Mexico and China look to trade away old rivalry

Mexico + ChinaAs top suppliers of manufactured goods to American market, China and Mexico have typically been in direct competition over the past decade. More often than not, the business went to China. But with labor costs rising there and Mexico pushing for new access to Chinese consumers, the rivalry is shifting, the economists and trade analysts say. No longer pure competitors but not quite partners, the two countries are moving toward an expanded trade relationship could ultimately benefit the United States by boosting U.S. exports and keeping cheap imports flowing to U.S. consumers. Mexican President Enrique Peña Nieto’s recent trip to China, coming just four months into his term, has been viewed here as a smart overture aimed at mending ties between two nations that have often been at odds over trade issues. Mexico resisted China’s entry into World Trade Organization in 2001, and its share of the U.S. import market started slumping soon after. Now that trend is in reverse. Mexico accounts for a growing portion of U.S. imports, China’s slice of the $2.7 trillion market has narrowed. Those tendencies are likely to continue, economists say, as several new studies show that Mexican manufacturing costs are now lower than China’s when factors such as shipping and energy prices are taken into account. “They started out as rivals, because there was a bull rush to China and Mexico lost out,” said Barry Lawrence, director of the Global Supply Chain Laboratory at Texas A&M University. “But Mexico is now the more competitive of the two.” “That implies direct competition, but the reality is that the two will be looking at building optimal supply chains,” Lawrence said. “There will be a lot of business in China, but a lot of it will come through Mexico.” Items such as washing machines, cars, computers, farm equipment can start as components in China that are assembled in Mexico and finished in the United States before reaching American consumers. If companies can take advantage of each country’s manufacturing strengths, the result will be quality products at lowest-possible prices, analysts say. ‘Enormous opportunity’: United States and Mexico can find new fuel for economic growth and help each other reduce their gaping trade deficits with China by working together to sell more goods to swelling Chinese middle class (…..)

Link: http://www.washingtonpost.com/world/asia_pacific/mexico-and-china-look-to-trade-away-old-rivalry/2013/04/17/d001c432-a2ec-11e2-bd52-614156372695_story.html

Acerca de ignaciocovelo
Consultor Internacional

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