While nearshoring in Mexico is starting to become a reality on a large scale, companies looking to do so still face many obstacles. 

A famous Mexican president once said, “Poor Mexico, so far from God, so close to the U.S.” Little did he know at the time that such proximity would someday hold tremendous economic opportunity.

Overview

“Nearshoring” means moving all or part of a business operation to a nearby country from one farther away. Geopolitical tensions, trade policy, ballooning transportation costs, COVID-19-related shutdowns and increased compliance costs for sourcing goods from the People’s Republic of China have encouraged manufacturing companies to nearshore their operations closer to the United States, especially to Mexico.

Background

Since the North American Free Trade Agreement (NAFTA) was implemented in 1994, Mexico has been the recipient of a healthy investment boon in foreign direct investment (FDI). According to World Bank figures, in 1993, Mexico received USD$4.39 billion in FDI before expanding rapidly and reaching over $30 billion for the first time in 2001―with a high in 2013 of $50.83 billion. Mexico’s FDI has surpassed $30 billion in six of the past seven years and most recently was $35 billion in 2022. NAFTA gave foreign investors preferential duty treatment, access to the biggest consumer economy in the world and, perhaps most importantly, legal certainty and protection of their investments. Almost 30 years later and despite the current political rhetoric, Mexico continues to be a magnet for manufacturing sectors. Nowhere is this more evident than in the automobile industry. Since NAFTA was implemented, Mexico has become a manufacturing hub for Asian and European vehicle and vehicle part producers. In 2017, the United States, Mexico and Canada started NAFTA’s renegotiation to reflect modern business practices. As a result of these negotiations, the United States-Mexico-Canada Agreement (USMCA) took effect July 1, 2020. Among other things, the USMCA increased regional value content requirements for products to be considered to be made in North America. Consequently, the increased requirements also gave an incentive to foreign producers to relocate their supply chain to North America.

On March 1, 2023, the United States Trade Representative (USTR) released President Joe Biden’s 2023 Trade Policy Agenda and 2022 Annual Report. In it, the USTR highlighted USMCA’s Rapid Response Mechanism (RRM). The RRM allows the United States to quickly take action and target specific facilities in Mexico where workers are being denied their rights to freedom of association and collective bargaining. The RRM is a tool intended to level the playing field for U.S. workers. USTR Ambassador Katherine Tai has worked with labor representatives in Mexico to invoke the RRM to resolve multiple violations of workers’ rights, which included securing reinstatement and backpay to workers who were allegedly terminated for participating in union activity.

Why Mexico?

Mexico shares a 2,000-mile border with the United States. It has free trade agreements with over 40 countries and has an ample, young, skilled and cost-efficient labor force. Time zone differences are not an issue and shared cultural and business values ease economic dealings. Mexico also offers benefits similar to those of a U.S. foreign trade zone through its IMMEX program. Articles are exempt from taxes and duties provided certain requirements are met. However, not everything comes without challenge as the country continues to struggle with security issues, corruption, lack of infrastructure (mainly energy) and industrial park availability. Energy policies recently adopted by current Mexican President Andres Manuel Lopez Obrador have disheartened some investors. Currently, the United States, Mexico and Canada are engaged in an energy dispute that may end up with the implementation of an arbitral panel under Chapter 31 of the USMCA dispute settlement mechanism.

While nearshoring in Mexico is starting to become a reality on a large scale, companies looking to do so still face many obstacles. The main obstacles for new entrants are the lack of industrial real estate and access to reliable energy. A common mistake by new entrants is not properly managing time expectations for projects. Mexico’s governmental agencies (at federal, state and municipal levels) in charge of issuing permits required to open and operate a manufacturing facility are notoriously difficult to navigate and time consuming. Mexico’s labor laws are employee-friendly, and failure to assess employment risks or adopt mitigation strategies have proven costly for many new entrants. Notwithstanding the challenges in Mexico, increasing tensions with China as well as reinforced U.S. policies encouraging regional production as part of its plan to secure the supply chain have made Mexico a prime location to consider nearshoring or “friendshoring” operations.

