How Detroit Benefits from NAFTA

[Octafish]

9. Twenty years after NAFTA, a mini Detroit rises in Mexico

by The Center for Michigan
Bridge Magazine on September 25, 2014

EXCERPT...

Twenty years after passage of the North American Free Trade Agreement, known as NAFTA, the auto industry’s rising presence in Mexico has helped bring many of the totems of middle class life to growing manufacturing cities like Saltillo, which are now often described as little Detroits, for better or worse.

Inside the state-run university labs, students use equipment donated by the plants operated by U.S. automakers, who are betting these students will one day work for them. Students like Ernesto Gonzalez, 22, of Saltillo, who said he is about to start an internship with Magna.

SNIP...

Since NAFTA’s passage, vehicle production in Mexico has tripled, from 1.1 million in 1994 to a projected 3.2 million vehicles this year. Increased exports mean the industry now accounts for more than 20 percent of foreign receipts. Mexico’s auto growth is not just from NAFTA, far from it. Mexico now has trade agreements with more than 40 countries, with European and Asian manufacturers building auto plants across Mexico.

Autos booming

Mexico’s rising auto fortunes were solidified earlier this year when its production surpassed that of Latin American rival Brazil. Auto industry analysts predict the trend to continue after manufacturers like BMW announced plans to invest $1 billion in a plant in the central Mexican city of San Luis Potosi that will build 150,000 new vehicles a year starting in 2019. The German automaker follows Honda and Mazda, both of which opened plants in the south central Mexican state of Guanajuato earlier this year.

“The auto industry in Mexico is just booming, it´s taking off right now and it´s probably the industry in which Mexico is the most competitive,” said Christopher Wilson, a senior associate with the Mexico Center at the Woodrow Wilson International Center for Scholars in Washington, D.C.

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http://www.mlive.com/business/index.ssf/2014/09/twenty_years_after_nafta_a_min.html

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