:
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Doing Business in Mexico
August 30, 2016
Grand Rapids, MI
8:30am-12:00pm
$120
Mexico is not only the United States’ second largest export market, but also Michigan’s, accounting for 20% of all exports from the state. With Mexico being one of Michigan’s largest trading partners, the potential opportunities this market holds for Michigan businesses are endless. Join Van Andel Global Trade Center for a half-day seminar, “Doing Business in Mexico”, and discuss Mexico’s current business climate. This seminar is aimed at helping Michigan’s small and medium-size companies identify key market opportunities, determine entry strategies, and learn more about technical requirements for selling products, services and technologies in this booming high-growth market. Hear case studies from those who have been there, discover more about your industry in Mexico, and identify opportunities and find potential Mexican business partners and customers.
To register, click here.
Export Compliance, International Documentation and Automated Commercial Environment (ACE)
September 14-15, 2016
$275 for one day, $495 for both
Detroit, MI
The East Michigan is pleased to announce that Mike Allocca will be returning to Detroit in September 2016 to present a 2-day seminar on Export Compliance, International Documentation for Exporters and the new Automated Commercial Environment System (ACE) for Importers and Exporters.
DAY 1: Export Compliance:
Upon completion of this program, you will be aware of the new export security requirements for all exporters. You will walk away that day with a better understanding of the regulations and with specific tools & instructions on how to begin building a secure and compliant department & company.
DAY 2: International Documentation and Automated Commercial Environment (ACE):
If you want to make sure you are filling your international documentation out correctly, or you have questions, problems or delays due to documentation problems, this training program is a must for you. You will also be introduced to ACE- Automated Commercial Environment for importers and exporters. Learn how to file using the new ACE system for your EEI- Electronic Export Information. You can also run detailed reporting functions for your imports/exports and review what your customs broker is submitting to US customs on your behalf. Review what a forwarder is filling for exports on your behalf, as well learn how to self-file and save time and money.
To register, click here.
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For more information about the MEDC International Trade Services, visit http://www.michiganbusiness.org/grow/international-trade-services or contact export@michigan.org.
Follow us on LinkedIn: https://www.linkedin.com/company/export-assistance
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