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Mexico's Automotive Industry Post Covid-19

Leo Guzman-Anaya1
University of Guadalajara, Mexico
Member of PECC Mexico

 

Background

Mexico’s automotive industry experienced a wave of rapid growth after the 2008 financial crisis. It now ranks as the fourth major exporter and the seventh global producer of automobiles and fifth producer of auto parts. This position was achieved primarily because the industry has been characterized by global production networks with fragmentation of their production processes, where companies have searched for locations that favor cost optimization and manufacturing quality. In this sense, Mexico provided a developed and functional productive infrastructure, human capital endowment, and a growing internal market which stimulated the arrival of automotive Original Equipment Manufacturers (OEM) from north America, Europe, and Asia. Also, the favorable geographical location that provide entry to the north American market and a network of 13 Free Trade Agreements (FTA) with preferential access to 50 economies position Mexico as a preferred location for investment projects as reflected in an inflow of Foreign Direct Investment (FDI) in the automotive industry2. Between 2008 and 2019, FDI flows to the industry experienced an annual average growth rate of 11.6% in real terms3.

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COVID-19 and the ‘zoom’ to new global value chains

Christopher Findlay, Honorary Professor of Economics at the Crawford School of Public Policy, the College of Asia and the Pacific, The Australian National University; Vice-Chair, Australian National Committee for Pacific Economic Cooperation

Fukunari Kimura, Chief Economist of the Economic Research Institute for ASEAN and East Asia (ERIA) and Professor of Economics at Keio University.

Shandre ThangaveluVice President of the Jeffrey Cheah Institute on Southeast Asia at Sunway University and Regional Director Southeast Asia at the Institute for International Trade, University of Adelaide.

 

COVID-19 has sent shock waves running up and down global value chains (GVCs). Social distancing and high levels of uncertainty have caused a significant drop in demand for goods, with GVCs carrying the economic shock through supplier economies. 

Recovery from the shock is anticipated once COVID-19 cases fall below a certain level, but financial fragility are likely to linger from the large negative wealth effects caused by the pandemic. Several stages of fiscal and monetary policy stimulus are likely to be introduced over the coming months across many economies.

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Trade and Connectivity in the Post-COVID-19 World

Pascal Lamy
President of the Paris Peace Forum of the French Committee of the PECC
Former Director General of the WTO
&
Eduardo Pedrosa
Secretary-General, Pacific Economic Cooperation Council*

 

Even as some economies begin to relax their lockdowns, it is too early and too much is unknown to realistically assess the economic impact. The consequences of this crisis have been and will be felt across every aspect of human life. Although many uncertainties remain, whether sanitary, economic, social or political, we must make our best efforts to figure out what a post-crisis life might look like and prepare for it.

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The small virus

Diego Solis Rodriguez
Mexican Council on Foreign Relations, Young Associate.
Consejo Mexicano de Asuntos Internacionales
a Next Generation Delegate to the XXII PECC General Meeting.


The coronavirus has prompted an unintended global experiment. The pandemic has turned international affairs into a vast laboratory. Today, we can identify some of its experiments: the global response to the pandemic; multilateralism and international cooperation; American leadership; the influence of China; the "purpose" of the European Union; climate change and the urgency of "green transition"; digital trade; and the return of the state towards democracy and freedom, to name a few.

To say that the virus is a failure of globalization is a simplistic statement. Globalization is a rather complex phenomenon for which it cannot be entirely blamed. In short, it is a multi-sectorial process that can be shaped in different ways.

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Lessons from Kronavirus: Is Sweden’s anti-lockdown approach more strategic than it seems?

Scott Young
Former director of ideas and insights at the Institute for Canadian Citizenship
Next Generation Delegate to the XX PECC General Meeting.

 

Scott Young: Sweden's unorthodox strategy has been rightly criticized, but it's too early to condemn an approach that's focused on the long game and public trust

 

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COVID-19 has Exposed Major Gaps in our Social Safety Nets: In a Post-COVID World Will these Gaps be Closed?

Hugh Stephens
Vice Chair, Canadian National Committee on Pacific Economic Cooperation (CANCPEC)
Distinguished Fellow, Asia Pacific Foundation of Canada
Executive Fellow, School of Public Policy at the University of Calgary

 

The onset of the global COVID-19 pandemic has brought into question many long-held assumptions about how we interact socially, conduct business and deal with marginalized segments of our society. Policy makers have faced a series of challenges from first trying to ensure the health and safety of citizens to then dealing with the economic fallout of the social distancing and self-isolation measures that have been widely imposed to fight the pandemic. There has been much speculation on how COVID-19 will impact our policy settings as the world emerges from total lockdown and moves into what may the first of several post-COVID phases. While much of the focus has been on economic measures, in Canada the sudden arrival of COVID-19 has exposed holes that already existed in our social safety net. Governments in Canada1 have moved to deal with these gaps out of necessity as part of the requirement to contain the epidemic, but the real question will be the extent to which these interim response measures will remain in place once the threat of COVID-19 subsides.

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COVID-19: Experiences from best practices in Asia show a path forward in the fight against the coronavirus

Jeffrey Reeves
Vice-President of Research for the Asia Pacific Foundation of Canada

 

Zodov Dolgor has been in self-quarantine since January.

