December 23, 2008 from Shippers Digest
Mexico will cut tariffs on capital goods and other industrial imports to lower costs for Mexican manufacturers who have been hurt by the recession in the United States, Finance Minister Agustin Carstens announced. The cuts are aimed in particular at the maquiladora factories that assemble goods near the border, using components imported from the U.S., and then re-export higher-value-added products back to the United States. The government plans to cut tariffs on up to 5,000 different classes of goods between 2009 and 2012. "These measures are timely, taking into account the difficult economic context we currently face," Carstens said. The United States buys 80 percent of the country's exports, so slumping demand for Mexican exports have taken a heavy toll on Mexico’s economy. Mexico's industrial sector has not recorded any growth since May and productivity growth has not grown in 2008. By lowering the cost of key imported components, the measure could raise the productivity and competitiveness of Mexican manufacturers. The Mexican government projects that GDP growth in the country will fall to 2 percent in 2008 and drop even further to 1.8 percent in 2009. Some private-sector economists are predicting that the country could face a sustained recession
