The governors of Arizona, Minnesota, and Texas lobby for the continuance of the NAFTA, due to the benefits that their states have gained from the trilateral trade agreement.

The threat to the continuance of the NAFTA under the administration of Donald J. Trump is still present. However, the probability that the United States will suddenly exit from the world’s largest free-trade accord has been steadily diminishing.  This is the case because negotiating teams from each of the countries are busy at work concretizing mutually agreed upon features.   The possibility that the United States will leave the North American Free Trade Agreement is less likely at present than it was a month ago. This is so even though there could be some points of disagreement in the negotiations that could continue to threaten the accord.  To optimize their positions for bargaining between the 6th and 7th rounds of discussions, the government representatives from Mexico and Canada recently met with key stakeholders in anticipation of the seventh round of talks in the city of Montreal on February 27th, 2018.

State Officials in the US are in Favor of a Continuance of the NAFTA

The most recent meeting at which Canadian and Mexican trade officials have exercised their joint lobbying activities for the continuance of the NAFTA was at the winter gathering of governors from most of the US states.  Both countries were able to participate in meetings with thirty-three of chief state executives that were in attendance. Representatives from these entities met with President Donald J. Trump and Vice President Mike Pence on Monday, February 26 and Tuesday, February 27, 2018 to voice their support for the continuance of the NAFTA.

Particularly, the governors of Arizona, Minnesota, and Texas expressed their wish that the United States continues to be a party to the NAFTA trading bloc.   Doug Ducey, Arizona’s chief executive, communicated that Arizona desires “more trade than less” with its neighbors to the north and south.  In anticipation of the meeting with the President and Vice President, Ducey participated in meetings with Canadian and Mexican government officials.  He expressed his wish that the agreement be renegotiated with Carlos Manuel Sada, Mexico’s undersecretary for North America, and with government representatives from Canada’s two largest provinces, Quebec and Ontario.  During their meetings, Ducey cited the fact that five percent of Arizona’s jobs depend upon continued trade with its southern neighbor, Mexico.

As for backing of the continuance of the NAFTA by government leaders from the State of Minnesota, Governor Mark Dayton pointed to the success that Minnesota companies have had in gaining access to export sales to Mexico’s agricultural and manufacturing sector.   In a communication to US President Donald Trump, Dayton voiced his constituents’ support for the continuance of the NAFTA and urged that the US government successfully bring negotiations to an end in a “timely manner.” Minnesota-based commercial exchange with Mexico and Canada reached a total of US$ 6.4 billion in 2016.

United States Mid-Terms and the Continuance of the NAFTA

NAFTA negotiators are aiming to bring treaty talks to a successful close before the United States mid-term elections take place this November.  In addition to Arizona, Texas, and Minnesota, other states entities such as North and South Carolina, Pennsylvania, Ohio, Michigan, Wisconsin, and Nebraska have strong ties with both Canada and Mexico.  Republican congressmen and senators in these states will be pushing the current administration for a continuance of the NAFTA.

A Significant Effort to Influence Discussions

During the course of 2016 and up to the present day, trade groups in Mexico have held approximately two hundred and fifty meetings with individuals and groups that are able to pressure the US administration to back a continuance of the NAFTA.  Eighty of these gathering have been with congressmen, 35 have been with administration officials, 75 have been with representatives of the private sector, and sixty have been with governors.

The negotiating team from Mexico desires that negotiations be successfully concluded prior to their presidential elections that will take place in July of this year.  Even though progress has been slowly gained, each party to the dialogue has recently expressed that the progress related to the technical chapters of the accord has been positive. While on a political level, however, exchanges, especially between the US and Mexico, has been lacking.  A recent contentious discussion between Mexican President Peña Nieto and President Trump is illustrative of this point.

To the contrary of the situation in Mexico, the governments in Ottawa and Washington believe that there isn’t a need to wrap up the agreement renegotiation soon.  This is the case mostly because the United States does not want the talks to take place during the US mid-term election campaigns.

Because of the way that the North American Free Trade Agreement has benefited the United States’ economy (especially in the agricultural sector), it is reasonable to conjecture that the US will not pull out of the agreement and endorse a continuance of the NAFTA.

The Canada, Mexico and the US are making efforts to make certain that the NAFTA renegotiation talks move along at an accelerated clip. This is because the three partners to the meetings are all attempting to finish the renegotiation of the accord prior to Mexico’s elections at the beginning of July. The Mexican news outlet, Notimex, has recently reported that talks may be finished as early as 15^th of May.

