Mexico’s aerospace sector is growing. Will it be undercut in USMCA review?

Monterrey, Mexico – In April, Mexican President Claudia Sheinbaum announced the country’s aerospace manufacture could spot sustained yearly maturation of arsenic overmuch arsenic 15 percent implicit the adjacent 4 years, and attributed the sector’s enlargement to a robust section manufacturing workforce, expanding exports, and a beardown beingness of overseas companies.

But with the reappraisal of the United States-Mexico-Canada Agreement (USMCA) coming up – the free-trade pact betwixt the 3 countries that helped Mexico’s aerospace assemblage to turn and flourish – the industry’s aboriginal is nary longer certain.

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Stakeholders pass that ensuring concern stableness and strengthening labour standards are indispensable to protecting the sector’s North American proviso chain.

Mexico is striving to go 1 of the apical 10 countries successful aerospace accumulation value, a extremity outlined successful Plan Mexico, the country’s strategical inaugural to heighten planetary competitiveness successful cardinal sectors.

As the sixth-largest supplier of aerospace parts to the US, the manufacture has benefited importantly from the USMCA, which fostered determination proviso concatenation integration, said Monica Lugo, manager of organization relations astatine the consulting steadfast PRODENSA.

However, the integration is nary warrant of concern continuing to turn arsenic the state is astatine an “unprecedented moment” with US President Donald Trump and his wide-ranging tariff policies.

Lugo, a erstwhile USMCA negotiator, said that caller tariffs connected materials similar steel and aluminium — captious to the aerospace sector— person eroded spot successful the US arsenic a reliable partner. She predicts that if existent conditions continue, the assemblage risks losing capital, investments and jobs.

“Having this large uncertainty – 1 time it’s on, the adjacent it’s off, who knows time – and based connected nary circumstantial criteria, but alternatively connected the president’s mood, creates chaos and severely damages the state and the economy,” she said.

On December 4, Trump suggested the US mightiness fto the USMCA expire adjacent year, oregon negociate a caller deal. This follows comments by US Trade Representative Jamieson Greer to US quality outlet Politico that the medication is considering abstracted deals with Canada and Mexico.

A booming aerospace sector

The Mexican aerospace marketplace is valued astatine $11.2bn, and is expected to much than treble to $22.7bn by 2029, Sheinbaum said, citing information from the Mexican Aerospace Industry Federation (FEMIA). Home to planetary companies similar Bombardier, Safran, Airbus, and Honeywell, Mexico has established itself arsenic a cardinal subordinate successful the planetary aerospace marketplace and is present the world’s twelfth-largest exporter of aerospace components.

Marco Antonio Del Prete, caput of sustainable improvement successful Queretaro, attributes this occurrence successful portion to dense concern successful acquisition and training. In 2005, the Queretaro authorities promised Canada’s Bombardier that it would put successful acquisition and acceptable up the Aeronautical University, which present offers programmes ranging from method diplomas to master’s degrees successful aerospace manufacturing and engineering.

“Since Bombardier’s arrival, an acquisition and grooming strategy was created that allows america to make endowment successful a precise businesslike way, let’s say, accelerated track,” Del Prete told Al Jazeera.

Bombardier has served arsenic an anchor, propelling Queretaro’s emergence arsenic a high-skilled manufacturing hub for parts and components.

While the Bombardier works successful Queretaro primitively focused connected wiring harnesses, it has evolved to specialise successful analyzable aerostructures, including the rear fuselage for the Global 7500, Bombardier’s ultra-long-range concern jet, and cardinal components for the Challenger 3500, the mid-sized concern jet.

Marco Antonio Carrillo, a probe prof astatine the Autonomous University of Queretaro (UAQ), pointed retired that the area’s wide acquisition offerings person cultivated a almighty workforce, which has gained important attraction from aeroplane makers, chiefly from the US, Canada and France.

“This improvement [of Queretaro] has been, if you look astatine it successful presumption of time, genuinely explosive,” Carrillo said.

Mexico besides aims to articulation France and the US arsenic the 3rd state susceptible of afloat assembling an motor for Safran.

But the International Association of Machinists and Aerospace Workers (IAM) Union, which represents much than 600,000 workers successful Canada and the US, is disquieted that advancement could pb to much precocious manufacturing and assembly enactment to yet displacement to Mexico, fixed the section concern successful aeronautical universities and training.

“Right present they’re [Mexican workers] doing much entry-level benignant things, but our interest is that aboriginal on, larger pieces of the aerospace cognition volition spell to Mexico,” Peter Greenberg, the IAM’s planetary affairs director, told Al Jazeera.

High-skilled, low-cost workforce

Of the 3 countries successful the USMCA agreement, Mexico’s biggest attraction has been its low-cost manufacturing.

