Change in Mexico
For the first time, Mexico this year overtook China as the No. 1 supplier of clothing and textiles to the U.S. . . .
Spurred by the North American Free Trade Agreement (NAFTA), the surge in apparel exports has touched off an investment boom. Not only are manufacturers expanding their low-wage plants, but they are building high-tech operations to spin fibers and weave fabrics. . . .
To encourage the growth of the industry, Mexico is trumpeting both its proximity to the U.S. and the benefits of NAFTA to potential investors. . . . Although Mexican garment workers start at about $6 a day-double their Chinese counterparts-manufacturers save on the three- to four-week shipping time from the Far East. Mexican garments are trucked to the U.S. border in two to three days-a crucial difference in the time-sensitive garment business. And NAFTA has eliminated U.S. import quotas on garments made from fabric produced in North America. . . .
- Clothing factory, Aguascalientes, Mexico
Meanwhile, several U.S. producers are building new mills in Mexico rather than expand at home. Guilford Mills, Inc., a Greensboro (N.C.) manufacturer, is spending $100 million on a knitting, dyeing, and finishing plant in the Gulf Coast port of Altamira. . . .
As the foreign-owned companies rev up their export machines in Mexico, savvy local producers are making sure they win, too. Denim producer Compañía Industrial de Parras expects to boost its exports to $146 million this year, up 13 times since the start of NAFTA in 1994. It all signals a new era for the Mexican industry-and shows how NAFTA is reshaping North America's economy.
—Reprinted from July 27, 1998 issue of Business Week, by special permission, copyright © 1998 by The McGraw-Hill Companies, Inc.
Examining the Newsclip
1. Analyzing Information What are manufacturers doing as a result of the increase in apparel exports?
2. Understanding Cause and Effect How has NAFTA helped the growth of the garment industry in Mexico?
SECTION î
Post a comment