The “New” Mexico
September 27, 2013
Manufacturing in Mexico has been able to turn the negative stigma the country has acquired into a positive business venture for foreign investors. Some, like Bloomberg Business Week, are coining it “the New Mexico”. Today, Mexico has developed a skilled labor force with growing prosperity. NAFTA (North American Free Trade Agreement) has aided to this success with both countries (the United States and Mexico) benefiting from the maquiladora industry in Mexico. Many U.S. manufacturers have moved their business south, leaving China, for more formidable options such as lowering costs, and close proximity to the U.S. According to the Boston Consulting Group, within the next five years manufacturing exports alone could add $20 billion to $60 billion annually to Mexico’s GDP. With China’s labor wages rising, and Mexico’s manufacturing costs continuing to be lower than competitors, it is proven to be the favorable choice for not only the United States but other foreign investors as well.
Mexico is also a large manufacturing competitor globally. Aside from NAFTA, Mexico has negotiated 44 free-trade agreements with other investors such as Japan, the European union and European Free Trade Association. Lastly, Mexico has close ties and agreements with virtually every country in Latin America, according to Bloomberg Businessweek.
Mexico’s labor force is growing at a rapid rate. Mexico is one of the largest populations in the world, with 40% of the citizens being below 20. The young, experienced working class only aids to its attractiveness that potential investors are looking for. In addition, Mexico’s unemployment rate is less than 5 percent.
Mexico has transformed over the last decade, gaining multiple benefits from the Maquiladora Industry. With the Mexican economy on a steady incline, it won’t take long for the world to recognize how strong this country is going to be.