Adios Motor City: How Mexico is becoming the world’s best place to make cars

Quartz, 5/9/2013

Mexico’s auto production has taken a big leap since NAFTA. The country now accounts for roughly 20% of North American light vehicle production, according to a report this month by the Federal Reserve Bank of Chicago, compared with a 6% share in 1990. The country’s cars aren’t only traveling north. Mexico has become the world’s fourth-largest auto exporter an important global auto exporter, and it’s a good market to be in: Climate change and rising gas prices have trimmed margins on automobile sales and prompted a global shift among automakers to more efficient production hubs. Automakers from all around the world are flocking to Mexico to capitalize on the country’s low production costs and export-friendly environment.

The cars that roll off Mexico’s assembly lines are traveling far and wide; Only 63% of Mexican-made cars are exported to the US, and 45% of the exports are made by automakers with headquarters in Asia and Europe. “Mexico is becoming one of the best places to manufacture cars,” said Audi Chief Communication Officer Joe Jacuzzi. How did that happen?

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Obama’s big item in Mexico – student exchanges

By Andres Oppenheimer, The Miami Herald, 5/5/2013

Forget all the headlines about immigration, security and drug issues during President Barack Obama’s visit to Mexico last week: the most important (and least noticed) result of his trip may have dealt with an entirely different topic — student exchanges. Sounds boring, but it’s potentially the most exciting thing that came out of Obama’s visit: If the bilateral plan to dramatically increase student exchanges becomes a reality, it could mark a turning point in the history of U.S.-Mexican relations, and in the development of a vibrant North American economic bloc.

Right now, despite the 1994 North American Free Trade Agreement among the United States, Mexico and Canada, the level of U.S.-Mexico academic exchanges is pathetic. Only 13,700 Mexican students are enrolled in U.S. colleges, compared with 194,000 from China, 100,000 from India and 72,000 from South Korea, according to the “Open Doors’’ study of the Institute of International Education. Even Vietnam, a poor Communist country with a smaller population than Mexico’s, has more students in U.S. colleges (15,000) than Mexico, the IIE figures show.

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To read the Mexico Institute’s latest publication on this issue, click here.

Mexico’s Candidate for WTO Urges Shake-Up

The Wall Street Journal, 4/24/13

The world’s most important trade body needs a major shake-up in leadership to revive the long-dormant Doha round of global trade talks or else it will become irrelevant among newer, fleeter free-trade agreements, said Herminio Blanco, one of the candidates to take over the World Trade Organization.

Mr. Blanco, who was Mexico’s chief negotiator to create the landmark North American Free Trade Agreement and represented Mexico in the last successful global trade round that created the WTO two decades ago, told The Wall Street Journal in a recent interview that the WTO risked becoming a simple referee of its increasingly outdated rules rather than leading global trade.

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Mexico has seen little to no migration of nurses for work in the U.S. – #MexFacts

To read more about how effective management of migration across countries might help meet demand for health services, read: http://bit.ly/MigHealth

NAFTA Works: A monthly newsletter on NAFTA and related issues

Mexican Ministry of Economy, March 2013

The trade relationship between Mexico and the United States demonstrated another solid performance as products traded between both countries set a new record at $494 billion in 2012. This past year was also a success as bilateral trade saw an increase of 7.1%, one of the highest trade growth rates among the U.S.’ largest trading partners.

Over the 19 years of NAFTA, trade between Mexico and the U.S. has sextupled, growing 10% annually, a rate that exceeds that of the U.S. trade with the rest of the world (7%). The U.S.-Mexico trade is not only bigger than the GDP of Belgium, Poland or Taiwan, but is also highly integrated along a complex and dynamic supply chain that reflects the way products are traded in the 21st century.

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THIS SUNDAY on Dialogue at the Wilson Center

America’s Borders North & South

Sunday, April 7th, 10:30 am (EST)

This week on Dialogue at the Wilson Center we present a discussion of America’s borders. We begin with a look northward. Our guest is the director of the Wilson Center’s Canada Institute David Biette. We also turn our sights south to the U.S.-Mexico border with Christopher Wilson, an associate with the Wilson Center’s Mexico Institute.

Watch live stream here.

TV Broadcast: Washington, DC and national.

Mexico Envisions Nafta-EU Trade Agreement, Foreign Minister Says

Bloomberg, 3/23/2013

Mexico envisions a trade deal tying it to the European Union, U.S. and Canada as the future of transatlantic commerce and would welcome joining talks between the U.S. and EU, Foreign Minister Jose Antonio Meade said. An agreement that binds the nations of the North American Free Trade Agreement to the EU, the world’s two largest free- trade areas, makes the most sense because it would leverage the economic power of the Nafta nations, Meade said. Mexico already has a free-trade deal with the EU, while Canada and the U.S. are each negotiating their own trade deal.

Having each nation in a separate bilateral agreement with the EU wouldn’t “take full advantage of the economies of scale and scope that have resulted from Nafta,” Meade said in an interview yesterday in Washington. “We would be very willing to participate from the outset if from the outset it would be made to be something regional rather than bilateral.”

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Time to review trade relations with Mexico

San Francisco Chronicle, 3/12/2013

Since Enrique Pena Nieto’s election, the Mexican president has focused on economic growth and fighting poverty. The new Mexican administration should focus on out-competing China and other lower-cost manufacturers. The higher price of fuel has meant that goods from Asia are more expensive to ship, providing a further incentive for North American companies to source products from Mexico.

As we begin the 20th year of the North American Free Trade Agreement among Canada, the United States and Mexico, it is a good time to reflect on the seminal trade pact and how to encourage integration and foster economic growth.

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Op-ed: Taking a Nafta Approach to Immigration

By Argeo Paul Cellucci and Stephen R. Kelly, The Wall Street Journal, 3/10/2013

A bipartisan Senate proposal on immigration reform has drawn praise, including from President Obama. But a key feature of the proposal—how to handle the 11 million foreigners living in the country illegally—has provoked a familiar objection: Why grant U.S. citizenship, that most precious of rights, to those who broke the law to get here?

We believe there is a simpler, fairer and more efficient solution that won’t get bogged down in the “path to citizenship” debate. Rather, it will unlock the enormous potential of North America’s labor pool: Take the final logical step of the North American Free Trade Agreement—and allow the citizens of the U.S., Canada and Mexico to work legally in any of the three countries, making the U.S. border as open to workers as it has been for nearly two decades to goods and investment.

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With eyes on trade, Canada courts resurgent Mexico

Photo by Flickr user I.A.M.

The Globe and Mail, 2/22/2013

The Harper government has made early efforts to get close to Mexico’s new administration, led by President Enrique Pena Nieto, who took power in December. In another move to improve relations, Canada recently took steps to remove its requirement for Mexican visitors to have visas.

“One of the things we wanted to do was engage very early with the new government,” he said, noting he met with Mr. Pena Nieto in Davos when he was still a presidential candidate, and that as president-elect, Mr. Pena Nieto visited Ottawa. “We’re pleased with where [the relationship] is, but the trajectory is more important.”

“Mexico, in our lifetime, is going to be a top-10 world economy, and potentially in our lifetime, a top-five world economy,” Mr. Baird said in an interview. “It’s tremendously important, not just that we look at it through the trilateral relationship with the United States, but that bilaterally we work with them on security, on jobs, and on values.”

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