News, Insights and Best Practices for Manufacturing in Mexico

US states seeking to form connections with Mexico's growing economy

04 Aug 2014

Category: Labor & Economics

Mexico's economy is expanding daily, and the U.S. states bordering Mexico are doing what they can to align their own interests with that of their southern neighbor's.

As one example, California Gov. Jerry Brown recently visited Mexico on July 30, according to the Wall Street Journal. During his trip, he met many important people, including Mexican President Enrique Peña Nieto.

One item of discussion was Mexico's deregulation of its energy industry, so that it would permit other companies than the state-owned Pemex to drill oil fields and sell gasoline and electricity.

Brown also commented that Mexico's relationship with California was older than even California's relationship with Washington, D.C., since California was once part of Mexico.

Texas also aiming to align with Mexico
Another state that wants to form a bond with Mexico in order to exchange businesses back and forth through a more transparent border is Texas. Mexico is Texas's biggest trading partner, according to Tech Crunch, and much of the trade has to do with maquiladoras, which are factories that have earned the label "maquila," from which they derive their names. Maquiladoras are factories that receive special government and tax incentives to operate in certain parts of Mexico, and in exchange, the factories must export their goods outside of Mexico.

Setting up a factory under a maquila designation can be done with the help of an experienced Mexico shelter company. Additionally, exporting goods from Mexico is easy as well, due in part to the North American Free Trade Agreement (NAFTA), which allows goods to be shipped to all three of the North American countries without tariffs for almost all products.

Although Texas and Mexico have both benefited from the maquila industry, the U.S. state wants to expand the relationship to include more entrepreneurs going in both directions.

"They say that San Antonio is the northernmost city in Mexico," said Lorenzo Gomez, director of San Antonio startup incubator Geekdom. "We in Texas get the benefit when immigrants come into our country — it's an injection, an infusion of entrepreneurs that most other places don't get."

One such company, called SpaceX, according to Tech Crunch, plans to leverage NAFTA to build some of its parts in Mexico and some of its parts in the U.S., taking advantage of the strengths found in each country.

Such a plan is perfectly feasible with the help of a shelter company, which would know which parts of Mexico have the biggest suppliers of specialized tools and equipment for certain manufacturing trades, along with the right kind of specially trained labor force.


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