Under Secretary of Commerce For International Trade Francisco SÁnchez
The Woodrow Wilson Center's Mexico Institute
"U.S.-Mexico Trade Policy in an Era of Global Competition"
Tuesday, November 20, 2012
As prepared for delivery
Thank you very much, Andrew (Selene), for that kind introduction, and to the Wilson Center for hosting. It’s truly a pleasure to be here with Beatriz Leycegui, Ambassador Sapiro and so many friends and partners.
It’s especially exciting to be here to celebrate Beatriz’s book. I am so honored I had the chance to contribute. Because of it, I’ve finally achieved my dream of seeing my work on the bookshelves next to names like Marquez, Tennyson, and yes — the Twilight series.
More importantly, this book offers a wide variety of ideas and thoughts about important issues. And I appreciate the chance to help continue the conversation today.
The title for today’s forum asks a simple question: Are the U.S. and Mexico Competitions or Partners? As my piece in the book indicates, my view on this issue is very clear: we are partners. And as I was thinking about my remarks today, my mind wandered back to my time growing up in Tampa, Florida. I was born in Ybor City, which has long been home to a vibrant immigrant population. And we believed in community.
We believed that if a neighbor’s business didn’t get a fair chance to grow — it impacted our overall economic development. We believed that if some kids didn’t get a quality education — it impacted our entire neighborhood’s future. We believed that if one person wasn’t given a fair shake — it hurt us all.
So basically, as neighbors, we recognized that our futures were linked, and that essentially we rose and fell together. That’s how I feel about the relationship between the United States and Mexico. Yes, we share a border, but we also share so much more. We share culture. We share the same values. And we share the same goals for our futures: expanded opportunity and prosperity for our peoples.
That’s why President Obama so eloquently said that our two countries “are not simply neighbors bound by geography and history. We are, by choice, friends and partners.” And at the heart of this special relationship are very deep and strong economic ties.
Our bilateral trade in goods totaled nearly $461 billion in 2011. That’s roughly $1.3 billion per day. If we include services, our trade is well in excess of a half trillion dollars annually.
As these numbers demonstrate, the trend in U.S.-Mexico trade is positive and keeps growing.
- more economic opportunities;
- more jobs;
- more successful businesses;
- and more growth.
In fact, since 1993, prior to NAFTA’s implementation, both Mexico’s and the U.S. GDP have grown 56 percent. Bilateral trade has increased fivefold. And from our viewpoint, Mexico is the destination for more U.S. exports than the BRIC countries combined, supporting over a million American jobs.
So again, it’s clear: the U.S. and Mexico have been, and should continue to be partners for progress. That said, like any partnership, there are challenges. And we need to keep working at it to address the issues that block our potential.
One is border management. In order to meet the full promise of our partnership, we’ve got to ensure that goods cross our borders both safely and efficiently. As close trading partners, the United States and Mexico share highly integrated supply chains and co-production.
Goods manufactured in Mexico can cross the border 4 times before being finished and imported into the U.S. Supply-chains are an important part of the U.S. – Mexico trade relationship.
Unfortunately, this process for production is often plagued by inefficiencies and red tape. Regulations on one side of the border can differ with those on the other side. And the rules are constantly changing, making it hard for businesses to comply.
This causes delays, hurts productivity and ultimately harms the competitiveness of industries in both countries. That’s why we’ve got to get this right. And the U.S-Mexico 21st Century Border Management Initiative is an important effort in reaching this goal.
Interagency officials from both countries have come together with the shared goals of:
- increasing bi-national infrastructure coordination;
- enhancing law and enforcement;
- and ensuring secure flows of goods and people.
With each focus, we strive for common sense solutions that will lead to dollars and cents for our businesses. And I’m proud to say that significant progress has been achieved.
- new commercial crossings open in Arizona and Texas;
- expansions of existing facilities like the Laredo World Trade Bridge — one of the busiest commercial crossings in the nation;
- and — in Brownsville, Texas — the groundbreaking for one of the first new transborder rail projects in more than a century.
We are working with the Government of Mexico to develop proposals for the 2013 action plan, and build on this progress. This complements the work of the High Level Regulatory Cooperation Council who’s work plan was finalized earlier this year, and has the goal of ensuring that regulation balances the need to promote economic growth with the need to ensure the safety of our products and people.
By simplifying the regulatory process — without sacrificing safety — we can build on the economic progress that’s occurred over the years. At the Commerce Department, we’re focused on building on this progress in our own ways as part of our border export strategy.
