Manufacturing In Mexico Gains From Haulage Dispute Resolution

Manufacturing In Mexico is poised to improve Mexico’s export advantage, continuing its overall expansion as a near shore provider.  In addition, China (the #1 exporter to the U.S. market) continues to feel any manufacturer in Mexico nipping at its’ heals as Mexico pushes deeper into the #2 position.  Why is this occurring?  In part, due to ongoing growth of overall manufacturing in Mexico.  But also Mexico’s gains will accelerate due to the haulage resolution leftover from the U.S. NAFTA violation that lasted 16 years.

Two factors fuel the Mexican edge:

  1. Mexican trucks will now be allowed to deliver to their destination within the U.S. instead of having to be reloaded for delivery by American trucking companies.
  2. More border crossings have been opened between the two countries—three last year—with two more under construction and two more to be built in the future.

The above factors will facilitate faster and cheaper border crossings, allowing manufacturing in Mexico to control costs and gain an edge over Chinese high-distance, higher-cost transportation.  Plus, since America’s previous violation of the haulage section of NAFTA, Mexico has gotten savvy, using ‘surgical retaliatory tariffs’ targeted for imports into U.S. legislative districts (up to 45%) that had pushed for the violation.  As such, according to former Undersecretary of Mexican Trade Luis de la Calle, manufacturers in Mexico have learned to flex their ‘negotiating muscle’ and will likely continue their assertive prowess.

Source: http://www.economist.com/node/18958982


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