How good it is to be close to the United States and benefit from the so-called nearshoring, or the new tendency of the American government to favor business with neighboring countries? A lot, and he knows something about it Mexico, which this year after 20 years has returned to being the first trading partner of United States, bypassing the China which in the first six months of this year recorded a -25% export to America. The Central American country is benefiting from geopolitical tensions and the US preference for "zero kilometer" to the point that its GDP will grow by 3,5% this year, 1,2 points more than expected.
Record foreign investment in Mexico
Although Bloomberg analysts warn that gang violence, as well as obstacles to water and energy supplies, could slow this trend, many local and foreign businesses are already looking to take advantage of changes in production chains, some of which are now more than set in this direction. In particular, Mexican companies linked to the real estate and construction sector are benefiting from the re-localization of Yankee business, especially in industrial areas near the US border. But not only: in the first six months of 2023 il Mexico he collected approx $29 billion in foreign direct investment, up 5,6% from 2022. More than half were in the industrial sector, and Mexican gross fixed capital formation is on track to post its strongest annual growth since 1997, jumping 31,5% year-on-year in terms seasonally adjusted to August, according to the latest data.
How much will Mexico be able to exploit the momentum of nearshoring?
Even large giants have begun to participate in the banquet, such as the Californian Tesla which has invested 5 billion dollars in a factory right in the north of Mexico, bringing with it an industry which has seen another billion in investments by Chinese companies . “Nearshoring is destined to take off, but it will take time,” he explains in an interview with Bloomberg Gerardo Copca, analyst at the consultancy firm MetAnalisis. Mexican real estate investment fund Fibra Uno expects the nearshoring wave in Mexico to continue for the next 15 years, its CEO said Andre El-Mann. In addition to real estate, demand is proving particularly strong in the automotive sector, in the electronics industry, among machinery manufacturers, but also in textiles, pharmaceuticals and renewables.
Nearshoring is driving Mexico and all of Latin America
If it is true that Mexico (as well as Canada, another beneficiary of the free trade agreement with Washington) is the country that benefits most advantages, it is also true that the effect of nearshoring is destined to reverberate throughout Latin America. 80% of Mexican exports go towards the USA, but according to estimates by the Banco Intermericano de Desenvolvimento (BID) the new trade scheme will increase exports from the entire Latam and Caribbean area to North America to almost 80 billion dollars per 'year. After Lopez Obrador's country, neighbors Guatemala and El Salvador celebrate the most, then comes Brazil which will export 8 billion a year, ahead of Argentina and Colombia. The operation brings economic and logistical advantages to the entire continent, and from the US point of view it also means reaffirming its influence in an area where there are still Hostile countries including Cuba e Venezuela, and where they are intensifying their presence China e Iran, In addition to Russia.
