NAFTA’s ‘Uninvited Guest’: Why China’s Path to U.S. Manufacturing Runs Through Mexico

NAFTA’s ‘Uninvited Guest’: Why China’s Path to U.S. Manufacturing Runs Through Mexico wharton.universia.net/index.cfm?fa=v…

[...] there are some differences between China’s relationship with Mexico, and China’s relationships with the other emerging countries of Latin America, analysts point out. Kevin Gallagher, associate professor of International relations at Boston University, argues, “There are two ways in which the China-Mexico relationship is somewhat unique. Lots of South American countries are exporting raw materials to China and importing cheap goods from China,” which puts pressure on their domestic markets. Thus, in effect, China pays for its imports of Peruvian and Chile copper, Argentine soybeans, Brazilian wheat, Colombian coal and so forth, by exporting low value manufactured goods to those countries. However, notes Gallagher, “Mexico is different in that its primary raw material export -- crude oil -- goes to the United States, and not much of Mexico’s exports go to China.” The two countries also compete directly in a wider range of products. “Over 90% of Mexico’s exports are under threats from China in markets where China is gaining market share and Mexico is losing it,” adds Gallagher, co-author of the 2010 book, The Dragon in the Room: China and the Future of Latin American Industrialization.