Luis Videgaray, the Mexican Secretary of Foreign Affairs, and Ildefonso Guajardo, the Secretary of Economics, have recently met with their Canadian and US counterparts in an effort to speed the pace of the NAFTA renegotiation talks.  The biggest point of contention in the talks has been related to the chapter of the NAFTA that concerns itself with the rules of origin for the automotive industry.  Last week Secretary Guajardo presented a counterproposal to those made by the United States negotiating team which would define automobiles assembled within the trading bloc as “NAFTA originating,” if they are composed of seventy-five percent of regional content. Both Canada and Mexico have asserted that they both believe that this percentage is too high.

In addition to proposing 75% regional content for originating product, the US has also suggested that forty percent of light vehicles and forty-five percent of pickup trucks be manufactured in geographic locales with salaries equal to US $16 and above.  Mexico proposed that the regional content for automobiles assembled in North America be 70% and that it be phased in over a ten-year timeframe.  US trade personnel, however, rejected this suggestion at the NAFTA renegotiation talks.

In addition to the automotive industry issues, NAFTA renegotiation talks have been a challenge due to other points of difference.  Among them are details concerning access to markets in the agricultural sector, the “sunset” clause for the NAFTA agreement and, also, Chapters 11, 19 and 20 of the treaty which deal the resolution of conflicts between the three trading partners.

In addition to the aforementioned points, other subjects of NAFTA renegotiation talks include:

• Technical Obstacles to Commerce
• Administration and Transparency
• Health
• Small and Medium-Sized Business
• Information Infrastructure
• Corruption
• Border Trade Infrastructure Improvement
• Regulatory Practices
• Digital Modernization
• Agriculture
• Intellectual Property Protection
• Government Purchases

Although progress has been made on many fronts, some international trade watchers are of the opinion that if the most contentious issues of the NAFTA renegotiation talks are not agreed upon, the result will be a North American Free Trade Agreement that is neither dead or alive.  Some are calling such a scenario a “Zombie” NAFTA.

Remember, interested parties can receive Mexico manufacturing information on a weekly basis by SMS Texting the word Tecma to 96000

The EU-Mexico Free Trade Agreement that was signed in 1997 has been updated and re-engineered recently to demonstrate a commitment to greater trade and commerce between Mexico and the European Union. The announcement of the altered trade accord between the two economic parties was made on April 21, 2018.

Mexico is the second largest Latin American trading partner with the EU, after Brazil. Total combined trade between Mexico and the EU currently stands at a grand total of € 79 billion. This number breaks down into € 19 billion in services and € 62 billion in goods. With the updated EU-Mexico Free Trade Agreement and the further economic opening of the two trading partners, these figures are expected to significantly expand.

The new EU-Mexico Free Trade Agreement (FTA) is of key importance for Mexico in that it is a part of the country’s strategy to decrease its dependence on trade with the US.
With respect to a greater volume of bilateral trade in agricultural products, the EU-Mexico Free Trade Agreement defines plans for the trading partners to work together to maintain strong health and safety standards for food commodities. Both the EU and Mexico have agreed to allow the other to maintain the prerogative of establishing the levels of protection and intellectual property protection measures that they consider to be reasonable for the items that are traded.

Also, one of the central features of the updated and new version of the EU-Mexico Free Trade Agreement is the elimination of 99% of the duties that are applied to items that enter into the countries of each of the parties to the agreement. Although tariffs for the bulk of manufactured goods traded between the two partners were lowered and fully removed by the 1997 agreement, duties have remained in effect for farming products. For example, under the updated EU-Mexico Free Trade Agreement, tariffs will be fully eliminated on products such as chocolate, asparagus, pasta, and confectionary goods, in addition to cheese, apples and canned peaches, pork and pork products, and dairy. Also, phased out under the new EU-Mexico Free Trade Agreement will be tariffs and duties that are presently in place for poultry products. For the remaining 1% of products that are traded and still dutiable under the agreement, greater access to both parties’ economies will be the result of setting new, more liberal, quotas.

