After a brief period of angst where the US government threatened to put at risk Mexico’s competitive advantage in terms of wages, the NAFTA negotiations appear to be on course to reach a happy ending. The US has presented a much more viable proposal in terms of regional content for automotive production and negotiators feel this could speed up the closing of a new deal. Regardless, investment keeps coming to Mexico as new companies establish and others expand their operations. Take a look at our recent interview with Rubén Reséndiz, General Manager of the Jalisco Foreign Trade Promotion Institute (JALTRADE) to see how this state has benefited from the industry’s growth.
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Between 70 and 80 percent of the new NAFTA 2.0 has been outlined, according to Ildefonso Guajardo, Minister of Economy. However, there are still 20 chapters to finalize before the agreement is complete.
Luis Aguirre, President of the Mexican Council for the Maquila and Manufacturing Industry for Exports (Index), said that wages should not be considered in the negotiation of NAFTA due to the economic differences between Mexico and its neighbors.
It appears, however, that the topic will no longer be an issue. The US has agreed to withdraw its proposal regarding wages, in favor of another that rises regional content to 70 percent with a five-year window or to 75 percent with a 10-year window.
Bosch will invest US$120 million in a new plant in Guanajuato to supply sensors and other electronic components to North America and eventually Latin America.
The Guanajuato Automotive Cluster keeps growing. With a US$40 million investment, the Japanese aluminum-component manufacturer MINO has set up shop in the state.
Tesla’s shares have dropped 8 percent since January after the company failed to report serious injuries in its safety briefings.
China promised to deregulate its automotive sector, eliminating restrictions for foreign investors that must find Chinese partners that own at least 50 percent of their manufacturing business in China.