During the days when the North American Free Trade Agreement was being negotiated. Mexican economic officials were hoping that the accord would increase the value of products made in their country and sold to the rest of world to a value of ten billion dollars monthly. Today, almost twenty years after becoming signatory to the NAFTA, the Mexico export economy generates US 1 billion in sales every twenty four hours.
According to an article published in the Financial Times, Mexico’s prestigious Monterrey Institute of Tecnnology (ITESM) has identified eight sectors of the Mexican export economy that have fueled the county’s ascendency to the ranks of the world’s most prolific exporters. Beyond their present dynamism and value, these areas of economic activity also hold future promise. According to ITESM research, they are comprised of:
- minerals processing
- tourism services
- metals processing
Prior to having risen to become a manufacturing power, the main source of Mexican export revenues had been the extraction and export of crude oil by the national petroleum monopoly, PEMEX. The Mexico export percentage that is composed of manufactured goods has recent to approximately eighty percent in recent years. Not only the quantity and value of the goods that Mexico sells outside its national boundaries risen, but quality has also soared. Whereas, at one time, manufacturing in Mexico consisted of the high-volume assembly of goods at low-cost while utilizing low-skill, in 2012 seventeen percent of the Mexico’s GDP was composed of high-tech exports. Among the items symbolic of Mexico export success are the volume and value of parts produced for the global aerospace industry. Investment in this sector has been grown by an annual twenty percent over the last decade.
In additon to aerospace production, Mexico has risen to be a major exporter of automobiles. Guanajuato, once famous for the product of its silver mines, has become a magnet for foreign investment for its rapidly expanding automotive industry cluster. Since 2006, almost eight billion dollars have been funneled into plant and equipment to build passenger vehicle in Guanajuato. This influx of capital has resulted an increase in production at a rate of eighteen percent during the period January – August of this year.
At present, only South Korea and Germany export more hi-tech produt as a percentage of overall GDP than does Mexico. The Mexico export economy’s overseas sale of such items exceeds that of both the United States and China, when the same measure is considered.
Read the primary source for this post at the Financial Times.