Introduction to the Corredor Interoceánico del Istmo de Tehuantepec

This section introduces the Corredor Interoceánico del Istmo de Tehuantepec, a project in Mexico aimed at creating its own maritime market and benefiting economically disadvantaged states.

The Potential of the Corredor Interoceánico del Istmo de Tehuantepec

• The project aims to move at least 500,000 containers through the corridor within the first three years.

• It will enhance trade with the United States, making it Mexico's top trading partner.

• The corridor will have the capacity to cross from the Pacific to the Gulf of Mexico in less than 24 hours, reducing costs.

• Rehabilitation of railway lines and specialized terminals will support agro-industry, food, textile, plastic, and machinery sectors.

• The corridor offers competitive advantages such as cost-effective maritime transportation routes and availability of resources.

Advantages of Mexico over Panama Canal

This section highlights Mexico's advantage over the Panama Canal due to its internal cargo distribution and manufacturing capabilities.

Internal Cargo Distribution in Mexico

• Unlike Panama, which primarily serves as a service-based economy for goods crossing through its canal, Mexico is a country that produces, manufactures, and exports goods.

• This manufacturing capability gives Mexico an advantage in utilizing the corridor for its own economic benefit.

Complementing Rather Than Competing with Panama Canal

• While both projects differ in terms of transportation methods (train vs. ship), they are not direct competitors but rather complement each other.

• The true competition for the Panama Canal comes from establishing ten industrial parks along the entire corridor. This would give Mexico a significant advantage and position it as a key player globally.

Infrastructure Development and Manufacturing Potential

This section discusses the goal of the Corredor Interoceánico del Istmo de Tehuantepec to develop a vast infrastructure area and promote manufacturing in the region.

Manufacturing Potential in the Region

• The project aims to transform raw materials into finished products within the factories established in the isthmus of Tehuantepec.

• This would make Mexico a new global manufacturing hub, offering cost savings and time efficiency for companies.

Additional Benefits and Cost Competitiveness

This section highlights additional benefits offered by the Corredor Interoceánico del Istmo de Tehuantepec, including tax reductions and cost competitiveness.

Tax Reductions and Cost Competitiveness

• As part of the National Development Plan, a program will be implemented in the corridor to reduce value-added tax, income tax, and fuel costs.

• This initiative aims to compete with other transportation options worldwide in terms of costs and time efficiency.

Advantages over Panama Canal and Global Trade Flow

This section emphasizes how the Corredor Interoceánico del Istmo de Tehuantepec offers advantages over the Panama Canal and its potential impact on global trade flow.

Advantages Over Panama Canal

• The corridor could save up to five days compared to using the Panama Canal for shipping goods from Asia to the East Coast of the United States.

• It provides advantages for shipping companies and enhances Mexico's viability as a global trade route.

Impact on Global Trade Flow

• The project has the potential to surpass current commercial flows concentrated in the Panama Canal.

• With its strategic location near major economies such as the United States, Pacific Rim, and the European Union, the corridor could facilitate unprecedented trade volume.

Oaxaca's Potential and Integration with Global Industries

This section focuses on Oaxaca's potential within the Corredor Interoceánico del Istmo de Tehuantepec and its integration with global industries.

Utilizing Oaxaca's Potential

• Oaxaca can leverage its resources and become a key player in Mexico's development.

• The state has everything necessary to become a logistics and manufacturing center in the Americas.

Integration with Global Industries

• The project aims to integrate Oaxacan industries into Mexico's export industry value chains.

• With 12 active international treaties covering America, Europe, and Asia, Oaxaca can tap into markets representing over 1.7 billion people.

Conclusion

Desarrollo Logístico y el Corredor Interoceánico

This section discusses the importance of logistics development and the role of the interoceanic corridor in Mexico.

The Attractiveness of the Isthmus

• Rafael Marín Mollinedo, in charge of the interoceanic corridor, highlights that the attractiveness of the isthmus lies in its potential to address saturation issues faced by the Panama Canal and other ports.

• The Tehuantepec Isthmus corridor is seen as an alternative route for goods transit between Asia, America, and Europe.

Competition between Corridors

• Experts suggest that there is a possibility of reducing cargo traffic through the Panama Canal due to competition from other corridors.

• It is clear that both corridors, Panama Canal and Tehuantepec Isthmus, will compete with each other based on tolls and tariffs.

Benefits for Mexico

• Mexico is one of the top 15 economies globally and ranks 12th in terms of exports. It is also a major trading partner with the United States.

• The interoceanic corridor will reduce shipping time by three days from the East Coast and Gulf Coast of the United States to enhance trade relations.

• Due to increased maritime freight costs from Asia to the United States during the pandemic, this project will serve as a logistics platform to improve connectivity between North America, South America, Asia, and Europe.

• The corridor's railway infrastructure will allow for faster transportation of oil through pipelines, containers, and bulk carriers. Crossing time is expected to be reduced from 7 to 4 hours.

Benefits for Mexico's Trade Relations

This section focuses on how Mexico's trade relations will benefit from the interoceanic corridor.

Trade Agreements

• Mexico has a significant advantage in terms of trade agreements, including 12 free trade agreements with 46 countries, 32 agreements for the promotion and protection of investments, and various limited scope agreements within the framework of the Latin American Integration Association.

• Mexico actively participates in multilateral and regional organizations such as the World Trade Organization and the Pacific Economic Cooperation Mechanism.

Boosting Local Economy

• The Mexican government aims to boost the local economy in Tehuantepec by leveraging interoceanic trade. Similar to Panama's experience with the Panama Canal, it seeks to raise living standards from Veracruz to Oaxaca.

• The interoceanic corridor will facilitate transportation of petroleum through pipelines and containers, as well as import and export activities using railways and containers.

Future Demand for New Crossings

• As economies continue to grow globally, existing corridors and canals will become saturated, leading to a demand for new ocean crossings.

• Companies will choose the most convenient option based on their needs. The Tehuantepec Isthmus corridor offers a 309-kilometer route with 10 development polygons located in Oaxaca and Veracruz.

The Interoceanic Corridor Project

This section provides an overview of the interoceanic corridor project in Mexico.

Historical Background

• The dream of connecting the Atlantic and Pacific Oceans through the Tehuantepec Isthmus dates back over 100 years. Despite numerous failed projects, Rafael Marín Mollinedo presented a program for its development on December 23, 2018.

Infrastructure Development

• The project aims to accelerate economic dynamics through a multimodal interoceanic corridor that utilizes various modes of transportation.

• Key infrastructure developments include modernizing ports in Coatzacoalcos and Salina Cruz, improving road infrastructure in Oaxaca and Veracruz, constructing a gas pipeline, and modernizing the Tehuantepec Isthmus railway.

• Additionally, a fiber optic line will be installed along the isthmus to enhance digital connectivity in the region.

Economic Growth and Connectivity

• The interoceanic corridor seeks to create conditions that promote economic growth and improve connectivity for businesses and communities in the surrounding areas.

• The project aims to leverage the geostrategic position of the Tehuantepec Isthmus to compete in global markets for goods transportation.