The WSJ had a short report called “US energy revolution attracts Mexican interest” on how manufacturing in the US is becoming increasingly competitive, to the point that it is attracting firms from south of the border. While brief, the report makes some good points, like the fact that (1) there is a reason US manufacturers don’t all immediately bail to the country with the lowest wages; (2) that Mexico seriously needs to address problems of monopoly that make it hard for companies to compete; and (3) that Mexican firms are starting to look at moving northwards.
Here is the report itself:
The media cliche is that free trade has sent U.S. jobs south to Mexico and overseas to China. But the boom in U.S. energy production, creating cheap fuel for manufacturing, has foreign investors thinking more about creating jobs in the U.S. Raul Gutierrez, who leads Mexican steel producer Deacero, tells us that, thanks to cheap energy, the U.S. is becoming more competitive as a place to manufacture. His company produces and sells on both sides of the border and he says that the U.S. is an attractive place to do business. Meanwhile, he’s urging his compatriots to end the government-enforced monopolies that have kept prices high for electricity and other industrial inputs south of the border. In urging Mexicans to embrace competitiveness reforms, he adds: “We need a free trade agreement with ourselves.”
The last line of the report is truly excellent: both funny and true.
h/t to one of my favorite blogs, Fausta’s Blog, for alerting me to this gem.