"Friend shoring" [1].
[1] https://www.bloomberg.com/news/articles/2021-06-24/-onshorin...
Mexico already has the “maquiladora” model were raw materials flow tariff free into the factory in Mexico, get assembled / transformed there, and go back across the border to the US duty free
You’ve just described Qatar, Bahrain, UAE etc.
Maybe reconsider why local labour is expensive and why it’s worth paying for.
OP said they would be "in US jurisdiction," and thus, presumably, subject to American labor laws. What I think they were suggesting was a visa-free zone within the U.S., which is an interesting idea.
> corporations would be in US jurisdiction but the employees could flow through with minimal overhead
It implies to me that the corporations get to be US based and reap those benefits while employees are not and can be taken advantage of.
Though I do agree with you - there’s a few experiments happening with special economic areas / designated cities in a few places (again, a few in the Middle East) to attract talented individuals and companies to whom local laws may not apply.
Assuming its highly regulated with US minimum wage laws - a SEZ would be much more about arbitraging the strong US dollar/US High Cost of Living (which is strong due to the US's Tech/Finance/Trade strength leaving US manufacturer stuck) versus the more moderate Mexican peso/lower cost of living.
An employee from Mexico working at US factory would be living quite well if they could freely go back after work to living south of the border.[1]
I'd also mention the realistic alternatives to this are: - just import finished goods from other developing countries produced under highly unknown labor or - locate the factory fully within the US and have the undocumented employees cross the border illegally and live in precarious, unmonitored conditions hundreds of miles away from their families and exacerbating housing issues.
[1] Apartment in Matamorosa Mexico is $400 versus $1020 in McAllen, Texas
We need to stop being so hung up on ethics that we fail to arrest our civilization's descent.
We should not be taking steps backwards and making that sort of behaviour acceptable, because if we do that at home - then places with already lower standards will compete by lowering theirs further.
Geographically it’s a huge country so really would benefit from having factories scattered around the country/NAFTAland. Even if some of them clustered in a preferential region (lumber in Canada, car parts in Mexico, certain foodstuff is in California) it offers some risk.
Remember when a fire in a single factory in Japan crippled the semiconductor industry world wide a few years ago?
Growing food in California should be re-thought if you ask me, given the prolonged drought conditions. At some point shipping water to California just doesn't make sense any longer. Instead of shipping the water to California, grow the food where the water is, even if the yields aren't as high. Like you said, a single crop failure in California can wipe out near 100% of the US' food production for certain fruits and vegetables or at least a very very sizable portion of it.
On the far side of these mountains you will find the humid wetlands and the wide rivers of ... Nevada. Perhaps you can try kayaking on Groom Lake someday.
I don't know much about the cartels or violence in Mexico, but that's the first thing I think of when you describe Mexico as low risk.
There is increased cartel risk. I follow a former White House geopolitical analyst after I met him at a conference. Here's his latest talk on Mexico: https://www.youtube.com/watch?v=yilSJg5CMd4
Well, maybe not quite as powerful at predictions as he is at making geopolitical claims.
(He made a bunch of claims in 2009, for the coming decade I'll paraphrase and link to his predictions)
He claimed the middle eastern wars would be withdrawn from and the world would see it as American weakness. That appears to be incorrect from any metric I can find.
He claimed chinas economy would collapse within the decade in 2009. Well, that's not anywhere approaching corret.
He claimed Germany in the same timeframe would ascend to late 1930 levels of political power. I'm not sure how to quantify that, but I sincerely doubt anyone looks at Germany as strongly as they looked in late 1930s.
He predicted Russia would push their western front, but I'm not so sure that was a bold prediction given the russia-georgia war, but he's definitely correct here.
Made a soft prediction of an eastern asia conflict due to Japans collapsing demographics, not correct, but not a strong prediction either.
Concluded by saying we're going to invert into a deflationary economy, which also appears to be very wrong.
I don't know nearly enough to call the guy out by any means, but I do take his word with a lot of hesitancy. I can't think of anyone who speaks as boldly and confidently across such a large domain without feeling the need to evidence their claims.
https://www.businessinsider.com/stratfor-predictions-for-the...
Agreed literally, but post-Ukraine Germany has made an historical shift, for the first time since WWII, to invest seriously in their military and support foreign militaries, and before that, during the Trump administration, they gained much influence and stature as arguably the world leader on human rights.
> He claimed the middle eastern wars would be withdrawn from and the world would see it as American weakness. That appears to be incorrect from any metric I can find.
That actually has been US policy under Obama, Trump and Biden: Trump tried to withdraw from everywhere. Under the Democratic Presidents, the policy has been that the US is less dependent on Middle Eastern oil, the Middle East is consuming not-unlimited US geopolitical power (including military power), and we need to shift geopolitical resources to China while deepening our relationship with NATO.