In terms of the trade in industrial products between the two parties to the updated EU-Mexico Free Trade Agreement, both the European Union and Mexico have both agreed to reduce the regulations and rules that are involved in the import and the export of such items. Although most of the tariffs that were attached to industrial goods were removed as a result of the applied provisions of the 1997 agreement, many of the technical requirements of each of the parties to the agreement remained in place. The new Free Trade Agreement sets the harmonized technical rules for the commerce in industrial goods. This will make it easier for all parties to import and to export such items in a more economical, competitive and effective way.
In addition to further eradicating duties, the new EU-Mexico Free Trade Agreement includes commitments to protect the environment and to protect workers’ rights. With respect to the former, both the EU and Mexico reaffirm their cooperation in battling climate change and in transitioning to economies that reduce carbon emissions.

Among the other changes that have been put into effect by way of the new Mexico-EU Free Trade Agreement, is the facilitation of the bidding for government contracts in the territory of both parties. Going forward it will be easier for EU firms to bid for Mexican government contracts and vice versa.

Some of the other key features addressed by the updated EU-Mexico Free Trade Agreement include pledges aimed at:

• Encouraging investment in an environment that is transparent for businesses;
• Offering new rules in the services sector;
• Making the rules for trade enforceable through a State-to-State trade mechanism;
• Setting rules for digital trade;
• Ensuring stability and fighting corruption;
• Establishing better protections for innovations and creative work;
• Preventing traditional food products from imitations;
• Focusing on the needs of smaller businesses.

Remember, interested parties can receive Mexico manufacturing information on a weekly basis by SMS Texting the word Tecma to 96000.

In order to be successful, companies that manufacture within the borders of Latin America’s second-largest economy must be knowledgeable regarding the requirements for importing goods into Mexico.  Although much has been done in recent years to simplify the process, those that are importing goods into Mexico must know the applicable rule in order to avoid complications that may include delays and fines.

Those that are importing goods into Mexico must remember that:

1. A Mexican Customs Broker is needed when importing goods into Mexico. Contracting with a party that is fully knowledgeable about Mexican customs rules and procedures will ensure smooth international transactions.

2. It is necessary to present import documents (pedimentos) to Mexican Customs Authorities. The pedimento is one of the most important trade documents when importing into Mexico. It must be filled out by a Mexican customs broker and must contain the following:

– Certificate of weight and volume;
– Commercial invoice;
– Certificate of origin.
– Identification (This may include part numbers, brand information, and serial numbers).

The Mexican pedimento, when filed by those importing goods into Mexico, signifies that the good or goods have entered the country legally.

3. The item or items imported into Mexico must be classified using the Harmonized Tariff Code System (HS Code). This is an international system that assigns a specific code to an item or items. This assignment allows customs brokers to identify requirements that apply or tariffs that must be paid when importing into Mexico.

4. A Certificate of Origin is needed to verify the source country of the item or items that are being imported into Mexico. It is absolutely essential that this document is presented to Mexican Customs for without it the good or goods will be denied entry.

5. Parties to import trade must be registered in Mexico’s Official Register of Importers. This is important because enrolling in the Register is the process by which those importing into Mexico is recognized by the Mexican Tax Authority or SAT. The SAT is part of Mexico’s Secretaria de Hacienda y Credito Publico (SHCP). The SHCP is the Mexican equivalent of the IRS.

It is also fundamentally important to note that when importing goods into Mexico from the US and Canada, a NAFTA Certificate of Origin must be presented.

All companies importing into Mexico are required to follow the five requirements listed above. Stand-alone companies in Mexico must have the expertise on staff to deal with these and other important Mexican Customs issues. Companies that operate in Mexico under the auspices of a shelter company, however, do not have to become directly involved in dealings with Mexican customs when importing goods into Mexico. Shelter companies employ the services of Mexican customs brokers or have them on staff. These parties work on behalf of shelter company clients.

Remember, interested parties can receive Mexico manufacturing information on a weekly basis by SMS Texting the word Tecma to 96000.

The protection of intellectual property in Mexico consists of five different categories. They are:

The Patent – Any person that creates an invention, an industrial design or the model of an invention has the right to exploit it for personal or company gain. However, the only way to make sure of their exclusive use is to apply for and to obtain a patent. Patents that protect intellectual property in Mexico are given out by Mexico’s Patent and Trademark Office. According to the law for the protection of intellectual property in Mexico, patents are valid for a period determined by the Patent and Trademark Office. When the patent sunsets, competing individuals and companies can begin the production and sale of similar products.

