Further Coordination in North America Necessary for Nearshoring

The 10th North American Leaders’ Summit ended with a lack of concrete proposals for greater regional integration, said Ana Gutiérrez, Coordinator of Foreign Trade and Labor Market, Public Policy Research Center (IMCO), and Oscar Ocampo, Coordinator of Energy, IMCO. Despite this, the experts said that the summit itself is good for the three countries because dialogue is vital for regional cooperation. 

The connection between Mexico, Canada and the US is vital to enhance commerce and the exchange of talent and ideas across North America. However, the three countries have unresolved issues when it comes to fully integrating the region, said IMCO. 

For example, Mexico’s Felipe Angeles International Airport (AIFA) fails to comply with the necessary requirements to solve the country’s airspace competitiveness. The downgrade of Mexico’s airspace to Category 2 in aviation security by the US Federal Aviation Administration (FAA) has been the major challenge in increasing passenger and cargo traffic. Mexican airlines are now unable to open new frequencies to the US and the Mexican government's flagship projects are diminished. “Mexico's potential to build more air routes will remain with self-imposed obstacles, and access to the US market will be limited,” said the experts via an IMCO analysis.

Maritime commerce between Mexico and the US also faces deep rooted challenges, as the prohibition of cabotage continues to limit the penetration of Mexican products in the east coast of the US. IMCO experts argue that a dialogue to resolve and agree on better maritime policies between the two countries could exponentially benefit the southeastern region of Mexico. 

Mexico and its North American counterparts carry out 70 percent of their commerce via road logistics but the lack of investments in highways, bridges and railways inhibits the region’s competitiveness and restricts imports and exports. 

Mexico has 14 free trade agreements with 50 countries and offers skilled labor at competitive costs. The country’s real wages between 2014 and 2021 have grown by a minimum of 0.2 percent in comparison to China’s 6.1 percent, as reported by MBN. 

North America is privileged thanks to its market size, demography  and abundance of energy. “However, without joint planning and investment in logistics infrastructure that allows us to capitalize on these elements, the opportunities will not live up to our potential as a region. It is time to strengthen our connections, by sky, sea and land,” concludes IMCO.