August 03, 2020

FreightWaves Quotes Ashley Craig on the Possibility of Asian Nations Relocating Industry Supply Chains to Mexico

2 min

On August 3, 2020, FreightWaves quoted Ashley Craig on the possibility of Asian nations relocating industry supply chains to Mexico.

According to the article, as the coronavirus pandemic continues and United States-China trade relations stall, Mexico has been approaching Asian countries — such as Japan — about investing in Mexico.

Mexico is the host nation for the upcoming annual meeting of countries in the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership (CPTPP) trade pact. The CPTPP is a free trade agreement that aims to reduce tariffs and trade barriers among its 11 member countries, a trade bloc connecting 500 million people and economies with a combined GDP of more than $10 trillion.

In July, Mexico economy minister Graciela Márquez told Reuters that she has been speaking with Asian companies, particularly steelmakers, about investing and locating operations in Mexico. She pointed out that the new United States-Mexico-Canada Agreement (USMCA) makes Mexico a favorable location for supply chains.

"With the continuing decrease and deterioration in the U.S.-Sino relations in general, especially on trade, coupled with 24 months of constant U.S. tariff action countermeasures from China, I’m not surprised once finally inking USMCA that someone like a Mexican official would come out and say, 'Hey, you know what, we’re a pretty solid Plan B here for you,'" said Craig.

Craig said some caveats for Asian countries offshoring in Mexico could be that there are still some parts of the USMCA that need clarification, but more industry supply chains moving to Mexico could be an attractive option.

"It's not limited to any particular sector as well: those industries that have built up supply chain sourcing operations over the past, arguably 20 years that are predicated on a China platform. Theoretically, everything’s in play," Craig said.

Click here to access the article.