The Registry – The registry works in a way that is similar to the patent but, according to intellectual property protection statue in Mexico, it is directly applicable to industrial designs or to utility models. The registration can also refer to the process that is enacted before the Mexican Intellectual Property Institute IMPI). The IMPI is the only agency in Mexico that can regulate those considerations that are related to intellectual property in all of its forms and manifestations.

The Invention – The law for the protection of intellectual property in Mexico does not strictly define this term. However, it does enumerate those things that are not looked upon as being inventions. Those items include:

• Scientific or theoretical principles;
• Natural items;
• Any business method or plans;
  Software:
• Forms of information used in presentations;
• Literary or artistic creations;
• Treatments for medical conditions.

The Utility Model – The law for the protection of intellectual property in Mexico defines a utility model as an object, tool, device or utensil that arises as a result of the modification of an existing one. This is applicable when the item can be used for more purposes than the original. The registrations that can be obtained for utility models is for a period of that is limited to ten years. There is no extension option available.

The Industrial Design – Any element that is newly made, that makes a significant improvement in the way of executing any activity is an industrial design. Industrial designs can be of two kinds. They are:

• Industrial drawings that noticeably improve the design of anything;
• Industrial models that are three-dimensional and scale models that accurately represent new items.

Steps to take for the protection of intellectual property in Mexico

1. Inform the Mexican Intellectual Property Institute (IMPI) of the need to achieve registration through an application for a patent. This can be done in person or done by an authorized legal representative. The submission of a patent must be presented for each discovery or creation.
2. Add documents that explain the creation of the patent detailed terms. This can include the Chemical or physical elements that it is comprised of, the steps included in its operation, and any specific characteristic that is required in its development, creation, or use.
3. Include all the descriptions, drawing, and diagrams with the granting of a patent.
4. Include any other document or requirement that the Mexican Intellectual Property Institute may request to proceed with granting of a patent.
5. Wait one hundred and eight days until the results of the study that is carried out by the IMPI is known.

After each of the steps in the process for securing intellectual property protection in Mexico, the issuance of the license by the IMPI will contain information regarding all rights and obligations that must be covered by the creator or inventor. The inventor or the creator of a licensed invention must also report if a patent for the item has been sought out in another country. The date on which the request for the patent was first made should be reported. The patent application for the protection of intellectual property in Mexico should not require more rights than those specified in the first country in which the patent was applied for and obtained. Finally, applications for patents in Mexico that seek and obtain certain additional rights must wait to be considered, although they will not be given priority over any other process.

Remember, interested parties can receive Mexico manufacturing information on a weekly basis by SMS Texting the word Tecma to 96000.

Aerospace manufacturing in Baja California is one of the main areas of economic growth and expansion for the West Mexico state.  During the years 2014 through 2017, the aerospace industry ranked 4^th in the attraction of foreign investment dollars (FDI).  Approximately US $208 million dollars in FDI flowed into the sector. The industries that garnered more foreign direct investment dollars during those years than aerospace manufacturing in Baja California included passenger vehicles, energy, trucks and tractors, and passenger vehicles.   Data from the Economics Ministry of Mexico demonstrates this.

One of the most recent investments made in the Baja California was a nine million dollar investment by the US firm Kern Engineering and Manufacturing.  Kern will engage in the production of aircraft parts for engines, as well as for space-related technology in its facility in the US – Mexico border city of Tecate.   The company projects that it will create three hundred and fifty positions in its first year of operations and expects to experience significant growth within its first 5 years of its initiation of activity.  The company is one of 5 suppliers to the aerospace industry that maintains a presence in the city.

Beyond the aerospace manufacturing in Baja California, the industry in all of Mexico is approximately 16% more competitive in costs when looked at side by side to the same sector in the US.  Mexico has also enhanced its competitiveness in recent years because of training programs that have been implemented for its workforce. In addition to a growing pool of skilled labor in Mexico, other benefits that are enjoyed by firms that conduct manufacturing activities in aerospace manufacturing in Baja California, as well as other production centers in the country ( these include Queretaro, Nuevo Leon, and Sonora, for example) include location in a highly beneficial geographic location and a network of numerous Mexican free trade agreements (FTAs)  that places manufacturers in Mexico in a preferential access to vis a vis lucrative world markets.