Obama withdrew from Iraq, made a deal with Iran, and instead of supporting the Saudis he tried to balance them and Iran; he also began the shift of geopolitical resources, including military, to China. Trump withdrew from Iraq and Syria, and undermined various other relationships. Biden pulled out of Afganistan (Middle East adjacent, bordering Iran), explicitly stating the the reasons above (China, etc.) and is shifting more resources to China, and has clearly defined them as 'the pacing threat'.
And many have claimed, including after the two Iraq/Syria pullouts and the Afghan pullout, that America is weaker.
I don't have my thumb on the global pulse of American strength perception so I really can't comment there, but my perception is that people do not perceive America as anything approaching weak with their military.
Also, statistics and drawing dividing lines on Oval Office changes isn't as meaningful as it appears. First, policy takes months or years to develop, and then it's implemented, and then we see the consequences for years or decades after; no president affects policy much on their first day. Second, it needs to be evaluated in context: Obama withdrew combat forces substantially from Iraq, which IIRC was a campaign promise, and then ISIL grew and became a threat and Obama had to deal with them, sending forces back but in a limited fashion - leaving almost all ground combat to the Iraqi and Kurdish militaries. Trump IIRC sent more forces to finish off ISIL and then pulled almost everyone out (causing the resignation in protest of the Secretary of Defense and of the top diplomat for the region). There's a clear message that the US wants to withdraw, which tells Middle East states that the US won't be as much of a force and tells Russia and China that there is room for them to move in.
> people do not perceive America as anything approaching weak with their military
We are talking about America's overall geopolitical power, which depends on far more than the military - 99% of the world isn't fighting a war. The point isn't that the military lacks firepower, but geopolical power is perceived to be lacking - especially the political will and unity to use that power. For example, Russia and China use the Afgan pullout extensively in propaganda, telling people in places like Taiwan that the US wouldn't defend them. The support for Ukraine has changed that substantially, however.
Mexico has a lot of manufacturing already, and a relatively healthy demographic distribution (that is, unlike the US and some other developed countries, they actually have enough young folks to replace the old folks leaving the workforce). I feel like Mexico would have to try very hard to fail at being a manufacturing powerhouse in North America.
As an aside, this is a good reason for the US to really strengthen its relationship with Mexico and try to help Mexico fix its problems; the US is probably going to be even more dependent on Mexican manufacturing in the future when this whole supply chain shuffle shakes out.
Do you mean like returning the former Defense Minister to Mexico before trial? It's so nice that we can "help".
[0]https://www.cbsnews.com/news/salvador-cienfuegos-zepeda-dism...
Again, im no expert on Mexico but from my understanding of the cartel situation Mexico isn't even in the sphere of influence of Mexico.
I don't thing the US would want to put critical supply chains Ina country like Mexico unless they're willing to put troops there to eliminate the cartels, which to be honest would be a terrible idea.
Might be because there's this chunk of Panama/north Columbia that's run by Guerillas and is one of the most dangerous places in existence (https://en.wikipedia.org/wiki/Dari%C3%A9n_Gap)
[1] https://www.nationalgeographic.com/animals/article/north-ame...
I suspect it violates HN guidelines (too snarky?!?!). However, I for one applaud it's pith!
https://www.latimes.com/archives/la-xpm-1995-08-20-mn-36988-...
But this has been heavily protested by environmentalists and natives alike. It might be less controversial to go northeast to Acandí by tunneling under the mountains, which would leave almost all of the forest untouched. Then you could build a long bridge, a coastal highway, or just keep using the ferry.
Plus, there's not even any rail line reaching Panama. The southern terminus of the North American rail infrastructure is Mexico, I think. I doubt trucking everything through Central America would be very cost effective. So you're not only building a new line through 66 miles of some of the most difficult and remote terrain in the world, you're building or refurbishing another ~1500+ miles of rail.
And then you're only reaching Columbia and Venezuela, with the Andes and the Amazon between you and the two biggest markets in South America: Brazil and Argentina.
It would be cool if it happened, but I think it would have to be a regional public works project funded primarily by the U.S. government. Unless Musk is looking for his next challenge (and he can make it pencil out with his Fermi-math voodoo). Maybe the U.S. can sell it to taxpayers as a jobs and economic development program to stem the tide of Central American refugees.
The landscape is wet. You would effectively be building a bridge the whole way. Whilst fighting a guerrilla war, disease and ruining an ecological system in the process.
Does the Panamerican highway not qualify as land-borne transportation?
https://tax.thomsonreuters.com/blog/mexico-as-a-new-capital-...
We are at systemic risk from our reliance on China.