COMEXI-PCNS webinar series 2024: Nearshoring boom: lessons from Mexico and Morocco

May 30, 2024

Nearshoring in Mexico

Nearshoring in Mexico presents both importance and challenges for businesses. The country's proximity to the United States, its largest trading partner, offers strategic advantages such as reduced transportation costs and shorter lead times, making it an attractive destination for nearshoring operations. Additionally, Mexico boasts a skilled labor force, particularly in industries like automotive, aerospace, and electronics manufacturing, which align well with the needs of many nearshoring companies. Moreover, Mexico benefits from trade agreements like the USMCA (United States-Mexico-Canada Agreement), providing preferential access to key markets. However, nearshoring in Mexico also faces challenges, including security concerns in certain regions, bureaucratic hurdles, and regulatory complexities that may impede the ease of doing business. Infrastructure constraints, such as inadequate transportation networks and energy supply, can increase operational costs and pose logistical challenges for companies. Addressing these challenges while leveraging Mexico's strategic advantages is crucial for maximizing the potential of nearshoring in the country.

Nearshoring in Morocco

Nearshoring in Morocco is significant due to its proximity to Europe. This stability, coupled with developed infrastructure and efficient logistics, facilitates seamless operations and reduces investor uncertainties. It offers advantages like reduced transportation costs and access to a skilled workforce, particularly in the engineering and IT sectors. Trade agreements and government investments in infrastructure support nearshoring activities, making Morocco attractive for European companies to optimize their supply chains. The country's political stability, developed infrastructure, and efficient logistics bolster its appeal to investors. Macro factors such as trade openness and stable exchange rates further enhance its attractiveness. Moreover, Morocco boasts solid legal frameworks that prioritize and protect business rights and economic incentives, ensuring a stable and predictable business environment. However, challenges persist, including skill mismatches, technology transfer, and SME upgrading. Addressing these, alongside pressing concerns like achieving carbon neutrality and digitalizing the economy, is essential for Morocco to fully leverage its potential as a competitive nearshoring hub and sustain its appeal to foreign investors.

Importance of the webinar

In this context, the exchange of experiences and lessons learned between Mexico and Morocco is instrumental in bolstering their nearshoring opportunities and overcoming challenges in this domain. By sharing insights into their respective nearshoring endeavors, both countries can leverage each other's strengths and address common obstacles more effectively. Through collaboration and knowledge sharing, COMEXI and PCNS can contribute to identifying innovative solutions, actionable strategies, and the maximal capitalization of trends in the global nearshoring landscape. This exchange can also result in ideas that foster mutual growth and competitiveness in the nearshoring sector, that help drive economic development and create new opportunities for both nations.

RELATED CONTENT

  • Authors
    June 10, 2019
    This article was originally published on Center for Macroeconomics and development's website Friday night, US President Donald Trump announced by Twitter that he would suspend the implementation of tariffs on Mexican imports, which would start with 5% on Monday, June 10, to reach 25% in October. A signed agreement between the two countries, also confirmed by Twitter by Mexico’s foreign minister Marcelo Ebrard, would have included Mexican government’s commitments to take “strong mea ...
  • Authors
    Renato Schwambach Vieira
    Miguel Stevanato Jacob
    Ana Waksberg Guerrini
    Eduardo Germani
    Fernando Barreto
    Miguel Luiz Bucalem
    Pedro Levy Sayon
    June 3, 2019
    This paper estimates the socioeconomic impacts of the emergence and expansion of e-hailing services in São Paulo, Brazil. Combining data from a major service provider, individual level data from a representative travel diary survey and a structural traffic network simulation, we evaluate the impact of e-hailing on commuters' travel time and accessibility. We then estimate the effect of these changes on workers' productivity. Finally, using a Spatial Computable General Equilibrium (S ...
  • Authors
    June 3, 2019
    In a recent brief, titled” The Crisis in World Trade”, my co-authors and I conclude that whether we still have a rules-based system a few years from now depends on the answer to three questions: Can the WTO be revitalized? Is protectionism in the United States a temporary aberration? Will China reform and fit the liberal economic order? If the answer to these three questions is yes, the system will likely endure. If the answer is no, we will return to the power based non system that ...
  • Authors
    Naakoshie Mills
    May 31, 2019
    The author is an alumnus of the 2016 Atlantic Dialogues Emerging Leaders program People centered development is the crux of the African Union’s (AU) new Agenda 2063 initiative. Its overall goal is a Pan African transformation and development of its member countries, while reframing the continent’s presence on the global stage. Fortunately, women’s equality is one of its aims, addressing discrimination, gender-based violence, and empowerment, to name a few. As developed nations like ...
  • Authors
    Mohamed Obaidy
    May 30, 2019
    This paper empirically examines the impact of exchange rate arrangements on current account imbalances within the African context. Following Friedman’s hypothesis (Friedman, 1953), we test the propositions stating that flexible exchange rate regimes limit the magnitude of real external shocks and permit smoother adjustments of external imbalances. Using a new de facto exchange rate regime classification, we employ two empirical methodologies to test this hypothesis: we first apply a ...
  • Authors
    Mouhamadou Moustapha Ly
    May 29, 2019
    The world economy has gone through several systems to determine a value between country’s currencies. After the Second World War and the so-called gold standards, major world economies engaged into a system of fixed exchange rate of currencies against the dollar and, the whole system was backed by the value of USD against gold. After the end of that mechanism known as the Bretton Wood system in the 1970s, major world economies decided to liberalize the system of international exchan ...