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NAFTA Concerns Haven’t Halted Mexican Car Manufacturing

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Aug. 13, 2018—In recent months, U.S. president Donald Trump has urged automakers to shift manufacturing from foreign locales like Mexico, in favor of creating U.S. facilities. Yet, even after negotiations grew strained with regard to the North American Free Trade Agreement (NAFTA), the unemployment rate in Mexican cities like San Luis Potosi is approaching zero, according to a Washington Post report.

In San Luis Potosi in particular, a BMW factory is being built, and job recruiters roam the largest plazas eagerly searching for job candidates. Yes, even as NAFTA talks continue, many of Mexico’s manufacturing cities continue to thrive; the main reason for that is Mexico has reshaped the auto industry in ways that can’t be undone quickly.

U.S. officials remain optimistic that an agreement with Mexico on key elements of a new North American trade deal could be announced soon. It appears that an agreement would require more manufacturing work to be done at higher wages, likely in the U.S. Yet, experts expect concessions for companies already operating in Mexico.

The value of the Mexican peso has increased more than 10 percent over the past two months, and the country’s stock index has increased more than 5 percent in that time. Those factors have helped temper some concern about the future of the auto industry.

To read the entire Washington Post article, click here.

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