Manufacturers based in the U.S. have sought out the benefits of outsourcing many different parts of their supply chains over the years. As always, speed and efficiency in delivery is the key to successful outsourcing, and traditional offshoring of manufacturing processes cannot compete with the power of proximity and favorable trade agreements enjoyed through nearshoring with Mexican companies.

Working with Mexican nearshoring companies provides lower transportation costs than offshore providers and a workforce that is becoming more skilled while remaining relatively less expensive than domestic labor costs. For many years, U.S.-based companies have been hesitant to invest in Mexican manufacturing because of security concerns related to drug cartel violence. With the advent of nearshoring of a wide variety of manufacturing as well as information technology services, it is becoming apparent that foreign manufacturing trade is much less susceptible to violence than rivalries between cartel organizations and state authorities.

Nearshoring between the U.S. and Mexico has become more efficient and profitable with the adoption of the USMCA trade agreement, which has become fully ratified in 2020. Modern manufacturing incorporates advanced software development at all stages. The USMCA allows for the free movement of digital products between the U.S. and Mexico and prohibits trade barriers or tariffs on software related to manufacturing processes for a single company across the border.

One of the largest concerns for U.S. companies who outsource manufacturing has traditionally been intellectual property (I.P.) protection. Across the spectrum of offshore manufacturing nations, the level of I.P. protection available in the U.S. is greatly compromised. When offshoring can lead directly to theft or misuse of I.P., domestic manufacturers are forced to evaluate whether outsourcing savings are justified. With the advent of the USMCA, U.S. companies are afforded outstanding I.P. protections for technologies developed or utilized in Mexico. The trade agreement provides the same level of I.P. protection in Mexico that companies expect in the U.S.

Nearshoring with Mexican companies also includes simplified and fast travel options between the U.S. and Mexico for outsourced team members. The USMCA gives work visa preferences to Mexican technology developers and managers. Approved visas do not have date restrictions and can be applied for at any time of year. The traditional rationing rules of H1B visas do not apply to nearshoring manufacturing developers from Mexico. This allows for much freer movement by managers and developers from Mexico to the U.S. in order to coordinate and manage manufacturing, assembly, and I.T. components.

As the US remains the leader worldwide for trade in manufactured goods, the ongoing growth of nearshoring with firms and producers in Mexico is promoting the overall growth of the manufacturing industry in Mexico. The country is producing skilled workers and engineers at ever-increasing levels and is likely to remain a key engine in producing goods and technology for U.S. firms that trade around the globe.

About NearShore Technology     

NearShore Technology is a U.S. firm headquartered in Atlanta with offices throughout North America. The company focuses on meeting all the technology needs of its clients. NearShore partners with technology officers and leaders to provide effective and timely solutions that fit each customer's unique needs. NearShore uses a family-based approach to provide superior I.T., Medtech, Fintech, and related services to our customers and partners throughout North America.