When manufacturing in Mexico is productive, international partnerships thrive. Companies have entered the Mexican automotive, aerospace and electronics markets to realize the advantages of offshoring in the Latin American country and utilize skilled labor in the nation's maquiladoras. When these operations are running smoothly, business owners in the U.S., Canada and other countries throughout the world can benefit from rising numbers of exports being sent into Mexico.
New Mexico and Mexico: Partners in trade
In fact, a recent article in the Albuquerque Journal explained the number and monetary value of goods sent from New Mexico to its neighbor across the border increased by 33 percent in 2013 over the previous year. That represents a rise of roughly $200 million in trade – from $603 million to $803 million – between the two years, the Journal explained citing data from the U.S. Commerce Department's Foreign Trade Division. Even more impressive is the fact that the export growth rate since 2005 has been 334 percent, despite the economic hardships of the prolonged recession beginning in 2008.
Robert Queen, director of the U.S. Commerce Department's Export Assistance Center for El Paso and New Mexico, explained the stark rise in cross-border trade can partly be attributed to the cooperation between industrial sectors, such as those in Santa Teresa, N.M., where businesses produce goods that subsequently flow to maquiladoras in Mexico.
"The main driver is that more New Mexico companies are locating in southern Doña Ana County to feed a wide range of materials to the maquila factories," Queen indicated. "They supply a broad variety of raw metal products, such as steel bar, plates, tubes, stainless steel and coil."
Supporting manufacturing in Mexico
A rising number of New Mexico suppliers have begun cooperating to create higher value exports by more fully preparing machinery and other freight bound for manufacturing facilities in Mexico. This means there are upwards of five different companies that work on materials, including chrome plating and heat treatments, before they're exported to Mexico. However, the majority of trade between New Mexico and its southern neighbor has been metal and plastic components; equipment needed to support transportation infrastructure; and electronics, such as computer and electrical appliances. In fact, these represent 43 percent of all exported goods to Mexico from the American state in 2013, and the majority of them were bound for manufacturing facilities in the region.
Government leaders looking to sustain partnerships
New Mexico Gov. Susana Martinez recognized collaboration between companies in the U.S. and Mexico is mutually beneficial, and if one partner thrives, the other is sure to gain as well. As a result, the governor and her counterparts in Mexico are working to develop stronger infrastructure across the border to bolster trade activities. At the same time, the Journal reported the New Mexico state economic development agency is working to get funding to open an international trade office in Mexico City, as well as expand operations in other South American nations. Citing figures from the U.S. Department of Commerce, the Journal explained New Mexico isn't keeping up with neighboring states to create new jobs, but ranks at the top of the list in exports. By working with Mexico, the state can benefit from increased economic activity and potential new employment opportunities.
Without a doubt, the strong manufacturing sectors in Mexico boost domestic and international firms. With components and equipment flowing into the North American nation from businesses in the U.S., manufacturers looking to offshore in Mexico can trust that the facilities will be equipped with the highest quality products and machinery. Accordingly, the maquiladoras in Mexico deliver exceptional goods to consumer markets throughout the world.