We’ve been very busy, for instance, in June, we led a trip with U.S. and Mexican government officials, as well as private sector partners along the U.S. – Mexico border. During the trip, the delegation engaged with key local public and private stakeholders to advance border trade.
And we came back equipped with more tools to achieve our goals. In August, Commerce Assistant Secretary Michael Camuñez traveled to Indianapolis to promote the importance of U.S.-Mexico trade to the interior United States. The Assistant Secretary met with companies and stakeholders to discuss the importance of the U.S./Mexico trade relationship, and how the border impacts jobs and supply chains.
And in September, Commerce co-hosted an extremely successful U.S.-Mexico border conference with Arizona State University. This inaugural conference was attended by over 300 individuals, and helped identify best practices and solutions to border-related challenges and priorities. The results of the conference will help formulate policy recommendations that will be shared at a number of key venues over the next year.
These dialogues are key to moving our shared agenda forward. After all, before we can begin to work together — we’ve got to be able to talk together. Then we can move on from there. And as we do, we want to develop sectors with the most potential for prosperity.
One area is energy. It is estimated that Mexico’s energy demand will likely double by 2030. The country has the ability to meet this demand with clean, renewable energy.
It has world class resource potential in:
- and hydropower.
Yet, Mexico currently only gets less than 5 percent of its power from renewable energy. Recognizing this great potential, both President Obama and President Calderon are committed to supporting the development of renewable energy.
They created the U.S. Mexico Bilateral Framework for Clean Energy and Climate Change in 2009, a joint effort that includes developing clean technology. Last year, I was proud to lead a policy mission with 19 clean energy companies to Mexico to help meet the goals of this framework.
And right now, the Commerce Department is considering the creation of a permanent standing platform to link U.S. and Mexican businesses to top-level Mexican decision-makers, helping to create export opportunities for the deployment of clean energy technologies in Mexico.
We are considering it because both governments are clearly committed to achieving the triple bottom line: jobs for people; profits for businesses; and a healthier planet for all. There are also enormous opportunities to boost trade in other sectors like medical technologies, auto parts and tourism.
Now is the time to make the most of them. One important step towards this goal is the invitation extended to Mexico to take part in the Trans-Pacific Partnership. It is widely believed that the TPP is the most credible pathway to economic integration in the broader Asia-Pacific, a region of the world with some of the most dynamic and promising markets.
In June 2012, TPP members invited Mexico to join the negotiations. And the United States is eager to work with its neighbor and ally — along with other partners — to increase jobs, investment and growth opportunities for all parties.
Mexico will participate in the next TPP negotiating round scheduled to take place next month in New Zealand. The inclusion of Mexico in the TPP provides an opportunity for our two countries to work together on a new, high-standard agreement for the 21st century, and allows us to build on our trade relationship by enhancing our already integrated supply chains, without having to reopen NAFTA.
That means even more potential for progress. So clearly, when it comes to expanding opportunity and advancing shared interests — the United States and Mexico story is defined by partnership and growth.
Trade between our two countries has surged over the years. And it’s important that we keep this going to strengthen our economies and spur growth on both sides of the border.
As partners, we are working together to make our borders more efficient, without sacrificing security. As partners, we are working together to harmonize regulations so that businesses don’t have to endure any unnecessary delays or costs. As partners, we are working together to develop promising sectors like clean energy to create jobs and generate growth. And as partners, we are building a more prosperous and secure future for both our countries.
As I close, I am reminded of a Mexican proverb President Obama said when meeting with President Calderon. It goes: “Tell me who you walk with, and I’ll tell you who you are.”
And I second the President’s sentiments that day. The United States is proud to walk with Mexico. And through our work, we're reminded again of who we are, which is two partners bound by a common vision of prosperity and security for both our people.
I look forward to working with all of you to advance this vision now, when President-elect Enrique Peña Nieto takes office and for many years to come.
Once again, my thanks to the Wilson Center and Beatriz for putting together this important discussion.
Enjoy the rest the event.
The International Trade Administration, U.S. Department of Commerce, manages this global trade site to provide access to ITA information on promoting trade and investment, strengthening the competitiveness of U.S. industry, and ensuring fair trade and compliance with trade laws and agreements. External links to other Internet sites should not be construed as an endorsement of the views or privacy policies contained therein. This site contains PDF documents. A PDF reader is available from Adobe Systems Incorporated.