This study presents a synthesis of 17 country studies on environmental goods and services (EG&S) commissioned by the OECD, UNCTAD and the UNDP. The countries examined are Brazil, Chile, China, Cuba, the Czech Republic, the Dominican Republic, Guatemala, Honduras, Israel, Kenya, Korea, Mexico, Nicaragua, Pakistan, Panama, Thailand and Vietnam. Its aim is to identify determinants of demand for EG&S; to show common themes and experiences in the EG&S markets of different countries; and to draw attention to key trade, environment and development policy linkages. It also seeks to contribute to the exchange of expertise and experience in the area of trade and environment so that liberalisation of trade in EG&S can benefit all countries, developing and developed alike.

Like other rapidly industrializing countries, Mexico is undergoing a transition driven by demographic, social, economic and political dynamics with direct and indirect effects on the scale and structure of Mexican industries, including the environmental goods and services sector. Over the last 15 years, Mexico has undertaken a series of structural reforms to adapt its economic model to the current world situation. Reforms are based mainly on market mechanisms, including the reduction of government intervention in the goods and services markets, as well as participation in international markets. The impacts of this new economic model vary from sector to sector. Mexico’s integration into the global economy through trade and investment agreements has fostered productivity and competitiveness in certain export industries and generated unprecedented gains in international markets. However, other sectors – mainly small and medium sized enterprises – have not been able to bring their structures, strategies and production processes up-to-date.

This report provides a strategic profile of Mexico on the environmental services sector. The report investigates the economic fundamentals affecting Mexico. These fundamentals are the source for Mexico’s latent demand. If a firm decides to have a local presence in Mexico, this requires a strategic understanding of local business conditions.

This market research report analyzes the market for equipment and services for the control and prevention of air pollution generated by mobile and fixed sources. The total market for equipment and services in the sub-sector of mobile sources is expected to grow by approximately 5.0 percent from 2006 to 2007. The total market for equipment and services in the sub-sector of fixed sources is also expected to grow 6.0 percent during the same period. Both sub-sector markets have become more competitive, especially due to efforts made by companies from Germany, Japan, Canada, Great Britain, and others. The total sub-sector market for mobile sources in 2005 for air pollution control equipment and services was USD 307.2 million. It is expected that the total market will increase to USD 337.1 million by the end of 2006. For the sub-sector of fixed sources in 2005, it was USD410.4 million and it is expected to increase to USD449.3 million by the end of 2006.

The Commission for Environmental Cooperation (CEC) conducts policy and research work on environmentally preferable goods and services (EPGS) in eleven different activities. One specific activity is to “Identify changes/trends in trade in green goods and services in the NAFTA region.” Lacking any definitive quantification of trade in EPGS, and also lacking any established or consistently used industry codes that result in ongoing government statistics on environmental trade, in 2003 CEC commissioned a study to provide a definition and quantification of trade in EPGS in the NAFTA region. CEC selected Environmental Business International Inc. (EBI), a market research firm dedicated to the environmental industry since 1988, to conduct this research and present a quantification of environmental trade in the NAFTA region.