Co-Production International (CPI) announces its next factory tour to Tijuana coming up this March 16th. With international trade and NAFTA effects in the headlines, more and more manufacturers are considering manufacturing in Mexico to remain competitive and increase profit margins. Over 1,000 foreign manufacturers are operating in Baja California and are showing no signs of slowing down despite the "Trump effect". It is more clear now than ever that manufacturing in Mexico will always be strong.
Manufacturing has been earmarked by the World Economic Forum and the European Union as a major driver of increased employment opportunities, reduced carbon emissions and better educational prospects for young people. This huge ambition largely rests on the advent of the smart factory and the rollout of Industry 4.0, which will make manufacturing more affordable in high-wage countries.
The WEF sets out the scale of change in its paper on the Fourth Industrial Revolution (4IR). “The possibilities of billions of people connected by mobile devices, with unprecedented processing power, storage capacity, and access to knowledge, are unlimited. And these possibilities will be multiplied by emerging technology breakthroughs in fields such as artificial intelligence, robotics, the Internet of Things, autonomous vehicles, 3D printing, nanotechnology, biotechnology, materials science, energy storage, and quantum computing.”
President Donald Trump brought two dozen manufacturing CEOs to the White House on Thursday and declared their collective commitment to restoring factory jobs lost to foreign competition.
Yet some of the CEOs suggested that there were still plenty of openings for U.S. factory jobs but too few qualified people to fill them. They urged the White House to support vocational training for the high-tech skills that today’s manufacturers increasingly require — a topic Trump has seldom addressed.
We know you’ve heard of Tijuana, a city that, up until recently, hasn’t needed an introduction—or, maybe we should say, a reintroduction. Sitting directly on the United States–Mexico border, Tijuana developed as a bawdy “Las Vegas South” reputation for American tourists, becoming the country’s capital of vice, cheap pleasures, and tequila-soaked mischief and letting its cultural riches fall by the wayside.
Now thanks to a number of major cultural shifts taking place in the city and along the border, that reputation may as well be ancient history as far as local residents are concerned. After tourists stopped streaming into the city in the mid-2000s due to a temporary uptick in drug-related violence and border tightening procedures, Tijuanenses reinvigorated their city on their own terms, igniting a long-dormant cultural explosion. These days, although the border remains tight, visitors are returning to a much safer city, only to find that it has become a cultural haven bursting with Mexico-centric food, drinks, art, and design.
SAN DIEGO—Around lunchtime two days before Donald Trump’s presidential inauguration last month, some 200 business and civic leaders from San Diego and Tijuana, Mexico, gathered here in a hotel ballroom downtown for an event hosted by the San Diego Regional Chamber of Commerce. As the assembled professionals, decked out in business-casual attire and speaking a smattering of Spanish and English, munched on cold—not to say rubbery—chicken and green salad and sipped iced tea, the event’s keynote speaker, a UCLA economist named Lee Ohanian, delivered a pessimistic message about the man who was on everybody’s mind.
Trump’s plan to tax imports from Mexico would amount to “shooting [us] in the foot,” Ohanian declared, “with many, many unintended consequences.” Given the aging of the baby boomers and declining U.S. birth rates, Trump’s possible plan to reduce immigration levels would make it “extremely difficult” to achieve increased productivity or GDP growth, he warned. But Ohanian wound up his speech on a positive note: Trump seems like a “person who tends to change his mind,” he said. The crowd laughed nervously.
Manufacturing in Mexico is and will always be strong.
NAFTA has improved the economies of its three member nations, added millions of new jobs and created a successful and profitable atmosphere of cooperation. Since its inception in 1994, imports and exports have quadrupled, foreign direct investment grows in billions every year, and manufacturing has become a cooperative effort where products are built from multi-origin parts.
Businesses faced with global competitiveness have not only stayed in business, but have expanded capabilities and increased their profit margins, all while being able to hire more people and innovate in their industries like never before. While headlines continue to include words like “worry” and “uncertainty” in regards to President Trump’s position on NAFTA and trade with Mexico, the reality of free trade and the interwovenness of North America’s economies is a testament to the success of international trade.