MANUFACTURING IN MEXICO.MANUFACTURING IN MEXICO.Reflections.Reflections.

Enrique Dussel PetersGraduate School of Economics

CoordinatorCenter for Chinese-Mexican Studies

UNAM

http://www.dusselpeters.comhttp://www.economia.unam.mx/cechimex

CRIMTOutreach Seminar, “Crisis in the

Manufacturing Sector”Montreal, Canada, March 25

REFERENCES Analysis of different segments of commodity chains in

NAFTA-context:– http://www.economia.unam.mx/cechimex/– http://www.dusselpeters.com

2007. Oportunidades en la relación económica y comercial entre Chinay México. CEPAL, CECHIMEX, Cámara de Senadores y SRE,México.

Con Yolanda Trápaga. 2007. China y México: implicaciones de unanueva relación. ITESM, CECHIMEX, La Jornada, México.

2008. With Luis Miguel Galindo Paliza, Eduardo Loría y MichaelMortimore. Inversión extranjera directa en México: desempeño ypotencial. Una perspectia macro, meso, micro y territorial. Siglo XXI,CECHIMEX y Secretaría de Economía, México.

2009. Monitor de la Manufactura Mexicana. CANACINTRA andCECHIMEX, México.

STRUCTURE Policies and strategy towards manufacturing Conditions: Integration or Disintegreation of

NAFTA? Reflections and proposals

PUBLIC POLICIES Since 1988: EOI + NAFTA

– 1994-2000– 2000/2001-…

Policies towards manufacturing– No short, medium and long-term strategy– Unilateral reduction of tariffs (12/2008)– Temporary support in employment for export-oriented

jobs– “Internal” problems and adjustments (Ministry of

Economy) Tensions with main trading partners: US and

China Policy-expectations in the short and medium run?

CONDITIONS (1)CONDITIONS (1)

CONDITIONS (2)CONDITIONS (2)

CONDITIONS (3)• In the NAFTA-region, CHINA:

• Second trading partner of Mexico since 2003• Main exporter to the US since 2007• Second exporter to Canada

CONDITIONS (4)(Mexico: import/export coefficient with

China)

CONDITIONS (5)(real exchange rate, 1990=100)

CONDITIONS (6)(commercial banks, financing to private

firms, 1994=100)

MANUFACTURING (1)(GDP: manufacturing / total)

MANUFACTURING (2)(GDP share: manufacturing main activities,

2003-2008)

MANUFACTURING (3)(manufacturing: loss of 1.01m jobs 2000/10-2009/01 = 24%;(manufacturing: loss of 1.01m jobs 2000/10-2009/01 = 24%;

600,000 loss 2008/10-2009//02, 55.69% in manufacturing)600,000 loss 2008/10-2009//02, 55.69% in manufacturing)

MANUFACTURING (4)MANUFACTURING (4)

MANUFACTURING (5)(Mexico: share of trade by country)

MANUFACTURING (6)(Mexico: growth rate of exports, total and manufacturing)

MANUFACTURING (7)(Mexico: manufacturing, share over trade)

MANUFACTURING (8)MANUFACTURING (8)

MANUFACTURING (9)MANUFACTURING (9)(manufacturing: (trade balance) / GDP(manufacturing: (trade balance) / GDP

MANUFACTURING (10)MANUFACTURING (10)(FDI: annual growth rates)(FDI: annual growth rates)

MANUFACTURING (11)MANUFACTURING (11)(Manufacturing: capacity utilization)(Manufacturing: capacity utilization)

MANUFACTURING (12)MANUFACTURING (12)

CONCLUSIONS AND POLICY OPTIONS (1) IO: Lack of “territorial endogeneity” and dramatic process of

socioeconomic and territorial POLARIZATION, overall and inmanufacturing

In Mexico: deep crisis of Mexico´s productive andmanufacturing sector; no formal employment generation

Crisis since 2000 and 2008, Asia/China pose long-termcompetition … no solution “yet” … PROFOUNDQUESTIONING OF EOI/NAFTA

NAFTA?– Integration or disintegration? At least 2 phases since NAFTA:

1994-1999/2000 and 2001/2002-2009 …– Potential for deepening and increasing socioeconomic integration

between Mexico and US?– Experience of prior US-recession (2001-2003): massive increase in

Asia/China´s share in the US-market.– NAFTA –formally or informally- without Asia/China? Does it

make sense? NO: China is a NAFTA/regional issue

CONCLUSIONS AND POLICYOPTIONS (2)

Manufacturing:– Long term policies vs. dogmatic short-term visions?– Systemic competitiveness of manufacturing?

Macro, meso, micro, and territorial analysis and policies

Towards a new trade and development agenda beyondsecurity? Deepening trade and development integration?– Deepen current legal and formal socioeconomic frame of NAFTA– Rules of origin? Increase?– Territorial-segments of value-added approach in NAFTA:

autoparts-automobiles, electronics, yarn-textile-garments,chemicals, pharmaceutical, …

– Until today: no explicit approach (or even analysis)– Transportation (see IADB-publication)

MANUFACTURING IN MEXICO.MANUFACTURING IN MEXICO.Reflections.Reflections.

Enrique Dussel PetersGraduate School of Economics

CoordinatorCenter for Chinese-Mexican Studies

UNAM

http://www.dusselpeters.comhttp://www.economia.unam.mx/cechimex

CRIMTOutreach Seminar, “Crisis in the

Manufacturing Sector”Montreal, Canada, March 25