Impact of Trade Policy in Nearshoring Operations

To say that the trade relationship between the U.S. and China is very complex is an understatement. The relationship is mainly driven by national security considerations as opposed to economic rationale. This heightened complexity will increase costs for any company doing business with China, hence making Mexico a more attractive consideration for nearshore operations. Some examples of the fraught trade policy changes in the last couple of years include:

Section 301 Tariffs

In 2017, the United States launched an investigation under Section 301 of the Trade Act of 1974 conducted by the USTR. The reason for the investigation was predicated on China’s acts, policies and practices related to technology transfer, intellectual property and innovation. In March 2018, after considering public comments, the USTR issued a report concluding that China’s intellectual transfer regime is unreasonable or discriminatory and burdens or restricts U.S. commerce. As a result, under the Trump administration, the U.S. imposed Section 301 tariffs on imported goods of Chinese origin through four lists that were sequentially enacted that have a total annual trade value of approximately $370 billion. While these Section 301 tariffs issued pursuant to List 3 and List 4A are being challenged at the U.S. Court of International Trade and the USTR is conducting a review of the tariffs as required by the trade statute, it seems rather unlikely that the Section 301 tariffs will be eliminated in the near future.

Uyghur Forced Labor Prevention Act

On December 21, 2021 President Biden signed the Uyghur Forced Labor Prevention Act (UFLPA) into law, which entered into effect on June 21, 2022. The UFLPA establishes a rebuttable presumption that imports of all goods, wares, articles and merchandise mined, produced or manufactured wholly or in part in Xinjiang, or mined, produced or manufactured by certain entities on the UFLPA Entity List, are presumed to be made with forced labor and are thus prohibited from entry into the United States. The UFLPA presumption applies unless U.S. Customs and Border Protection determines that it has been rebutted (i.e., that the importer has complied with specified conditions and, by clear and convincing evidence, has demonstrated that the items were not mined, produced or manufactured wholly or in part by forced labor). The presumption also applies to goods made in or shipped through China and other countries that include inputs made in Xinjiang. There is no de minimis safe harbor; as a result, if a single tire in an automobile was produced with forced labor, the entire vehicle will be denied entry into the United States.

Semiconductor Export Restrictions and Incentives

The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) implemented a series of targeted updates to its export controls as part of its efforts to protect U.S. national security and foreign policy interests. These amendments to the Export Administration Regulations (EAR) administered by BIS will restrict the ability of China to purchase and manufacture certain high-end chips used in military applications and build on prior policies, company-specific actions and less public regulatory, legal and enforcement actions taken by BIS.

CHIPS Act

The Creating Helpful Incentives to Produce Semiconductors and Science Act of 2022 (CHIPS Act) was signed into law in August 2022 and provides $52.7 billion in incentives to American semiconductor companies for research, development, manufacturing and workforce development. Of those incentives, $500 million is for international information communications technology security and semiconductor supply chain activities. Reports from President Biden’s trip to Mexico in early January 2023 indicate that both countries have agreed to coordinate investments in semiconductor manufacturing. Secretary of Commerce Gina Raimondo, whose department is leading the implementation of the CHIPS Act, remarked that Mexico could benefit from housing the manufacturing facilities for semiconductors. In addition, the CHIPS Act provides safeguards that prevent fund recipients from expanding or advancing semiconductor manufacturing capabilities in foreign countries of concern like China.

The Tariff Response

The People’s Republic of China responded to U.S. trade policy by adopting retaliatory tariffs on U.S. products imported to China. In addition, China has enacted laws that make it illegal for Chinese firms to comply and cooperate with information requirements from the United States. The United States continues to aggressively use its arsenal of trade remedies such as the Section 232 steel and aluminum tariffs and anti-dumping and countervailing duties. Given recent events and increased geopolitical tension, more restrictive actions are likely and will further encourage companies to nearshore their operations to a friendlier environment. Therefore, Mexico presents itself as a seamless and promising platform to develop, expand and consolidate a significant market presence in North America.

Conclusion

In summary, there are numerous reasons why Mexico will be a critical player in the massive supply chain realignment that the Biden administration is seeking to create. Accordingly, there are great opportunities that U.S. and Mexican companies can seize that establish effective North American supply chain partnerships, especially ones that develop effective strategies for taking advantage of duty preferences under the USMCA and/or funding under the CHIPS Act.

About Duane Morris

Attorneys in Duane Morris’s Mexico Business Group and the International Practice Group have considerable subject matter experience on matters involving operations in Mexico and international trade issues. Such work includes setting up companies in Mexico, purchasing land for manufacturing facilities, monitoring the constantly evolving enforcement changes to merchandise classification, advising clients on pertinent duty mitigating strategies, performing risk assessments, and assisting clients in developing and implementing cost-effective compliance policies and taking remedial actions when necessary.

