For goodness sake, the Journal of Commerce reported two weeks ago on the deviation of U.S. imports through Canada and Mexico in order to mask/mitigate the effects of what is already an enormous trade imbalance. I wonder what the genuine numbers look like?
Exactly !!
Two and a half years ago, I travelled to China, and I talked to a Chinese officer of a Trading Company. This company was part of a large conglomerate, (all owned by the Chinese Government), they were involved in Real Estate, Banking, Textile (garment and cloth), and many other interests.
At the time, there was talk of a possible trade embargo between the US and China, and I put the question to this man: What would they do if the embargo actually came through.
He smiled and told me that they would simply send the work-in-process (garments), to a plant in Mexicali that THEY owned, then they would make sure that the entire production would meet the requirements needed to enter the US under the NAFTA agreements. To mind comes the % content of "Mexican manufacturing and/or raw materials" in order for the finished product to be labeled "Made in Mexico", hence the NAFTA requirements would be met.
Now..... knowing how things are done in Mexico..... That is a mere technicality, as under the right conditions, such requirement would be relatively easy to achieve. The Chinese themselves, gave me the impression, that when it came to corruption, they could teach a thing or two to the Mexicans..... and that is some saying.....
I keep saying that this "crisis" will be over soon, and they actually are making the US stronger, since everyone in every country keeps saving in US Dollars, in some form or another), and the "from time to time crisis" allows the US to have lower and lower costs of production.
In Mexico, this movie has been repeated over and over and over.....
As for a commodity based exporting economy.... yes, that is definitively a problem that these economies should overcome and learn to manufacture, as far as the Auto, and AUto-Parts Industries, I believe Brazil and Mexico are doing fair jobs.
Ideally, a climate of larger trust amongst the US and Lat Am should be created, the big problem here are the big nationalistic egos that these countries have when it comes to trade agreements and such....
Still, LaT Am. is in a great position to become a great trading partner with the US...... |
