The Trans-Pacific Partnership trade deal is generally getting trashed in U.S. presidential election debates, over concerns that it will cost U.S. manufacturing jobs.
But in Mexico — which is often mentioned in U.S. debates as benefiting when jobs leave for lower-wage countries — the TPP is not seen as slam-dunk win either.
The director general of Mexico's plastics industry trade group Anipac (Asociación Nacional de Industrias del Plástico AC) told me at the Plastimagen show in Mexico City in early March that he sees TPP as a “two-sided weapon.”
José María Rebollo Lang said TPP will be a key issue for the future of Mexico's plastics industry. It's hard to predict this early but it will have a complicated impact, he thinks.
It will be two sided in the sense that Mexican plastics companies that are globally competitive will do well, while those that are not competitive, or that can't access global markets, will suffer under TPP, he said.
“If you have the basis to export your product, you will be safe,” Rebollo said. “You export your product, and you will get dollars or yen back. If you don't have a very strong base, you will be hurt.”
Similarly, other Mexican plastics industry observers bemoaned a lack of competitiveness in parts of the local industry.
Eduardo de la Tijera Coeto, co-founder and CEO of well-known Mexico City consultancy Grupo Texne, thinks that foreign-owned plastics processing companies are better able to get into the supply chains of global car makers and others driving growth in Mexico, than are local Mexican firms.
He felt the Mexican industry was “losing ground” to foreign firms in those situations. But he also said that Mexico's plastics industry was more resilient than Brazil's overly protectionist manufacturing sector.
Mexico's plastics industry still grew 4.2 percent last year in the volume of plastic goods produced, he said. He was not speaking about TPP directly, but his nuanced worry about the state of Mexico's industry were similar to Anipac's Rebollo.
Rebollo said some Mexican firms are capable of directly working in the global supply chains, but he also thought Mexico's plastics industry should have some form of phased-in reductions of tariffs under TPP, as it faces new competition.
“We should be afraid of Vietnam,” he said. “Vietnam exports a lot. We should recognize that people from Asia are very capable.”
TPP is a global trade deal that covers 12 countries bordering the Pacific Ocean, from developed economies like the U.S. and Japan to emerging markets like Mexico and Vietnam. TPP has become a political third rail in this year's U.S. elections. Politicians who once backed it are now backing away.
The New York Times had this detailed story March 19 on the closing of a furnace and heating equipment manufacturing plant in Indiana by Carrier and its decision to move that work to Mexico.
The story noted how news of the closure went viral after Donald Trump started talking about it, and how some of the strongest opponents of current trade deals, Trump and Bernie Sanders, were being supported by workers.
Trade is a complex topic, and I don't have a grand point here. The New York Times article wonders if the “more trade is good” bipartisan consensus in U.S. politics is over.
I don't know, but it was interesting that for all the trashing of TPP in the U.S., Mexico's industry also has its own TPP concerns.