For More Information

If you have any questions about this Alert, please contact Eduardo Ramos-Gómez, Geoffrey M. Goodale, Rosa M. Ertze, Hernan Gonzalez Moneta, Raul Rangel Miguel, any of the attorneys in our Mexico Business Group, any of the attorneys in our International Practice Group or the attorney in the firm with whom you are regularly in contact.

抓住墨西哥近岸外包的黄金机会

一位著名的墨西哥总统曾说：“可怜的墨西哥，离上帝这么远，离美国这么近。”他当时并不知道，这种接近有一天会带来巨大的经济机会。

概述

“近岸外包”是指将全部或部分业务运营从较远的国家转移到附近的国家。地缘政治紧张局势、贸易政策、不断膨胀的运输成本、与COVID-19有关的停工以及从中国采购货物的合规成本的增加，这些因素都促使了制造业公司在靠近美国的地方（尤其是在墨西哥）开展业务。

背景

自1994年北美自由贸易协定（NAFTA）实施以来，墨西哥一直是外国直接投资（FDI）的健康投资热潮的接受者。根据世界银行的数字，1993年，墨西哥获得了43.9亿美元的FDI，然后迅速扩大，在2001年首次突破300亿美元，2013年达到508.3亿美元的高点。在过去七年中，墨西哥的FDI有六年超过了300亿美元，最近一次是在2022年达到350亿美元。NAFTA给予外国投资者优惠的关税待遇，以及进入世界上最大的消费经济体，也许最重要的是，给予他们的投资以法律确定性及保护。近30年后，尽管存在目前的政治言论，墨西哥仍然是制造业的一块磁石，这一点在汽车行业得到了最大的验证。自NAFTA实施以来，墨西哥已成为亚洲和欧洲汽车和汽车零部件生产商的制造中心。2017年，美国、墨西哥和加拿大开始了NAFTA的重新谈判，以体现现代商业惯例。作为这些谈判的结果，美国-墨西哥-加拿大协议（USMCA）于2020年7月1日生效。除其他事项外，USMCA提高了被视为北美制造产品的区域价值含量要求。因此，提高要求也激励了外国生产商将其供应链迁往北美。

2023年3月1日，美国贸易代表（USTR）发布了乔拜登总统的2023年贸易政策议程和2022年年度报告。在报告中，USTR强调了USMCA的快速反应机制（RRM）。RRM 允许美国迅速采取行动并认定工人被剥夺结社自由和集体谈判的权利。RRM是一个旨在为美国工人创造公平竞争环境的工具。USTR凯瑟琳•戴大使与墨西哥的劳工代表合作，援引RRM解决多个侵犯工人权利的问题，其中包括为据称因参加工会活动而被解雇的工人争取复职和补发工资。

为什么是墨西哥？

墨西哥与美国有着2000英里的边界。它与40多个国家签订了自由贸易协定，拥有充足的、年轻的、有技能的和具有成本效益的劳动力。墨西哥与美国没有时差问题，共同的文化和商业价值也使经济交易更加容易。墨西哥还通过其IMMEX计划提供类似于美国外贸区的福利，只要符合某些要求，物品就可以免于纳税和关税。然而，并非一切都没有挑战，因为墨西哥仍在与一些问题抗争，包括安全问题、腐败、缺乏基础设施（主要是能源）和可用的工业园区。墨西哥现任总统安德烈•曼努埃尔•洛佩斯•奥布拉多最近采取的能源政策使一些投资者感到沮丧。目前，美国、墨西哥和加拿大存在能源纠纷，最终可能会根据USMCA争议解决机制的第31章实施仲裁。

虽然墨西哥的近岸外包正开始大规模地成为现实，但希望这样做的公司仍然面临许多障碍。新进入者的主要障碍是缺乏工业用地和获得可靠的能源。新进入者的一个常见错误是没有正确的项目时间预期。负责发放开设和经营生产设施所需许可证的墨西哥的政府机构（在联邦、州和市级）是出了名的难应对和耗时。墨西哥的劳动法对雇员是友好的，如果不评估就业风险或采取缓解策略，对许多新进入者来说代价是昂贵的。尽管在墨西哥存在挑战，但由于与中国关系的日益紧张，以及美国鼓励区域生产作为其确保供应链计划的一部分的政策，使墨西哥成为考虑近岸外包或“友岸外包”业务的主要地点。

