What the U.S. can learn from Mexico – Global Public Square - CNN.com Blogs
Consider the facts: Mexico’s GDP is expected to grow by nearly 4 percent this year, twice as fast as Brazil or, for that matter, the United States. It is riding a manufacturing boom. Mexico is now the world’s fourth biggest producer of cars, according to the World Trade Atlas. Starting next year, new taxis in New York City will carry a “made in Mexico' label.” Mexico is also the world's top exporter of flat screen TVs. In fact, Mexico exports more manufactured products than all the other countries in Latin America combined.
More from GPS: Misconceptions about Mexico
Three main factors are in play: For one, geography. Sharing a border with the United States means heavy products are cheaper to transport across than if they were manufactured in, say, Asia.
A second factor is NAFTA, the North American Free Trade Agreement. Mexican products are subject to lower duties than those from other countries. In fact, The Economist points out that Mexico has trade deals with 44 countries, the most of any nation in the world.
The third factor is wages. As other manufacturing hubs become more expensive, Mexico has become more competitive. According to HSBC, in 2000 Mexican workers earned nearly five times the salary of their Chinese peers. But, by 2011, Mexican workers were only about a third more expensive than Chinese workers.
When you project all these advantages into the next few years, MexicoÂ’s economic future looks robust. The National Intelligence Council released an important report called Global Trends 2030. One of the trends it looks at is how demographic changes will shape the world. Countries with younger, more dynamic populations will grow faster.
While the median age in Mexico will be 34 in 2030, the median Chinese or Russian age will be about ten years older. JapanÂ’s median age will hit 52. America actually has an advantage here, at 39 our median age will only be five years older than that of Mexico's. Trends don't ensure particular outcomes, but it's clear that contrary to its global image, Mexico's economy has momentum. It will be among the world's top ten economies by the end of this decade.