Maquiladora industry anticipates new opportunities in USMCA with Biden

Joe Biden’s rise to the U.S. presidency will open up new opportunities to make more use of the USMCA and to collaborate more with the United States.

According to Luis Manuel Hernandez, President of the National Council of the Maquiladora and Manufacturing Export Industry (Index), if the United States wants to activate the United States-Mexico-Canada Agreement (USMCA), the necessary tools are available to create opportunities and the Mexican government will have to issue the required permits to expand the industrial plant.

In addition, he also mentioned that Index will continue to support the attractiveness of  investing in Mexico and expects that during the first half of the year there will be investment growth that did not occur in 2020, as many companies waited for the transition of the US government. With Biden in office, there will be no blocking of investments, as he is against tariff punishments and is in favor of the USMCA; therefore, foreign trade is expected to be less complicated.  

Similarly, Index seeks to gain an increase of between 4% and 5% of jobs in the sector, according to market growth, which is about 120,000 to 150,000 jobs that will be added to the 3 million that currently exist, so the change of government in the United States is also an opportunity for reinvention. 

Moreover, the maquiladora and manufacturing export industry is a major driver of the Mexican economy. This is demonstrated by the fact that as of today over 6,300 companies are part of the IMMEX Program throughout Mexico, making an economic impact of more than 95 million dollars in wages and benefits alone, and creating 3 million direct jobs.

Manufacturing sector reconfiguration

One of the effects of the COVID-19 pandemic was the reconfiguration of the manufacturing industry, since companies in this line of business whose sales fell due to the crisis had to shift to health-related products, such as masks, lab coats and medicines, as well as to look for suppliers in Latin America. 

In view of the above, Hernández said that 1 billion dollars in investment is expected in the first quarter of the year in the manufacturing sector.

In addition, exports have become an important driving force that will keep their momentum in the Mexican economy this year, and are backed by the early recovery of the U.S. Gross Domestic Product (GDP), which is estimated to grow between 3.5% and 4.9% in 2021. 

According to Banco BASE, Mexican exports are expected to grow by 12.3% this year, but Barclays anticipates a 1.8% growth, while Intercam expects growth in the double-digits. 

Oradel Industrial Center seeks to contribute to the advancement and opportunities brought about by the USMCA by offering industrial buildings to international companies engaged in foreign trade operations.