An innovative concept known as ally-shoring has recently come to the forefront as a trade strategy with the potential to transform the North American supply chain. Developed by American economists and adopted by the US-Mexico Foundation, ally-shoring outlines a path to build a more resilient economy in North America, boost economic recovery across the continent, and strengthen democracy in the region. This strategy builds on the foundation of trust, cooperation, and interdependence that has existed since the start of the industrial era between Mexico and the United States to help the region adapt and prepare for the future.

What exactly is ally-shoring?

“Ally-shoring describes the process by which countries rework critical supply chains and source essential materials, goods, and services among and between trusted democratic partners and allies, with a focus on investing in the short and long-term relationships that protect and enhance joint economic and national security.” (US-Mexico Foundation)

electronic manufacturing in Mexico

Recent challenges arising from the world health crisis have revealed the United States’ overdependence on China and the need to rework global supply chains and reduce distances in these. At the beginning of the pandemic, the US experienced a personal protective equipment (PPE) shortage due to manufacturers being located in China. Very quickly, international companies in Mexico, including GM and Aramark, adapted their production facilities to produce PPE. This is just one example of how the United States can partner with Mexico, leveraging its existing infrastructure, human talent, and technologies to create synergies and more agile supply chains in various industries.

An ally-shoring strategy also dovetails with and complements changes in trade regulations and objectives outlined in the USMCA. New rules of origin requirements for automotive manufacturing in Mexico require supply chains to adapt and be reworked. Fortunately, the country already has robust and mature supply chains in this and many other industries, including medical devices manufacturing, as well aerospace, and electronic manufacturing in Mexico.

To fully leverage these resources, a first step in ally-shoring includes mapping out the size, scope, and capacities of existing and potential businesses in Mexico to pursue development, co-production, and sourcing across transformational sectors. Another step will be to further strengthen existing trade facilitation mechanisms, such as IMMEX in Mexico, and implement a smart border plan and advanced manufacturing processes. By combining both countries’ knowledge, technology, and resources, the possibilities are endless. They can even help develop new, sustainable, clean, and green technologies and systems to meet global climate change commitments.

medical devices manufacturing

Though the world and business have gone through some difficult and drastic changes over the last year, they have also opened up a new world of opportunities for strengthening cross-border ties and creating more sustainable, socially conscious, and profitable companies. If you are interested in exploring this concept further or would like to start up business in Mexico, it is a good idea to talk to a provider of shelter services in Mexico. This ensures that you won’t be starting from zero when relocating or setting up operations; instead, you will have the existing foundation of their decades of experience, on-the-ground knowledge, and trust built with stakeholders across the country, especially in Mexico manufacturing.

By Adán Gómez | Business Development Director | American Industries Group®

Did you find this content interesting? Sign up for our monthly newsletter to receive more articles and infographics.

Subscribe

If you would like to find out more about this topic or are interested in receiving a complimentary business case analysis for your operation in Mexico, please fill out this form or contact us at:

US toll-free: +1 (877) 698 3905

CAN toll-free: +1 (844) 422 4922

start@americanindustriesgroup.com
Please note that we do not accept job applications here. If you are interested in applying for a position, please visit the following link: https://www.americanindustriesgroup.com/jobs/




Related posts

November 29, 2022
Mexico: One of the US’s Top Three Trading Partners
Mexico: One of the US’s Top Three Trading Partners
Mexico and the United States have a long history of social and economic interdependence, ties which are more important today than ever. Recent years have highlighted […]
November 28, 2022
Mexico: An Ally in Redesigning Global Microchip Supply Chains
Mexico: An Ally in Redesigning Global Microchip Supply Chains
Some of the most important lessons learned from the global microchip shortage that affected 169 industries and caused multi-million-dollar losses are that today’s global supply chains […]
November 23, 2022
Aluminum; business for the USMCA market
Aluminum; business for the USMCA market
Over two years after the enactment of the United States-Mexico-Canada Agreement (USMCA), aluminum imports from the US to Mexico have reached record levels. As one of […]
November 10, 2022
Doing Business in Mexico: Labor Considerations and Foreign Investment
Doing Business in Mexico: Labor Considerations and Foreign Investment
One of the main reasons Mexican manufacturing has been so popular, especially for US companies, is its competitive labor rates. This means significant savings, but at […]
November 8, 2022
Benefits of IVA (VAT) / IEPS Certification
Benefits of IVA (VAT) / IEPS Certification
Many companies are familiar with Mexico’s IMMEX program for international and US companies manufacturing in Mexico, which has been in place for over 30 years and […]
November 2, 2022
Mexico’s Main Exports
Mexico’s Main Exports
A significant part of Mexico’s economy is based on international trade, with exports representing 18.5% of its gross domestic product in 2021. Exports have grown steadily […]