New David Peters blog on the importance of Mexico
22/11/2016
While still waiting, like all of us, to see more clearly what the implications will be for the global leather industry of the result on November 8, Mr Peters says in giving his early reaction that he fervently hopes that talk of amendment to, and possibly even the removal of, the North American Free Trade Agreement (NAFTA) will prove unfounded.
In the column, which you can read in full in the Blog section of the website, Mr Peters points out that Mexico has had a long and positive history in the leather industry, focused primarily on shoe and vegetable-tanned leathers, but more recently also on automotive.
Several generations of tanners, shoe and allied trade members have prospered and built an infrastructure that not only services the domestic market but offers a viable alternative to Asia. “Over the last decade, Mexico has grown to become the single largest region for automotive leather production,” the blog entry says. “We estimate that Mexico’s daily production of cut parts for auto seating made exclusively from leather consumes approximately 39,250 hides per day or about 10 million hides per year. Virtually every major auto-leather tanner has a presence in Mexico, and the outlook suggests increases as the demand for luxury vehicles continues to grow.”
Because Mexico only produces around 6 million hides a year itself, and only half of these are suitable for making automotive leather, hides also flow from the US to Mexico for tanning to make product for these important customers.
“This is why any change to the existing NAFTA agreement will have a detrimental effect on the leather business,” David Peters says.
Image shows a Volkswagen factory in Mexico.
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