Mexico has a plan for US border

mexico city — President Andres Manuel Lopez Obrador launched an ambitious plan to stimulate economic activity on the Mexican side of the US-Mexico border, reinforcing his country’s commitment to manufacturing and trade despite recent US threats to close the border entirely.

Mexico will slash income and corporate taxes to 20 per cent from 30 per cent for 43 municipalities in six states just south of the US, while halving to 8 per cent the value-added tax in the region. Business leaders and union representatives have also agreed to double the minimum wage along the border, to 176.2 pesos a day, the equivalent of $9.07 at current exchange rates.

Lopez Obrador said the idea is to stoke wage and job growth via fiscal incentives and productivity gains.

Economy Minister Graciela Marquez noted that the border region targeted for economic stimulus accounts for 7.5 per cent of Mexico’s GDP. And in recent years, the 43 municipalities included in the plan have boasted combined economic growth of 3.1 per cent, above the national average of 2.6 per cent for the six years through 2017.

Much of that robustness owes to trade and proximity with the US, the world’s biggest economy. —