Edgar Buendia and Mario Duran Bustamante, economics professors astatine the Rosario Castellanos National University, mention Mexico’s debased labour costs and geographical proximity to the US arsenic the country’s cardinal advantages. This is partially wherefore the US has intensified unit connected the Mexican government, including during the archetypal USMCA negotiations successful 2017, to rise wages to level the playing tract and trim unfair competition.

“Most US companies person incentives to determination their accumulation present successful Mexico, fixed the [low] wages and the geographic location. So, to forestall that from happening, the United States is pressuring Mexico to rise labour standards, guarantee state of association, and amended moving conditions,” Buendia told Al Jazeera, things that volition payment Mexican workers adjacent arsenic employer-dominated labour groups interest that they whitethorn suffer their advantage.

The IAM primitively opposed the USMCA’s predecessor, NAFTA. Greenberg said that portion they admit USMCA volition continue, US and Canadian workers “would astir apt beryllium perfectly happy” if the statement ended arsenic the NAFTA woody had led to plants being shuttered and workers being laid disconnected arsenic jobs moved from the US and Canada to low-cost Mexico.

“There is simply a request for stronger incentives to support enactment successful the United States and Canada. We privation to spot the wages successful Mexico spell up truthful that it doesn’t go automatically a spot wherever companies spell to due to the fact that they cognize they volition person little wages and workers who bash not person immoderate bargaining powerfulness oregon beardown units,” Greenberg added.

Under Sheinbaum’s Morena party, Mexico has raised the minimum wage from 88 pesos ($4.82) successful 2018 to 278.8 pesos ($15.30) successful 2025, with the complaint successful municipalities bordering the US reaching 419.88 pesos ($23). On December 4, Sheinbaum announced a 13 percent emergence successful the minimum wage — and 5 percent for the borderline zone— acceptable to statesman successful January 2026.

Despite these increases and the competitiveness of wages successful the aerospace sector, researchers hold that a important wage spread persists betwixt Mexican workers and their US and Canadian counterparts.

“The wage spread is decidedly abysmal,” said Javier Salinas, a student astatine the UAQ Labor Center, specialising successful labour relations successful the aerospace industry. “The [aerospace] manufacture mean is betwixt 402 [Mexican pesos] and 606, with the highest regular wage being 815. [But] 815, converted to US dollars, is little than $40 for a azygous workday.”

By contrast, Salinas estimates that a idiosyncratic successful the US earns an mean of astir 5,500 pesos, oregon $300, per day.

‘Protection unions’

The USMCA required Mexico to extremity “protection unions”, a longstanding signifier wherever companies motion agreements with corrupt national leaders — known arsenic “sindicatos charros” — without the workers’ knowledge. This strategy has been utilized to forestall authentic national organising, arsenic these sindicatos often service the interests of the institution and authorities authorities alternatively than the workers.

Salinas argues that contempt the 2019 labour reform, it remains hard for autarkic unions to emerge. Meanwhile, “protection unions” proceed to support wages debased to support competitiveness.

“But imagine, a competitiveness based connected precarious oregon impoverished moving conditions. I don’t deliberation that’s the mode forward,” Salinas said.

Even with caller labour courts and laws mandating corporate bargaining, organising successful Mexico remains dangerous. Workers attempting to make autarkic unions often look firing, threats, oregon being blacklisted by companies.

Humberto Huitron, a lawyer specialising successful corporate labour instrumentality and commercialized unionism, explains that Mexican workers, including successful the aerospace sector, often deficiency effectual representation. “There’s favoritism during hiring oregon recruitment. They don’t prosecute workers who are dismissed for national activism,” helium said.

Beyond demanding that Mexico enforce its labour reform, the IAM is calling for the enlargement and strengthening of the Rapid Response Mechanism (RRM), which allows the US to instrumentality enactment against factories if they neglect to uphold state of relation and corporate bargaining rights.

While not successful the aerospace sector, the US precocious invoked the RRM against a vino shaper successful Queretaro. Previous specified actions successful the authorities had been constricted to the automotive sector.

“No 1 knows precisely what is going connected successful each of the factories successful Mexico,” Greenberg said.

According to FEMIA, determination are 386 aerospace companies operating successful 19 states. These see 370 specialised plants that make 50,000 nonstop jobs and 190,000 indirect jobs.

Del Prete, however, assured Al Jazeera that, successful Queretaro, unions are autarkic and “they person their ain organisation.”

Salinas points retired that successful Queretaro, determination has not been a onslaught successful decades, adding, “Imagine the power of the workforce: 29, 30 years without a azygous onslaught successful the backstage sector.”