According to Mexico’s FDI promotion agency, Pro Mexico, the sector that includes aerospace manufacturing in Baja California, as well as in the other areas, is characterized by a wide variety of actives.  Mexico’s aerospace industry is made up of firms that manufacture, maintain, repair, engineer, design, and test aircraft parts for both military and commercial use.

Mexico developed itself to be a formidable country in the aerospace manufacturing sector by 2016.  From 2010 through 2016 the country’s industry exports increased by an average fourteen percent every year.  Exports were approximately US seven billion dollars, while imports were a bit below US six billion dollars.  This means that, in its entirety, Mexico had a trade surplus in the aerospace industry of just over US one billion dollars. Also, during this period of significant growth in the aerospace industry in Mexico, Queretaro received of 47.9 percent of foreign investment in the sector.  Aerospace manufacturing in Baja California attracted just under 14% percent, while Chihuahua was the recipient of 11.2 percent of total industry investments in the country.

The goal that state officials have for aerospace manufacturing in Baja California in 2018 is to attract US $1.5 billion dollars of foreign direct investment to the industry.  This number is a bit above the US $1.4 billion that the sector received in the previous year.  Currently, 90 firms in the aerospace industry have a presence in the state of Baja California as a whole.   These manufacturers employ a total of thirty-three thousand jobs.  It is expected that Baja will see an annual ten percent growth in its industry each year.

In addition to capturing new foreign investment, aerospace manufacturing in Baja California has expanded significantly through the growth of companies with existing facilities in the entity.  Both Esterline and Hutchinson Aerospace announced significant plans for growth at the 51^st Paris Airshow in 2017.    Esterline made a commitment to grow its workforce of approximately 1000 by three hundred individuals.  This would represent an additional investment by the company of US $35 million dollars.  The funds would be used to expand its ability to supply its aerospace customers with more sensors, connectors, and plastic molded parts.

In the case of the French manufacturing of aerospace parts, Hutchinson, the firm has stated that it would invest US forty million dollars over a period of 5 years.  With this new influx of capital, the company will boost its capacity to build aircraft anti-vibration and sound dissipation systems.

In addition to Esterline and Hutchinson, the San Diego-based manufacturer, Spectrum, stated that it would initiate a project to manufacture an executive jet, the S-40, in the city of Mexicali, Baja California.

Remember, interested parties can receive Mexico manufacturing information on a weekly basis by SMS Texting the word Tecma to 96000.

The value of Mexican exports of steel and aluminum to the United States is approximately US $2.8 billion at present.

Recently, the Trump administration has placed duties on steel and aluminum that is imported into the United States.  While steel coming into the country will be charged a twenty-five percent tax, aluminum will see a duty rate of ten percent rate.  However, Mexican exports of steel and aluminum, as well as Canadian exports, have been given an exemption.  Mexico benefits in two ways as a result: (1) it gains time to improve its negotiating position vis a vis the North American Free Trade Agreement, and (2) it provides the means by which to better promote the well-being of the nation’s steel sector.  US aluminum and steel purchases from Mexico represent less than one percent of the latter country’s gross domestic product (GDP).  Only South Korea and Canada surpass Mexico’s steel exports to the US market.

In response to the exemption of Mexican exports of steel and aluminum from US import taxes, Luis de la Cruz, the leader of Mexico’s Institute for Industrial Development and Economic Growth, (IDIC) states that “because of the exemption of Mexico from these newly implemented tariffs, the health and integrity of the Mexican steel sector will be maintained.”  He also pointed out that the “exemption of Mexican steel from new taxation will also help to maintain high levels of certainty in the Mexican automotive industry.”  According to de la Cruz, it is probable that the exemption of Mexican exports of steel and aluminum from the US imposed import duties will be an indefinite one.

Reports on the subject have stated that among the nations that will most likely feel the greatest adverse effects of the new levies are the Gulf States, and, in particular, Bahrain.  Bahrain ships significant amounts of aluminum to the United States.  The recently imposed levies will also be felt significantly by smaller market nation’s that manufacture steel for export such as Vietnam and Taiwan.  In general terms, because commercial trade with these nations is limited, the impact on the US will be negligible.

