NAFTA has been good for Mexico ’s electronics sector but the time has come for Mexico to transition from assembling electronic products to inventing new products.

      According to Mexico ’s Ministry of Economy, the North American Free Trade Agreement has promoted the regional integration of the North American electronics industry by expanding trade and investment flows in the region. As a result, Mexico has developed a stronger and more competitive electronics industry.

      NAFTA has lowered tariffs and increased trade. In 1993, U.S. exports of electronics and computer products to Mexico faced an average import duty of 13.3 percent. By 1999 this tariff was reduced to 1.8 percent, and in 2003 it was eliminated.

      In 1993, Mexican exports to the U.S. in this sector faced an average import tariff of 1.6 percent. In 1999, this duty was close to zero. By comparison, non-NAFTA countries exporting electronics to Mexico and the United States faced import duties of 15.4 percent and 1.64 percent, respectively.

      The reduction of tariffs on North American electroncs under NAFTA has helped to boost trade among the partners. During NAFTA’s first six years, U.S.-Mexico trade in electronics reached almost $53 billion, an increase close to 220 percent since 1993. In 1999, U.S. exports to Mexico in this sector reached $26 billion, while Mexican exports to the United States amounted to $27 billion. The impressive growth in this sector’s trade has resulted in increased activity in... 

...Continued in the pages of Twin Plant News, Subscribe Today!