Photo credit: Mexico: Dinero, Peso, Moneda by Speaking Latino
“U.S. and Mexican companies do not simply sell products to one another, they build products together”, says Ambassador E. Anthony Wayne
The U.S. Ambassador to Mexico, who spoke to the American Chamber of Commerce earlier this month, emphasised how the two countries are linked together through bonds of friendship and economy that run deeply.
“President Obama said that our two countries ‘are not simply neighbors bound by geography and history. We are, by choice, friends and partners.’ At the heart of this special relationship are very deep and strong economic ties. Since 1993, prior to NAFTA’s implementation, both Mexico’s and the U.S. GDP have grown 56 percent. Bilateral trade has increased fivefold. Mexico exports more to the U.S. than all of the BRIC countries combined”, said Wayne.
To expand on his point of the countries being tied by very strong economic bonds, he explained that the United States’ second largest export market is the neighboring Spanish-speaking North American country. Mexico’s largest trading partner is the United States. Furthermore, for 22 individual states, Mexico is the largest or second largest export market.
The ambassador also spoke of how the border between the two countries is one of the world’s busiest international boundaries. Over one million people cross the border every day, and per day the amount of trade that occurs over the border averages more than $1.25 billion. Growth was a solid 7 percent in 2012 despite the ongoing financial crisis in the United States, with bilateral trade totaling almost $494 billion in the same year. Wayne emphasized that this number does not include services; in fact, if services were included in the calculation, bilateral trade for 2012 would be more than half a trillion dollars.
The Ambassador also highlighted how when it comes to competitiveness on the international market, Mexico and the United States do not simply trade with each other, they build and develop products with each other in a way that can be seen as more of a partnership.
“This means the competitiveness of our two countries is closely linked, and improvements in productivity in one nation make a co-manufactured product cheaper and more competitive on the global market. That is to say, growth in Mexico or the United States boosts exports from both countries: when it comes to manufacturing, we are in it together,” he said.
Mexico currently enjoys free trade agreements with 44 countries, which in fact makes it the country with the highest amount of free trade agreements in the world. Because the country has recently entered the Trans-Pacific Partnership negotiations, both the United States and Mexico will be able to build on their NAFTA foundation. In other words, the U.S. and Mexico will be able to strengthen their economies within the NAFTA countries and will be able to strengthen their economies by increasing trade with Asia-Pacific regions. Access to these Asia markets could mean 198 million new customers and up to a trillion dollars annually in resulting trade.
Mexico provides “just-in-time” manufacturing which is an effective cost-saving tool for American companies, transportation is nimble, and Mexico produces more engineers per year than Canada or even Germany. This talent-pool along with Mexico’s other advantages make the country a natural choice for international manufacturing firms.
Mexico’s growth is good for the U.S. economy, and according to Wayne, more awareness needs to exist about the two countries’ shared economic success.