Magna International Corporation

MAGNA INTERNATIONAL CORPORATION

Qasim

March 31st, 2016

Table of Contents

Introduction        

-4

Positive or Negative to operate in Mexico        -5

Balance of operating in Mexico and China        -6

Whether they should proceed, why or why not?        

How should Magna capitalize on this opportunity        -7

Conclusion        -8

References        -11

Introduction        

The following research report lists how the TPP agreement will benefit Magna Internationals Inc. in many ways and also few implications while operating in Mexico. This report will talk in depth of how the TPP agreement will give Magna an advantage while operating in a host country and why Magna should continue or reduce operations in the host country and the comparison of whether operating in Mexico is a better opportunity vs. in China. Magna International is a global automotive supplier who has acquired to be one of Canada’s largest company and be the largest automobile parts manufacturer in North America. Magna now operates globally and for the sake of the report, we will only be focusing on Mexico and China.

Advantages & Disadvantages with TPP in Mexico

The TPP will help deepen Canada’s trade ties and also strengthen the existing economic partnerships with other partners in the trade agreement. The TPP agreement will allow Canada to gain access to new markets which they do not currently have free trade agreement with. The TPP will benefit auto parts manufacturing firms like Magna and Linamar in many ways such as accelerate dispute settlement/tariff snapback protection, special motor vehicle safeguard, and non-tariff barrier protections, tariffs. The reason of Magna choosing Mexico as another host country to conduct business in is because of its enormous and open economy which has become an important part of the global supply chain. By operating in Mexico, they are getting better access to other markets and lower costs. Mexico is named one of the 7th most attractive countries to invest in, according to the World Investment Report of 2013 of the United Nations Conference on Trade and Development (UNCTAD), and ranked 9th among the 25 most attractive countries for investors worldwide. Magna chose Mexico for many reasons, one being them being ranked the 8th vehicles producer worldwide and also because of their vast amount of shipping to international markets.