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U.S.- Mexico Co-Production Should be Embraced

In an article recently penned by Brookings Institute researchers Joseph Parilla and Alan Berube, the authors assert that “If there is to be a “manufacturing renaissance” in the United States, it needs to embrace Mexico as a partner rather than a competitor.” The basis for their making this statement lies in the fact that an increasing percentage of products that are consumed in North America, and exported to the rest of the world owe their existence to the vast volume of U.S. – Mexico co-production that takes place in a number key industries.

In a seeming recognition of this reality, Vice President, Joe Biden, will soon lead a group of high level cabinet members to engage Mexico’s President, Enrique Pena Nieto, and high ranking members of his government’s economic policy team in talks aimed at setting the tone for future bi-lateral cooperation and coordination.

According to the Brookings scholars, the result of U.S. – Mexico co-production is that consumer goods have become more price accessible for citizens of both countries, and that items produced using a mixture of labor and capital from the two nations are more competitive on the global stage. This increased competitiveness of North American exports to the rest of the world has important ramifications for the domestic economies of both countries.

U.S. – Mexico co-production not will not only fuel the internal growth of each partner economy, but will also enable both to work together to compete for income outside of the North American free trade zone. Present conditions such as increasing production and transportation costs in China, as well as the geographic advantages that accompany proximity to a large and growing consumer market seem to justify the need for the High Level Economic Dialogue (HLED) that will soon take place between U.S. and Mexican policymakers.

The full original article can be read at the Brookings Institute.

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This quarterly publication will be populated with content that is useful and relevant to readers that are contemplating Mexico investments, have operations already within the Republic, as well as to other individuals that have an interest in Mexico and its manufacturing sector.