Digital Trade Dialogues: Spotlighting Mexico
eTrade Alliance Mexico Policy Dialogue
By Erica Vambell, Research Associte, Nextrade Group
The eTrade Alliance has a robust workstream to conceptualize and promote policy solutions conducive to MSME ecommerce. As part of this work, the Alliance is hosting several virtual Digital Trade Dialogues between Alliance members and emerging market private sector leaders and government officials. On March 3rd, 2021, the Alliance hosted one of these virtual dialogues with Mexican policy makers and private sector leaders to discuss the current state and future of ecommerce and digital economy in Mexico. The event was co-hosted by Alliance partner eCommerce Institute and the Mexican Association of Online Sales (AMVO).
The dialogue featured over 6 hours of discussions and support for the growth of Mexico's ecommerce sector and the work of the Mexican government in promoting the digital economy and micro, small and medium enterprises (MSMEs), with a particular focus on women-led businesses in ecommerce.
eCommerce Institute and Nextrade opened the event by introducing the eTrade Alliance and diagnostics on Mexican MSMEs’ use of ecommerce and on the adoption of policies conducive to ecommerce. The Alliance also shared two data-driven background papers with the participants, on the State of MSME Ecommerce in Mexico and use of Fintechs by Mexican MSME online sellers. Mexico’s ongoing work to promote MSME ecommerce and economic recovery was highlighted, and we got to hear from two leading Mexican women entrepreneurs about their respective success stories in ecommerce - Deborah Dana, founder of Canasta Rosa, an online marketplace for unique products made by women entrepreneurs, and Itzury Alarcón, founder of Alerlit Cacao, an online seller of cocoa products.
The Alliance then held a series of panels offering rich expertise and perspective in discussing timely and relevant ecommerce topics such as:
Mexico’s ongoing work to promote MSME ecommerce and economic recovery, featuring speakers from OECD Mexico Center, UN Economic Commission for Latin America and the Caribbean (ECLAC), and Ernesto Acevedo, Undersecretary of Industry, Trade, and Competitiveness, Secretariat of Economy. They discussed the macroeconomic challenges created by the Covid-19 crisis and how digitization and ecommerce can be effectively used to help MSMEs overcome the crisis - and how digitization in general can bridge long-standing economic and gender disparities, for example through telemedicine, remote education, and digital financial innovations.
Digital cross-border payments, including cybersecurity and digital identity solutions, with speakers from the Central Bank, Mastercard, Visa, and R3. The speakers discussed the challenges that MSMEs face in payment transactions while looking to export and sell across borders, including areas for improvement such as in payment infrastructure and allowing the private sector to innovate in this area, ensuring interoperability of different payment systems, and enhancing security measures. Regulation and policy that supports these measures are critical. While Mexico has made significant progress in the modernization of its regulation of digital payments, there are still opportunities for improvement. Innovation is also essential, and Mexico has numerous innovative companies adapting digital payments to enable global ecommerce.
Logistics, last-mile delivery, and trade facilitation, discussed by the Secretariat of the Economy, Amazon, UPS, DHL, iVoy, and O’Donnell. The speakers touched on the challenges faced in the legal and regulatory system for trade facilitation and in the planning of logistics operations. To deal with these challenges, the Mexican government has created a trade facilitation agenda and a new National Trade Facilitation Committee to modernize and speed up the customs process, and is open to receiving feedback through working groups and dialogues. There were calls for further improvements in interoperability of actors in trade processes, and greater transparency and automation.
Finance instruments and the growing role of Fintechs in enabling MSME ecommerce, hearing from representatives from Konfio, Mastercard, Stripe, Conekta, Mercado Crédito, and Visa. The panel discussed how access to finance is one of the main challenges that MSMEs face when operating and growing their business. The traditional system of financing from banks is often inefficient and slow, and involves excessively high fees for small companies. The emergence of fintechs has greatly improved the process of obtaining financing by reducing dependence on banks and accelerating approval processes and access to funds. A key contributor to this has been digitization and innovation of KYC processes, which can continue to be improved in order to expand financial inclusion and allow more MSMEs to access finance. The government can help with this by providing access to public information on companies as well as working on policy for education and formalization of businesses to help establish credit history.
Ecommerce capacity building and export promotion, especially to enable women-led businesses in ecommerce, with panelists from the Secretariat of the Economy, Secretary of Development of Mexico City, UPS, Facebook, Visa, and eBay. The panel discussed various ways in which national and local governments and leading private sector firms are building firms’ capacity for ecommerce and ecommerce exports. The panel was complemented by a discussion of new initiatives that promote and accelerate inclusive ecommerce, including the Economy Secretariat’s Comercio.mx platform which builds on the Inter-American Development Bank’s ConnectAmericas platform to enable Mexican firms to identify leads from international buyers, and eCommerce Institute’s new eCommerce Mind initiative to build ecommerce and digital capabilities of Latin American ecommerce leaders.
U.S.-Mexico-Canada Agreement (USMCA) as an enabler of MSME ecommerce between Mexico and the United States, featuring representatives from Mercado Libre and Google, and Mexican Undersecretary for Foreign Trade, Luz Maria de la Mora. The panel discussed the groundbreaking data transfer, online consumer protection, and internet intermediary liability rules in USMCA and their importance for North American digital integration. The panel also discussed the opportunities of USMCA’s provisions on paperless trade, trade facilitation, and SME promotion, to enable MSME ecommerce.
The event agenda can be found here.
See eTrade Alliance's other Digital Trade Dialogues with Ecuador, the African Union, and the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP). UNESCAP event presentations are available here.