贸易政策对近岸外包业务的影响

说美国和中国之间的贸易关系非常复杂是一种轻描淡写的说法。这种关系主要是出于国家安全考虑，而不是经济原因。这种增加的复杂性将增加任何与中国做生意的公司的成本，从而使墨西哥成为更有吸引力的近岸外包业务的选择。过去几年中，一些令人担忧的贸易政策变化包括：

第301条的关税

2017年，美国根据《1974年贸易法》第301条发起了一项由USTR进行的调查。调查原因被推断是中国与技术转让、知识产权和创新有关的行为、政策和做法。2018年3月，在考虑了公众意见后，USTR发布了一份报告，认为中国的知识产权转让制度是不合理的或歧视性的，并对美国商业造成了负担或限制。因此，在特朗普政府下，美国通过依次颁布的四份清单对原产于中国的进口商品征收301条款关税，这些商品的年度贸易总额约为3700亿美元。虽然这些根据清单3和清单4A颁布的301条款关税正在美国国际贸易法院受到质疑，而且美国贸易代表署正在按照贸易法规的要求对这些关税进行审查，但似乎基本不可能在近期内取消301条款关税。

《涉疆法案》

2021年12月21日，拜登总统签署了《涉疆法案》（UFLPA）成为法律，并于2022年6月21日生效。UFLPA建立了一个可反驳的推定，即全部或部分在新疆开采、生产或制造，或由UFLPA实体名单上的某些实体开采、生产或制造的所有货物、器皿、物品和商品的进口，都被推定为使用强迫劳动制造，因此禁止进入美国。除非美国海关和边境保护局确定该推定已被推翻（即进口商已遵守特定的条件，并以明确和令人信服的证据证明该物品不是完全或部分由强迫劳动开采、生产或制造的），否则UFLPA推定适用。这一推定也适用于在中国和其他国家制造或通过中国和其他国家运输的含有新疆生产元素的货物。没有最低限度的避风港；因此，如果一辆汽车的一个轮胎是由强迫劳动生产的，整辆汽车将被拒绝进入美国。

半导体出口限制和激励措施

美国商务部工业与安全局（BIS）对其出口管制进行了一系列有针对性的更新，作为其保护美国国家安全和外交政策利益努力的一部分。由BIS管理的《出口管理条例》（EAR）的这些修正案将限制中国购买和制造某些用于军事用途的高端芯片的能力，并建立在BIS以前的政策、针对公司的行为和较少公开的监管、法律和执法行动之上。

CHIPS法案

2022年《创造对生产半导体有益之激励措施法案》（CHIPS法案）于2022年8月签署成为法律，为美国半导体公司的研究、开发、制造和劳动力发展提供527亿美元的奖励。在这些奖励中，5亿美元用于国际信息通信技术安全和半导体供应链活动。来自拜登总统2023年1月初访问墨西哥的报告指出，两国已经同意协调对半导体制造业的投资。商务部部长吉娜•雷蒙多（Gina Raimondo）的部门正在领导CHIPS法案的实施，她说，墨西哥可以从容纳半导体的制造设施中受益。此外，CHIPS法案提供了保障措施，防止资金接受者在中国和其他令人关切的国家扩大或提升半导体制造能力。

关税对策

中国对美国贸易政策的回应是对进口到中国的美国产品征收报复性关税。此外，中国已颁布法律，规定中国公司遵守和配合美国的信息要求是非法的。美国继续积极使用其贸易补救措施的武器，如第232节钢铝关税和反倾销和反补贴税。鉴于最近发生的事件和地缘政治紧张局势的加剧，可能会有更多的限制性行动，并将进一步鼓励公司将其业务移至更友好的环境。因此，墨西哥为发展、扩大和巩固在北美的重要市场地位提供了一个无缝和有希望的平台。

结论

总之，有许多理由表明，墨西哥将在拜登政府正在寻求建立的大规模供应链调整中成为一个关键角色。因此，美国和墨西哥公司可以抓住建立有效的北美供应链伙伴关系的巨大机会，特别是那些制定有效战略以利用USMCA下的关税优惠和/或CHIPS法案下的资金的公司。