The coronavirus pandemic has posed a dilemma for world leaders: If we wait too long for a vaccine, we'll do severe damage to our economies.
It's a terrible calculation that politicians, business leaders and scientists are weighing — open things up, but at what cost to human life?
It's an even trickier equation in a globalized world. The Trump administration and some major American manufacturers are antsy and pressuring Mexico to reopen factories. They want North American supply chains rolling again.
Corporate America has benefited from lower wages and laxer health, safety and environmental strictures in Mexico for decades. And they rely heavily on intertwined supply chains between the two countries that fueled $614.5 billion in US-Mexico trade last year, according to the US Census Bureau.
With the Mexican infection curve several weeks behind the US epidemic, experts say workers are right to be concerned about returning too quickly. As of Tuesday, Ciudad Juarez had the largest concentration of coronavirus in Chihuahua state, with 418 cases and 97 deaths.
Jorge Guajardo is a former Mexican ambassador who now works for McLarty Associates in Washington, DC. He spoke with The World's host Marco Werman about the complexity of reopening American factories in Mexico before the country has hit its peak for the coronavirus, anticipated on May 8.
Jorge Guajardo: There are several angles to that question. And yes, you're right. The peak is supposed to hit Mexico on May 8. Clearly, this is a time in which Mexico has got to be very careful in how it goes about opening up its economy. At the same time, Mexico took measures at shutting down many industries that were allowed to operate in other countries as the pandemic progressed...So, there's been also some confusion by manufacturers in why Mexico is closing certain industries that were either deemed essential in other countries or allowed to operate — even if not deemed essential. So, there's been some confusion on what industries can and should operate, while at the same time making sure that the government looks after the health of its citizens. And we have to be very careful about how we go about reopening the economy.
Yes and no. No, because companies that started production in Mexico did not do so to create Mexican jobs. They did so because it benefited their bottom line. And that will be the case in a post-COVID world. They've done well. They have a free trade agreement so they have everything going for them. On the other hand, these are great opportunities for Mexico to capitalize on the reshaping of the supply chain. Probably, as companies move out of China, they may consider setting up shop in Mexico. However, after all this confusion and lack of clarity from the Mexican government, it will certainly raise questions on US company boards when they say, what's happening in Mexico? Why is our supply chain all of a sudden interrupted? And what are we doing to address this?
That's a good question. I hope that won't be the criteria. Like every president around the world, he's weighing the pros and cons, the challenges it represents for the economy — the longer you stay closed and lose opportunities for supply chains — while at the same time, try to capitalize on a regional trading bloc that we've established. But without putting your citizens' health at risk — it's a difficult equation.
So, Mexico has sort of put all of the COVID-19 strategy in the hands of one undersecretary of health [Hugo López-Gatell] who's been somewhat controversial. So we're all in the hands of somebody who's determining the policies of the entire country, but he's not in contact with the rest of the actors or sectors. So, that makes it complicated.
This interview has been edited and condensed for clarity. Reuters contributed to this report.