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Wuhan Dispatch: Part 2: Sharing Best Practices Around Testing and Treatment

Jeffrey Reeves
Vice-President of Research for the Asia Pacific Foundation of Canada

 

On April 8th, more than 50 physicians, logisticians, and head administration officials from Vancouver Coastal Health and from across British Columbia had a conference call with doctors and nurses from Central Hospital in Wuhan, China – arguably the first responders on the front line of the global war against COVID-19.

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Wuhan Dispatch: Part 1: Establishing a Dialogue Between Canadian and Chinese Health-care Professionals

Jeffrey Reeves
Vice-President of Research for the Asia Pacific Foundation of Canada

 

On March 26, more than 25 physicians from Vancouver Coastal Health had a conference call with doctors and nurses in Wuhan, China – arguably the first responders on the frontline of the global war against COVID-19. The call was the first of several designed for Vancouver health-care professionals to learn from China’s experience around pandemic response and mitigation. Over the course of 45 minutes, China’s doctors and nurses spoke about the challenges, best practices, and experiences they have had in dealing with the coronavirus outbreak.

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Multilateral Cooperation is a Safeguard against Pandemics

Rebecca Fatima Sta Maria
Executive Director, APEC Secretariat

 

Last month, G20 leaders released a statement advocating for a spirit of solidarity in the global response against COVID-19. In these dire times, it is a call that should be heeded well beyond their membership.

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International cooperation during COVID-19

Sungbae An
Senior Research Fellow
Department of International Macroeconomics and Finance
Korea Institute for International Economic Policy (KIEP)

 

The rapidly evolving risks posed by the coronavirus outbreak are likely to reactivate cross-border coordination on macroeconomic policies.

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G20 comes to the fore again

Jorge Heine
Research Professor, Pardee School of Global Studies, Boston University
Non-resident senior research fellow at the Center for China and Globalization in Beijing

The current COVID-19 is the worst global pandemic to hit the world in a century, only surpassed by the 1918 influenza virus that killed 50 million people. As of this writing, the virus has been found in 175 economies and regions, with 471,000 cases and 21,000 deaths worldwide. The World Health Organization (WHO) reports that the epidemic is still accelerating. And it will not abate any time soon. While some specialists speak of a time horizon of three to four months, others predict waves of cases that may last for two years.

Vaccines may take anywhere from a year to 18 months to develop and be ready to go to market. Even relatively remote and isolated places like Puerto Williams in Chile, the world's southern most human settlement, and Nantucket Island, off the coast of Massachusetts, have reported cases of coronavirus. You can run, but you can't hide.

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Tackling COVID-19 Together: A Bottom-Up Approach to Trade Policy

Simon J. Evenett
Economics Professor at the University of St. Gallen, Switzerland and Global Trade Alert1

There is growing interest in the positive contribution trade policy could make in tackling the COVID-19 pandemic. In part, this reflects the well-founded concern that the effectiveness of health policy responses is being diminished by existing trade barriers and new curbs on the export of medical supplies.


Well-founded—given the resort to trade restrictions on medical supplies and soap summarised here. As of 27 March 2020, 64 export curbs on medical supplies have been introduced by 60 governments since the beginning of the year. Forty-nine of those export curbs have been announced since the beginning of this month, an indication of just how quickly new trade limits are spreading across the globe.

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Drastic measures to stop spread of COVID-19 are necessary

Charles E. Morrison
Adjunct Fellow and Former President of the East-West Center 
&
Former Co-Chair, PECC

Despite the current media and political glare, coronavirus is a silent killer. Since one neither sees the virus nor knows who may be spreading it unaware, perhaps even oneself, life appears normal on the surface. For many, it is hard to accept the preventive measures that would be draconian in normal times, and easy to believe that government, the media and businesses are overreacting when, in fact, these measures are typically too little, too late.


The key preventive concepts are to “flatten the curve,” through “social distancing,” that is, strategies to try to spread out the rate of infection over a longer period. This reduces the peak burden on overstretched medical institutions, saves lives, and buys time to produce vital medical equipment and develop vaccines.

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International Trade at a Time of Covid-19

Roy Santana
Expert on tariffs and customs issues at the WTO; occasional lecturer
(the views expressed in this article are those of the author in his personal capacity and should not be attributed to the WTO or its members)

Like many of you, I am currently in full "lockdown mode" and impatiently waiting for the COVID-19 crisis to get under control. And, like half of Europe's population, I am working from home while trying to convince my kids that they have to keep studying!

But, being a #tradenerd, every piece of news that I read or meme that I receive sparks a trade-related question, and the list is getting longer by the minute. I imagine that some of you may have similar questions so, during the weekend and over the past few nights, I have put my anxiety to good use and prepared this post with the 4 things you probably don't know about #internationaltrade and the coronavirus. The usual caveats apply: these are my own personal opinions and they do not reflect in any way the views of the #WTO Secretariat or its Members. 

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ASEAN-China cooperation in time of COVID-19 pandemic

Jusuf Wanandi
Vice Chair, Board of Trustees, CSIS Foundation and
Former Co-Chair of PECC

The year had just begun when news of the coronavirus outbreak shook the world. The World Health Organization declared it a pandemic when the new virus, which causes the disease COVID-19, crossed international borders and spread rapidly into many countries of different continents.

Over two months later, another bombshell hit the already shaken world: a drastic drop in oil prices as a result of strong disagreements between Saudi Arabia and Russia.

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  2183 Hits

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