Auto Parts origin classification dispute among TPP countries

An article in the Wall Street Journal (September 3, 2015) titled ” Auto Parts dispute Taps the Brakes on Pacific Trade Deal” describes disagreement between Japan, Mexico and the US regarding auto parts that will be considered free of duty under the Trans-Pacific Partnership agreement (TPP). Mexico prefers such parts to have at least 50% of their content from TPP countries while Japan uses components from Thailand and China (non TPP countries) and does not like such constraints. US automakers prefer some level in between that preferred by Japan and Mexico.  Will the impact of such constraints on global supply chains cause a shift to TPP country of origin suppliers ? Should the importance of the auto component industry to Mexico be considered when setting TPP guidelines, given that other countries get rules changed to reflect their comparative advantage ? How should this balance be struck when setting TPP country definitions and should it be standardized across industries ?

Managing Smart Manufacturing

In a description of the National Science Foundation sponsored center for Smart process Manufacturing ( the authors suggest that market disruptions such as a “$3000 automobile or a $300 personal computer” might be outcomes.  Plant integration, plant optimization and manufacturing knowledge are listed as the phases to get to this reality.  What are the barriers to such an evolution in manufacturing ? How much integration of people, process and technology needs to happen to transform existing manufacturing ? Will leadership for this transformation come from small, agile companies who, when successful, will be integrated into larger ones or can the large companies lead such a transformation ? Finally, how global will this phenomenon need to be to transform supply chains ?