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Manufacturing in Mexico

Manufacturing in Mexico

BRICS- development bank and crisis fund

Manufacturing in MexicoBy Adina Moloman

Sources: www.businessweek.com, Financial Times

South Africa recently hosted the fifth BRICS Summit at the Durban International Convention Centre. The summit concluded with a new project: to create their own development bank and crisis fund.

BRICS countries (Brazil, Russia, India, China, and South Africa) account for more than 40 percent of the world’s population, $4.4 trillion in currency reserves that represents 40% of the worlds total foreign-exchange reserves and 25 per cent of global GDP.

These growing developing nations are looking to create an institution to manage their own fund as a challenge to European Union and United States that mostly dominate policymaking at the World Bank and the International Monetary Fund. With this plan, their actions are indeed becoming increasingly political.

The project is not a simple one, it might take a while in order to reach an agreement on how such institutions would be financed, governed, what role this institution would play, the role of shareholders, its location etc.

There are many development banks and organizations already in place (the African Development Bank, the Asian Development Bank, and the Inter-American Development Bank), which will probably be easier and faster to offer assistance or loans on a bilateral basis but maybe the project of its own development bank would weaken these other institutions. BRICS countries co-operate on a bilateral basis and are increasing their trade with one another, but they differ economically (China’s economy is still larger than those of the other three combined).

China became, the world’s largest exporter and also become the largest market for the fast-industrializing countries of East Asia.

Basically all have emerged as preferred locations for manufacturing and services outsourcing and all have a rapidly growing consumer base. This is raising the question: should Mexico join? Last year Mexico registered record donations to the International Monetary Fund in order to support its economy with a special emphasis on those manufacturing in Mexico.

 

SENTRI vs. Global Entry: Customs and Border Protection (CBP)

SENTRI vs. Global Entry: Customs and Border Protection (CBP)

manufacturing in mexicoSources: Otay Mesa Chamber of Commerce

Frequent Travel Programs:  

Land Ports only – SENTRI(For Traveling into the U.S. from Mexico at Land Ports of Entry)

The SENTRI program, highly used by the maquiladora industry provides expedited CBP processing for pre-approved, low-risk travelers at land ports of entry between the U.S. and Mexico border. SENTRI has dedicated commuter lanes to expedite daily travel in major land ports of entry, including San Ysidro and Otay Mesa. Applicants must voluntarily undergo a thorough biographical background check against criminal, law enforcement, customs, immigration, and terrorist indices; a 10-fingerprint law enforcement check; and a personal interview with a CBP Officer.

SENTRI is $122.25 for a five year period but there is a family cap at $244.50

Air & Land Travel  – Global Entry (For Traveling into the U.S by Air or Land)

Global Entry is also popular for companies manufacturing in Mexico, a CBP program that allows expedited clearance for pre-approved, low-risk travelers upon arrival by air or land in the United States. The process for applying to Global Entry is similar to SENTRI.

Participants may enter the United States by using automated kiosks located at selected airports, including Dallas, Houston and San Diego.

Benefits Provided by TSAfor SENTRI/Global Entry Holders

(For Traveling Domestically by Air):

TSA has set up expedited security lanes at certain airports. “TSA Pre” allows select frequent flyers of participating airlines and members of CBP Trusted Traveler programs to receive expedited screening benefits during domestic travel. Eligible participants use dedicated screening lanes for screening benefits which include leaving on shoes, light outerwear and belts, as well as leaving laptops and 3-1-1 compliant liquids in carry-on bags.

U.S. citizens currently enrolled in CBP’s Global Entry, SENTRI or NEXUS Trusted Traveler programs are automatically eligible to participate in “TSA Pre” when flying a participating airline at a participating airport.

Mexico Manufacturing Company

Mexico manufacturing achievements

Manufacturing in MexicoBy Adina Moloman

Sources: Financial Times, Special Report on Mexico

Mexico faces several challenges to achieving a more solid macroeconomic framework.

Its main goal of being among the world’s leading exporting nations is becoming a reality by   diversifying its range of export products (other than oil which were around 80% of the total exports two decades ago) and export markets.

“Diversity and openness” are the key to success. Diversity in export products, from agricultural products to automotive and aerospace components and openness is represented by the variety in Mexico trade partners such as Central and South America as well as with Asia, besides the US, which is still the leading trade partner. Mexico now has trade agreements with 44 countries, as many as China, and almost four times as Brazil. Since the Free trade agreement with US and Canada in 1994, Mexico has negotiated 11 other tariff-reduction accords and achieved agreements with 44 other countries.

Mexico has been climbing the manufacturing chain, now days the Mexican Maquiladoras are manufacturing more sophisticated goods, like electronic, automotive and aerospace goods which need high standards of precision and quality. Mexico manufacturing has taken a big step from manufacture to engineering and design by providing engineers to help design components used by word leading car manufacturers and industrial engineering equipment.

Interesting facts are that the auto sector represents 28 per cent of manufacturing exports, more than oil, tourism, or workers’ remittances home from abroad. Mexico was the world’s eighth-largest car producer in 2011, surpassing Spain and other consolidated auto manufacturers.

Mexico begun to gain market share of total US imports, the world’s largest import market, and accounted for more than 12% of all US, non-oil imports.

There is still a lot to accomplish to deepen local supply chains for transnational companies manufacturing in Mexico. Most of the local suppliers agree about one thing: more incentives from the government are needed. Investors all over the world are considering Mexico as investment.

Siemens for instance is huge investor and is considering Mexico as a platform for manufacturing its high-tension energy transmission equipment in the near future.

Mexico Manufacturing Company

The Mexico Manufacturing Purchasing Managers’ Index (PMI), first semester 2012

Mexico Manufacturing CompanyBy Adina Moloman

Sources: Reuters, HSBC

The Purchasing Managers’ Index (PMI) is an indicator produced by Markit Group, a global financial information services company, the Institute for Supply Management and HSBC, a well known banking and financial services organization. This indicator was created to reflect the financial activity based on acquisition of goods and services (purchasing managers).

The Purchasing Managers’ Index™ (PMI™) surveys are well known for their accuracy in anticipating official data; widely used by economic analysts, financial market players, central banks that require early indicators of changing market conditions when setting interest rates. The surveys cover private sector companies, but not the public sector and reflect the change in the current month compared to the previous month based on data collected mid-month.

The PMI index is based on the next variables: new orders, inventory levels, production, supplier deliveries and the employment environment.

As for Mexico Manufacturing, this index, which measures the Mexican business conditions in the industrial sector is continuing to show positive results: it is registering increases in new export orders, it is also reflecting economic growth starting with the first quarter of 2012 which is closely related to a high demand from the United States.

A negative aspect detected was an increase in input costs.  It is also expecting higher inflation, the Central bank targets 3 percent inflation, but remaining stable at least until early 2014.

Today’s strategy of policymakers is to focus on promoting growth rather than on limiting inflation.

On the other hand The HSBC Emerging Markets Index (EMI)[1] reveals that China has reported a reduced production for the third quarter in a row.

China was the only one of the big-four emerging markets (BRIC) to register lower manufacturing production, while Brazil recorded a rise in production since 2011. Chinese manufacturers are going through a reduction in buying activity for three years.

[1] The HSBC Emerging Markets Index (EMI) is an indicator based on national Purchasing Managers’ Index™ (PMI™) surveys of 5,800 reporting companies in the emerging markets of Brazil, Russia, India, China, Czech Republic, Hong Kong, Israel, Mexico, Poland, Singapore, South Africa, South Korea, Taiwan, Turkey, UAE, Saudi Arabia.