South Korean Ambassador said “Mexico today is a country with infinite potential for economic growth and is on an important path that will allow it to make a significant leap and become one of the leading countries in the world economy”.
Nearshoring in Mexico has been steadily rising over the last decade for a variety of reasons.
Firstly, ongoing trade disputes between the United States and China have created uncertainty about production costs and quality. Moreover, there are concerns about intellectual property protection.
Secondly, when the globe was shut down because of the Covid-19 outbreak, it demonstrated how dangerous it was to rely so heavily on a deteriorating supply chain.
Thirdly, because of the stipulations specified in the USMCA (United States-Mexico-Canada Agreement), which went into force on July 1st, 2020, more North American manufacturers are embracing a regionalized approach to their strategy.
Nearshoring, as opposed to offshore, which relocates factories from expensive countries to lower-cost regions to create goods or services, permits operations to be closer to where the goods or services will ultimately be sold.