The Beneficiaries of Mexican Exports of Steel and Aluminum Tariff Exemption

In addition to Mexican national firms, manufacturers of steel with operations in Mexico will also benefit from the exemption.  Domestic producers of the metal include firms such as Altos Hornos de Mexico, Ternium and Tamsa.  The Brazilian firm, Gerdau, is present in the country.  Aluminum and steel that is produced in Mexico by both foreign and domestic companies go to the automotive vehicle and construction industries.  It is also used in the manufacture of machines for the electrical and electronic equipment industries and the metal mechanics industry.  Mexico sends US $1 billion worth of steel and US $1.8 billion of aluminum to the United States.  Products that incorporate steel from Mexico into their production processes also represent an additional US $6 billion in value.

How will the automotive industry be affected by the exemption of Mexican Exports of Steel and Aluminum?

For a large part of the Mexican automotive industry, the nation is a net importer of specialized steel that is used in the production of high-technology auto parts.    This is so because these items have strict technical and quality requirements that US manufacturers can meet.  These specialty metals have certain characteristics of strength and purity that is specific to advanced quality auto parts and is important to overall product safety and quality.   With respect to these items, Mexico has a trade deficit with the US of $7 billion.  This means that, in overall, Mexico imports almost as much steel into its country as it sells to the United States.  In addition to sourcing special steel from American vendors, Mexico also, to a lesser degree, obtained this class of product from companies in Japan and in South Korea.

Not a new state of affairs

This most recent imposition of duties on steel is not the first time that the United States government has levied such taxes.  Most recently, a similar measure was taken in 2002 by George W. Bush’s administration.   Tariffs were imposed beginning March 5, 2002 and were removed on December 4th of 2003. This was because research by the United States International Trade Commission (ITC) has shown that, up to that juncture, the tax that the US had levied on steel resulted in a loss of US $386 million.

Remember, interested parties can receive Mexico manufacturing information on a weekly basis by SMS Texting the word Tecma to 96000.

Former commanders of the U.S. Northern and Southern Commands endorse continued participation in the NAFTA by citing the importance of the agreement to the nation’s national security.  Read the text of the message below:

The Honorable Donald J. Trump
The White House
1600 Pennsylvania Avenue, NW
Washington, DC 20500

Letter to President Trump on NAFTA by former SOUTHCOM and NORTHCOM Commanders

Dear Mr. President:

We join you and all Americans in supporting a secure and economically vibrant United States.  The North American Free Trade Agreement (NAFTA) directly supports these goals. As you
negotiate to update NAFTA, we encourage you, as former Commanders of U.S. NORTHERN Command and U.S. SOUTHERN Command, to strengthen U.S. commitment to the agreement
itself.

Effective pursuit of U.S. security and economic interests depends on partnership with those nations that share our borders, Canada and Mexico. While contributing to economic growth,
NAFTA has also established a framework of trust among all three parties, leading to close cooperation to address a range of pressing concerns including drug trafficking, terrorism, cyber
security, organized crime, and migration. These issues are regional, with criminal and terrorist networks operating beyond the borders of any one country; they require regional responses.
Without NAFTA, cooperation with our North American neighbors will be less likely, weakening our ability to confront security challenges. And in a broader sense, recommitting to NAFTA
would reassure Canada and Mexico and our allies globally that they can continue to depend on U.S. commitments, particularly as China becomes increasingly assertive.

Economically, NAFTA was designed to increase trade and investment among its three parties; promote North American economic competitiveness; and support a vision of open market
democracy for Mexico providing that nation with a clear path toward political and economic development. It has succeeded.

U.S. trade in goods and services with Canada and Mexico increased from $307 billion in 1993 to well over $1 trillion by 2017, under a rules-based framework of predictability. More than 40
U.S. states now count either Canada or Mexico as their top export destination. Withdrawing from NAFTA would reduce U.S. competitiveness and depress U.S. growth, costing Americans jobs in
the real economy.

Even so, Mr. President, NAFTA is far more than a trade agreement – it is a core aspect of our national security. We respectfully ask you to update and strengthen the agreement on a mutually beneficial basis, while ensuring it remains a part of the U.S. strategic arsenal for many years to come.

