How Mexico is becoming an increasingly important trading partner with Miami
By Yousra Benkirane
In past decades, Mexico’s presence in South Florida was concentrated mostly in the Redland agriculture area southwest of Miami, where Mexican immigrants labored as farm workers. In recent years, however, two-way trade between Miami and Mexico has steadily increased, along with direct Mexican investment. While just 27 Mexican firms are now located in Miami, they are major players. Grupo México invested more than $1 billion in the purchase of Florida East Coast Railways, for example, while Jose Cuervo’s U.S. real estate arm, Agave Holdings, is completing a $700 million mixed use project in Miami’s upscale suburb of Coral Gables.
“There’s a very, very strong Mexican investment in Florida, and it’s growing,” says Jonathan Auerbach, the Consul General of Mexico in Miami, citing more than $2.5 billion in trade between Miami and Mexico last year. “In 2016, there used to be just one maritime route between Mexico and Florida. Nowadays, we have six.”
Indeed, Mexico is now Florida’s seventh-largest merchandise trading partner, with a 15 percent revenue increase in 2021 compared to 2020, cresting some $11 billion in trade by sea and air statewide, according to the consulate. Mexico has also become a key maritime trading partner. According to PortMiami, imports from Mexico have increased 8.9 percent annually since 2008.
What’s driving this growth is demand from U.S. companies, says Estela Cachoua, executive director of the U.S. Mexico Chamber of Commerce. “Miami is one of the biggest cities in growth and development, and this increase in economic development has made a huge demand for different commodities,” says Cachoua; construction materials, cars, semiconductors, and other industrial products are all in high demand.
That seaborn trade is something leaders on both sides would like to accelerate. The issue is fiscal: The higher cost and longer transit time for land routes that cross the U.S.-Mexico border, combined with the proximity of Mexico’s Gulf Coast, has made PortMiami an attractive option.
Gary Goldfarb, the chief strategic officer at Interport Logistics, is pushing Mexican exporters to decrease their cost by shipping through the port. “Right now, they truck from Mexico to Miami at thousands of dollars more than what it needs to be,” Goldfarb says. Even using Miami as a port of entry for shipping to cities like New York would slash expenses. According to Goldfarb, it costs roughly $15,000 to move goods over land from Mexico to U.S. East Coast cities, while it costs about $2,000 to ship the same goods to PortMiami and then another $3,000 to truck them up the coast. “The right thing to do is get Mexican trade through PortMiami,” he says. “It’s absolutely the most logical thing in the world.”
To push this agenda further, the Florida-Mexico Working Group on Maritime Trade was established in June 2020. This group, a collaboration between the Consulate of Mexico and World Trade Center Miami, encourages the use of maritime routes. In June 2022, a Miami trade mission to Mexico was arranged to connect representatives from ports, chambers of commerce, and businesses, introducing Florida firms to organizations such as the Mexican Shipping Agents Association (AMANAC) and the Asociación Nacional de Transporte Privado (ANTP), an association of private transport companies. “The whole idea of the trade mission was for them to better understand the opportunities in Mexico and vice versa,” Auerbach said. “Through that, it gives us a whole new perspective.” The Consul General is so intent on creating closer ties between Miami and Mexico that he recently hosted a Day of the Dead celebration in Miami’s suburb of Coral Gables, dressing as a devil.
The trade mission also opened discussion about one of the most significant infrastructure projects of the Mexican government, the Interoceanic Corridor of the Isthmus of Tehuantepec. This project will enable goods and services to travel by canal from Salina Cruz, Oaxaca, on Mexico’s Pacific coast, to Coatzacoalcos, Veracruz, on its Gulf coast in about 24 hours. From there, goods can travel to ports in Florida.
Besides providing the efficiencies of maritime shipments to U.S. markets, Miami is a prime gateway to South America, making it an effective place for Mexican companies to stage their Latin American headquarters. CMX Cinemas, the North American subsidiary of Mexican corporation Cinemex, is one example, while other companies with Mexican connections include tech-related Broxel, Dinerazo, Delta Protect, LANUS Tech, and Quaxar. These firms are attracted by, and contribute to, Miami’s growing role as a tech hub for the Americas.
Miami is also becoming an attractive place for affluent Mexicans to invest in residential real estate, mostly as second homes. According to Miami-based International Realty Group, which recently opened an office in Mexico City, home buyers from Mexico pay the highest home prices of any Latin Americans – $1.25 million on average, compared to $875,000 for Brazilians. “For Mexicans, Miami has become the preferred place for vacation, even though California is closer,” says IRG CEO Giovanna Guzman. “They are the ones who buy the most expensive properties.” Guzman’s firm is marketing units to Mexican buyers in the new Waldorf Astoria tower in Downtown Miami, now under construction, where prices start at $3 million.
While Miami has made its own efforts to attract Mexican companies and facilitate their expansion, the Mexican Consulate has been active in creating links between the public and private sectors. For Mexican companies looking to invest or trade in Miami, the consulate provides connections to local authorities and incentive programs like IMMEX, which can help grant tax reductions. Likewise, Florida-based companies looking to import products from Mexico are linked to suitable suppliers across different industries.
“There’s no reason why this business isn’t ours already, but with the pandemic, some people have been sleeping at the wheel,” says Goldfarb. “It’s time to wake up. The market’s there, and there’s more and more manufacturing coming. It’s just a matter of us going out and pushing it.”
Next: Why the Real Estate Arm of Mexico’s Jose Cuervo Chose Miami
