WEBVTT NOTE This file was generated by Descript 00:00:00.700 --> 00:00:04.840 While the renegotiation of the North American Free Trade Agreement into the U. 00:00:04.840 --> 00:00:05.080 S. 00:00:05.080 --> 00:00:10.579 Mexico Canada Trade Pact back in 2020 may have rocked Mexico's economy 00:00:10.579 --> 00:00:14.879 in the short term, the benefits are beginning to be felt in Mexico. 00:00:15.229 --> 00:00:19.229 Representing 20 percent of this country's entire manufacturing sector, 00:00:19.489 --> 00:00:23.700 Mexico's automotive industry became the top vehicle exporter to the U. 00:00:23.700 --> 00:00:23.900 S. 00:00:23.900 --> 00:00:25.580 market last fall. 00:00:25.870 --> 00:00:32.390 Car exports from Mexico grew last year to represent nearly 38 percent of the US 00:00:32.439 --> 00:00:38.489 automobile market, a continuation of the steady growth seen over the past decade. 00:00:38.720 --> 00:00:44.339 And with investment still flowing in, that figure is expected to rise. 00:00:44.420 --> 00:00:46.039 And more recently, 00:00:46.120 --> 00:00:50.100 Oscar León, a professor at Mexico's National Autonomous University, 00:00:50.190 --> 00:00:53.769 says that has a lot to do with international companies seeking 00:00:53.769 --> 00:00:59.229 positions inside the free trade zone. 00:00:59.230 --> 00:00:59.660 For the U. 00:00:59.660 --> 00:00:59.800 S. 00:00:59.839 --> 00:01:05.000 market, Mexico is seen as a provider which is close, inexpensive, and trustworthy. 00:01:05.000 --> 00:01:06.119 In 00:01:06.800 --> 00:01:07.814 2021, the year for free trade. 00:01:07.815 --> 00:01:12.205 Following the signing of the USMCA free trade deal, Mexico's automotive 00:01:12.205 --> 00:01:16.925 sector attracted over 5 billion in foreign direct investment. 00:01:17.304 --> 00:01:19.294 And it's not only the automakers. 00:01:19.514 --> 00:01:24.434 Providers of car parts are following close behind, particularly from China. 00:01:24.435 --> 00:01:28.294 The 00:01:28.294 --> 00:01:32.264 rules of origin redefinition has brought operations to Mexico, which 00:01:32.264 --> 00:01:34.124 were previously based in Asia. 00:01:34.444 --> 00:01:39.404 One example is Ketai Industries, a Chinese company that makes precision car parts. 00:01:39.880 --> 00:01:44.700 It's now based in Mexico, following its first ever investment outside of China. 00:01:46.450 --> 00:01:50.730 As for the future of the industry, a 6 billion investment in a Tesla 00:01:50.779 --> 00:01:54.610 gigafactory in the north of the country provides a clear hint. 00:01:54.899 --> 00:01:59.420 With the manufacturing shift towards electric vehicles, so much 00:01:59.420 --> 00:02:03.110 foreign investment is presenting opportunities for local providers, 00:02:03.370 --> 00:02:06.679 a relatively underdeveloped part of the national sector. 00:02:10.215 --> 00:02:13.315 One challenge here is that there are very few electric vehicle parts 00:02:13.335 --> 00:02:18.085 providers, just 10 percent of those compared to internal combustion vehicles. 00:02:18.355 --> 00:02:22.614 So this is presenting opportunities for Mexican businesses to grow 00:02:22.614 --> 00:02:24.625 in the market and create jobs. 00:02:26.365 --> 00:02:29.685 As foreign investment grows, the automotive industry in Mexico 00:02:29.940 --> 00:02:33.870 Businesses here now have the chance to take on a greater role in their 00:02:33.930 --> 00:02:36.060 own country's booming sector. 00:02:36.460 --> 00:02:39.389 Alistair Bavstok, CGTN, Mexico City.