Bridging borders and beyond through space diplomacy:
leveraging nearshoring for the economic development of our Northeast Mexico-US common border
Part I
By Judith Arrieta Munguía Consul of Mexico in Brownsville.
Visit the article at https://brownsvilleherald-tx.newsmemory.com/ at the Extra E-Edition Cameron County.
Friday, September 20th, 2024.
The amazing total solar eclipse last April made us all look to the sky in awe. For those of us who live at the Southwest border of the US with Mexico, this thrill also comes in every launch that SpaceX makes of the Starship here in Boca Chica beach.
Next September 17-18 2024, a new partial eclipse of the Moon will remind us that, if we were up there in a spacecraft, we would see North America as a whole, with no borders.
This is precisely how nearshoring is behaving in this part of the world, coming to a most dynamic market, with more fluent and efficient value chains, including in aerospace, which is definitely a win-win for all of North America.
In these trends, Mexico has been playing a silent though growing role. Not only as the first trade partner of Texas, historically, with 285.6 billion USD in 2022. But as the first trade partner of the US since 2023, with almost 900 billion USD, in both services and goods, above Canada and China. The first half of 2024 has registered, yet again, another record: of 415,378 billion USD according to the most recent US Census release, compared to 2023’s first half.
Throughout the amazing post-pandemic economic reactivation, the aerospace sector has been one of Mexico’s power engines: Today Mexico is the 12th exporter of aerospace parts and components worldwide, the 7th buyer of the US aerospace industry and its 6th supplier.
Mexico also holds the 9th place worldwide in applied robotics, with more than 5,700 robots installed in automation processes. It t is as well the 4th world’s largest importer of robots, after China, Germany and the US.
All of this activity has been fueled by almost 400 aerospace suppliers established in 19 states of Mexico in the last 3 decades. Mainly from the US, but also from Canada, France and Spain: 80% of them in manufacture, 10% in maintenance, repair and overhaul (MRO), and 10% in R&D.
The arrival of some of the aerospace Foreign Direct Investment (FDI) started since the 60’s. However, the launch of the NAFTA Agreement back in 1994, and of the new USMCA Agreement in 2020, boosted this sector which reached more than 4 billion USD in FDI for production-repair, but also in R&D. This expansion was nourished by aerospace research centers and tech universities, all supported by several institutions and public-private-partnerships (PPP) with a triple helix approach, creating sinergies among science, academy and industry.
In this context, the launch of the Texas Space Commission in 2024 brings a new horizon to strengthen the Texas-Mexico strategic relationship, starting among our space and science sectors, but also of the institutions that were developed in Mexico in the last decades to back them.
For instance, if we take a look at the aerospace industry that has arrived in Mexico and is exporting to North America, the trend is to expand not only their value chains, but also increasingly, in research and development.
Such is the case of Eurocopter, acquired by Airbuscopter in 1915, which is now enlarging its R&D branch. Another example of this trend is General Electric Infrastructure, established in the late 90’s. It opened a new joint Lab for Innovation on Space Tech last March, with the support of the Aeronautic University of Querétaro –created upon the arrival of Bombardier Aerospace since 2005. GEI is not only employing 1,800 Mexican engineers on 30 patents, but also expanded its space parts and turbines branch last year.
Furthermore Honeywell Aerospace has been present in Baja since 2017 with a facility initially for the testing of prototypes, including the Boeing 777x turbine. This company has now an R&D Center in Mexico City, with 600 engineers currently providing service regionally and globally.
As for 2024, FDI in Mexico’s aerospace sector will close with an expansion of Safran SAESA in both: the production of aerospace parts and turbines and R&D in Queretaro; while their new plant for Aerosystems will operate in Chihuahua with 1,200 solar panels by 2025, as a result of a public-private partnership. Regal Rexnord also established in Chihuahua in 2023 a plant to manufacture engines and transmitters.
Other main expansions this year will come from Airbuscopter; DIEHL Aviation (components); as well as Birmingham Fastener with its defense branch, Alabama Aerospace; and ITP AERO (aeronautic systems).
In any case, in the building up of these aerospace hubs, especially in the last decade, we find a common factor: the institutional support from the State or Federal Government of Mexico, including in infrastructure and other facilities. This is one more reason to believe that any Texas-México partnership in the aerospace sector would receive adequate support.
To be continued...