The U.S. plastics industry earns kudos again in 2000 for its international trade record. However, so much of the good news is the result of booming business in Mexico that there's reason to be concerned.
First, the good news: According to just-released U.S. Department of Commerce data, the U.S. plastics industry reported a record trade surplus in 2000.
Processors and resin suppliers posted big surpluses, $1.64 billion and $6.63 billion, respectively.
Also, the trade deficit for molds was slashed to $430 million, from $600 million just three years ago, and the trade deficit for machinery and machine components shrank from $1.16 billion in 1999 to $830 million last year.
Much of the improvement is thanks to growing exports to Mexico. Processors shipped $4 billion worth of products to Mexico in 2000, up from $3.2 billion in 1999 and $2.3 billion in 1997. No doubt many U.S. employers are losing business to low-cost competition from south of the border.
But the trade data proves that the North American Free Trade Agreement is creating far more U.S. jobs than it is displacing.
Still, smart processors need to stay a step ahead. As the manufacturing base in Mexico grows, processors must work to remain competitive, to minimize their exposure to a potential downturn and to be aware as their multinational customers search for the next low-cost manufacturing area.