Nearshoring: A New Opportunity for Mexico

As a result of the crisis generated by the COVID-19 pandemic, the flow of supply chains from Asia, especially from China, was seriously affected. Several countries in the Americas, especially the United States, have been hit hard. The vulnerability of this phenomenon, known as offshoring, was highlighted, especially when there is exclusivity on suppliers and they are located in the same country.

Given this reality, the scenario would seem to be ideal for manufacturers from different parts of the world to move their production to our country because of its proximity to the United States. This strategy, known as nearshoring, seeks to optimize supply chains and improve shipping costs, which have risen sharply due to increases in fuel prices related to the war in Ukraine.

In the words of Mauricio Claver-Carone, president of the Inter-American Development Bank, “This should be the golden age of investment in Mexico.” According to IDB estimates, Mexico could increase its exports with nearshoring by more than $35 billion a year.

Despite government policies that inhibit and scare off investment, Mexico has great potential to take advantage of nearshoring because of its low labor costs; the United States-Mexico-Canada Agreement; and fast-supply chains, especially in the automotive industry. The increasingly conflicted relationship between the huge Asian country and our powerful neighbor to the north offers a more than propitious moment to side with China over the U.S.

We know that more than 45% of import suppliers originate in the country of the Stars and Stripes; 30% come from China, Japan, Germany and South Korea, which today, due to geopolitical conditions, could be optimized, especially if we think about the opportunities offered by the trade agreement we have with the United States and Canada.

In order for our country to take advantage of the opportunity offered by this situation, it is necessary to create an environment of certainty for companies that are moving their production plants from Russia and China. If Mexico takes advantage of this opportunity, it could improve its current level of economic growth and thus achieve better levels of development.

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About Patricia Simoni 111 Articles
I first edited and translated for Watching America from 2009 through 2011, recently returning and rediscovering the pleasure of working with dedicated translators and editors. Latin America is of special interest to me. In the mid-60’s, I was a Peace Corps volunteer in Chile, and later lived for three years in Mexico, in the states of Oaxaca and Michoacán and in Mexico City. During those years, my work included interviewing in anthropology research, teaching at a bilingual school in the federal district, and conducting workshops in home nursing care for disadvantaged inner city women. I earned a BS degree from Wagner College, masters and doctoral degrees from WVU, and was a faculty member of the WVU School of Nursing for 27 years. In that position, I coordinated a two-year federal grant (FIPSE) at WVU for an exchange of nursing students with the University of Guanajuato, Mexico. Presently a retiree, I live in Morgantown, West Virginia, where I enjoy traditional Appalachian fiddling with friends. Working toward the mission of WA, to help those in the U.S. see ourselves as others see us, gives me a sense of purpose.

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