Trade deal with US expected to spur Mexican eCommerce
MEXICO CITY: Mexico’s fledgling eCommerce market could get a lift from a trade agreement with the Trump administration that doubles the value of goods that can be imported tax-free from the US, online businesses and experts said.
Mexico and Washington reached a deal to revamp the North American Free Trade Agreement (NAFTA) last Monday, but talks with Canada, the other country in the 1994 pact, are ongoing and could alter the terms.
The bilateral deal between the US and its southern neighbor would see Mexico double its minimum duty-free shipment threshold, called the de minimis value, to US$ 100, a step that should benefit both express delivery firms and online retailers such as Amazon. com Inc.
“It’s great for us as internet leaders,” said Enrique Culebro, head of Mexico’s internet association, which represents Amazon, Wal Mart de Mexico and various online services.
“We’re really optimistic about what this is going to mean for the country, especially for the digital economy,” he said.
The online market in Mexico, Latin America’s second-largest economy, was expected to be worth around US$ 7 billion in 2018, according to market research firm Euromonitor International, though that figure represents a small fraction of total retail sales.
Months before the deal, the firm predicted the market would be worth US$ 14 billion by 2022.
The US$100 threshold is well below the US$ 800 target the US had originally pitched in President Donald Trump’s broader push to rework NAFTA.
But it will make it easier for Amazon and other online platforms to offer an array of products to Mexican consumers, and could see sales climb for US specialty goods priced under US$100, said Carlos Hermosillo, retail analyst with Mexican brokerage Actinver.