Sincerely,

General Bantz J. Craddock
Commander, SOUTHCOM (2004-2006)

General Douglas M. Fraser
Commander, SOUTHCOM (2009-2012)

Admiral William E. Gortney
Commander, NORTHCOM (2014-2016)

General James T. Hill
Commander, SOUTHCOM (2002-2004)

Admiral Timothy J. Keating
Commander, NORTHCOM (2004-2007)

General Barry R. McCaffrey
Commander, SOUTHCOM (1994-1996)

General Victor E. Renuart
Commander, NORTHCOM (2007-2010)

Admiral James G. Stavridi
Commander, SOUTHCOM (2006-2009)

General Charles E. Wilhelm
Commander, SOUTHCOM (1997-2000)

Admiral James A. Winnefeld Jr.
Commander, NORTHCOM (2010-2011)

In addition to its place as the home of the first automotive university in Mexico, Queretaro is also the location of other high-profile industrial training and educational facilities.

The first automotive university in Mexico has recently initiated its operations inside of Queretaro’s Polytechnic University (UPQ).  The educational and training facility will be linked to that educational institution’s Center for Innovation and Automotive Development (CIDEA) and will be operated by the supplier to the automotive industry, Brose.  This company is headquartered in Germany and has been in Mexico beginning in 2010.  The firm produces window regulator drives, HVAC blowers, steering component motors, cooling fan motors, and several other parts and inputs to customers such as Volkswagen, Daimler, Chrysler, Ford, GM, Nissan, Honda, and Audi.

News of the inauguration of the automotive university in Mexico was recently provided by, Francisco Dominguez Servien, the governor of the State of Queretaro.  The accord to establish the facility was signed by the governor and Brose executive’s during the Governor’s visit to Germany in June of last year.

Dominguez Servien noted that a total investment of approximately US $15 million in the construction of the facility and the purchase of equipment, in his message.  When speaking about the educational institution, the governor remarked that “the automotive university in Mexico at Queretaro’s Polytechnic University will raise Mexican industry skills and will help to make the state’s vehicle sector among the most competitive in all of Mexico.”  The governor also informed that Queretaro is home to one hundred and seventy-two automotive suppliers and that these manufacturers have contributed more than 44,000 direct jobs to the local economy.   He also commented that with the presence of the inaugural automotive university in Mexico in the state, the Queretaro-based automotive suppliers could eventually employ more than seventy-five thousand workers and could contribute twenty-five percent to the entity’s Gross State Product (GSP).

CIDEA consists of a building that has three floors.  While the first two floors are dedicated to classroom instruction, the third floor of the first automotive university in Mexico serves as an incubator for business.   This facility will add to Mexico’s prominence among global automotive producers.  Today, Mexico is the 7^th largest manufacturer of light vehicles in the world and is the 4^th largest exporter of automobiles.  Only Germany, Japan and the United States send more product to overseas customers.

In addition to being the location of Mexico’s first automotive university, the state of Queretaro is also the site of a sixty-two million dollar research and development center.  The announcement of the inauguration of this facility was made in January of 2018 by Continental Automotive.  The firm has communicated that employment at its research and development center will rise to 1,100 workers in the future and that the center will develop technologies for electric cars and autonomous vehicles.  The director of Continental’s R&D center, Jorge Vazquez Murillo, recently explained that the company chose Queretaro as the location to perform automotive industry R&D due to the impressive expansion that has occurred in the state’s automotive industry over the last few years.  He also made the point that Queretaro has a significant educational base for the supply of trained and qualified employees and has the most plentiful per capita concentration of researchers in Mexico as a whole.

Lastly, beyond the Continental and Brose training and R&D facilities, Harman International also has recently inaugurated a center for design in Queretaro.  The facility will serve “to craft components for vehicle audio systems and for ‘connected car’ technology.”  The automotive supplier has established this facility to service an Original Equipment Manufacturer (OEM) clientele.  More succinctly, Mexico Now notes that “from this design center, Harman will support 8 manufacturers from Asia and North America.  Among these original equipment manufacturers are Subaru, General Motors, Lincoln, Toyota, Ford, and Harley Davidson.”

The Harman International design center commenced its operations with an initial capital injection of US $1 million.   Harman executives have communicated that more monies will eventually be pumped into the project for the purpose of installing advanced laboratories and testing facilities.  The facility occupies twenty thousand sq. ft. of industrial space in Empresalia business complex in Queretaro.  It currently employs a staff of one hundred and eighty engineers and forecasts that employment will exceed 220 individuals in the future.  At present Harman International engineers are working to test advanced and to design technical products.  These include “speakers and navigation systems, first-level amplifiers, as well as automobile communications.

