Mexico is no longer the low-wage sourcing location for low-value consumer products for the U.S. market that it was two decades ago when the North American Free Trade Agreement with the U.S. and Canada was implemented. True, average wages have risen higher in coastal China, where so much export production is based, than in Mexico. But with an increasingly skilled Mexican workforce and a rapidly growing middle class, many international companies are investing in facilities to manufacture in Mexico higher-value products for the U.S. and Mexico's domestic market, and still more are planning to invest in sourcing there.
The near-sourcing trend is fueled by the desire to reduce turnaround time from order to delivery, cut transportation costs, and, increasingly, to avoid any repetition of the West Coast port congestion and delays that plagued so many supply chains in late 2014 and early this year.
When Democrats recently rejected a trade proposal involving Pacific nations, some cited the North American Free Trade Agreement as a turning point for working Americans.
"Since NAFTA, we have hollowed out the middle class," a California congressman said, pointing to a drop in manufacturing jobs and stagnation in wages.
But Texas has been booming since the law passed 21 years ago. The state has added over 4 million jobs, which is more new hires than larger California and twice the growth rate of the nation.
Trade with Mexico and Canada has taken off, and Texas exports to Mexico have nearly tripled. Foreign investment in all three countries has soared. And U.S. trade in private services, a national strength, tripled to $30 billion in Mexico and increased even more in Canada.
As the largest American maker of consumer drones, 3D Robotics Inc. sees big opportunities in selling mini-helicopters with cameras, sensors and whirling propellers that buzz like angry hornets.
The Berkeley company expects to sell thousands of the pizza-sized drones — for about $1,000 each — at home and abroad this year. Tech-savvy customers want them for capturing wave-shredding surfing runs in the Pacific, monitoring oil and gas pipelines in remote regions, and other uses.
3D Robotics is out in front of dozens of California companies jumping into the nascent business of selling drones to consumers and commercial enterprises, just as companies in the state did earlier when the drone market consisted largely of one customer: the Pentagon.