In addition to the research and development facility, Harman International has a manufacturing presence in the three major Mexican manufacturing centers: Tijuana, Ciudad Juarez in Queretaro.

The presence of the Brose’s first automotive university in Mexico, as well as the R&D facilities that have been established by Harman International and Continental and secure Queretaro’s place as a leader in the country’s automotive production sector for years to come.

Remember, interested parties can receive Mexico manufacturing information on a weekly basis by SMS Texting the word Tecma to 96000.

The change in demand for light passenger vehicles produced in Mexico is leading the country’s auto manufacturers to supply more trucks and SUVs to the US market.

This past January, Fiat Chrysler Automobiles (FCA) publicly stated that it will move its manufacture of pick-up trucks once produced in Mexico to the United States.  This move appears to be the result of the Trump Administration’s corporate tax cuts, which are making the United States more competitive in the manufacturing sector.  Despite this, Mexican automotive industry manufacturers have shifted their focus from the production of light vehicles to the production of trucks and SUVs.

According to information released by AMIA, the Mexican Automotive Industry Association, in the January and February of this year six out of each ten vehicles produced in Mexico were trucks (for the most part SUVs).  Just one year earlier, the ratio of SUVs and trucks to light passenger vehicles produced was four in ten. These numbers diverge from those of ten years ago when light vehicles represented seven of every ten autos produced.   Furthermore, during the first two months of 2018, 369,349 trucks were manufactured in Mexico.  According to AMIA, this number represents a 36.5% increase over numbers recorded during the same period of 2017.

Industry experts maintain that Mexico’s change in automotive industry production strategy to a growing world demand for trucks and SUVs.  Of this type of vehicle produced in Mexico, almost a full 70% of the units sold outside of the nation are sent to buyers in the US.  At present Americans are choosing SUVs and trucks over light passenger vehicles more and more as a result of affordable and stable fuel prices.  Guido Vildozo, a senior manager that specializes in the forecast of light passenger vehicles sales in the Americas with the consulting firm IHS, asserts that the producers have “realigned the production to meet the needs of a changing market.”

During the first two months of this year, 317,357 trucks were produced in Mexico and sent to lucrative export markets This represents a more than thirty-five percent increase over 2017 figures for the same time period. Of this total, the number light passenger vehicles manufactured in Mexico was 189,711 units.  This data evidences an eighteen percent drop in production when compared to the numbers recorded in January and February of 2017.

In response to current market demands, mainly in the United States, Jeep Compass and the Chevrolet Equinox began to be produced in Mexico at the beginning of this year. As of this writing, they represent 2 of the five vehicles most sold outside of the country.  In fact, these two vehicles, along with the Honda HR-V, represent almost 31% of the export sales of this type of automobile.

Mexico has more capacity to manufacture trucks and SUVs

IHS’ Guido Vildozo explains that should conditions in the market (mainly in the US) warrant it, the capacity to manufacture more trucks and light vehicles can be increased.  He is of the belief that this is possible because “65% to 70% of the market for imports into the US is dedicated to the consumption of trucks and SUVs.”

Positive about NAFTA

Industry watchers believe the NAFTA renegotiations will reach a favorable conclusion.  If the accord is not renegotiated successfully, however, Mexican automotive manufacturers will take advantage of the large number of free trade agreements that Mexico has negotiated over the course of the past two decades to continue to export vehicles to world markets.   Most notably Mexico has free trade accords with every of the country in the European Union. Also, it is noteworthy that the country currently has a free trade agreement with Japan.  Mexico is seeking to cut similar trade deals with other nations in the region as well.

Presently, Mexico is the 8^th largest global manufacturers of automobiles and the third largest producer of vehicles in the West.  According to Wikipedia, “forty-two automakers have official representation in Mexico with four hundred different models.”  These numbers make Mexico “one of the most varied automotive markets in the world.”

As a sign of continued expansion and growth, a number of automotive plants opened in Mexico in 2017.  These include an Audi factor at which the Q5 crossover will be produced in Mexico in the state of Puebla, and a new Kia plant to be sited in the northern industrial city of Monterrey.  Other automotive companies that are finishing up on initiation of new facilities in Mexico include BMW, Toyota and an Infiniti- Mercedes joint venture.  The three factories will be in Central Mexico.

Remember, interested parties can receive Mexico manufacturing information on a weekly basis by SMS Texting the word Tecma to 96000.