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Former President of Mexico Talks Trade with Massachusetts Employers

Posted on June 28, 2013

The former president of Mexico, Felipe Calderon, touted that nation as a strong and healthy economic partner for the U.S. in a recent meeting with 70 Massachusetts business executives.

CalderonMexico is the number two destination for all United States goods exports ($213 billion in 2012), outranked only by Canada.   Already a viable manufacturing alternative to China for US firms, Mexico has a skilled workforce and proximity to the U.S. that Calderon said often tip the scales against Asia’s rising wages and increased fuel costs.  President Barack Obama’s visit to Mexico last month signaled the importance of Mexico and its population of 110 million people as a strategic partner and neighbor.  

Mexico’s recent economic growth”GDP has increased steadily since 2010″was the centerpiece of Calderon’s recent remarks, delivered in Cambridge.

Calderon, who stepped down from the presidency in December, emphasized that significant investment opportunities exist in Mexico for Massachusetts companies in the clean energy, waste management, and water innovation sectors.  Improving access to clean water for Mexican citizens is a priority, and there is strong interest in increasing energy capacity from solar, wind and biomass, while decreasing dependence on fossil fuels.

These are likely areas of focus for a Massachusetts trade mission to Mexico now being planned for the fall.  The last Massachusetts trade mission to Mexico occurred in 1999, when then Lt. Governor Jane Swift led a delegation to Mexico City and Monterrey on behalf of Governor Paul Cellucci.

In a February 2013 New York Times op-ed, Tom Friedman predicted, “Mexico will become a more dominant economic power than China or India in this century.”  Even if wide of the mark, Friedman’s bet suggests that Mexico, with which the US shares the world’s busiest border, is rising in prominence and influence:

  • Mexico is Massachusetts’ sixth largest export commodities destination, behind Canada, the UK, Germany, China and Japan.
  • Massachusetts exports to Mexico have increased steadily over the past few years, totaling $1.6 billion in 2012.  Those exports are a bright spot in the Massachusetts trade numbers, as trade with Europe has decreased since 2011.
  • Massport has identified Mexico City as one of the top priority destinations for direct air service to and from Boston.
  • Mexico is committed to free trade, as exemplified by its forty-plus Free Trade Agreements (including NAFTA) with countries around the world. Tariffs have been further reduced over the past six years.
  • If you think your flat screen TV or Blackberry came from China, think again – Mexico is the largest exporter in the world of flat screen TV’s and Blackberrys, and is the fourth largest exporter of automobiles.
  • Fifty percent of Mexico’s population is under 30; interest among young people is strong in US and other foreign brands.
  • Production sharing between the US and Mexico benefits the US economy.  Under production sharing, the same components/parts may cross the border numerous times as the end product is being assembled.  Some experts estimate that imports to the US from Mexico are 40 percent made in the U.S.  This stimulates both economies and results in job creation in both countries. 
  • Although Brazil gets a lot of press as the big economic player in Latin America, Mexico’s economy grew faster than Brazil’s over the past two years, and Mexico is responsible for 60 percent of the exports to US from all of Latin America
  • Net immigration between the US and Mexico is at zero percent today, casting doubt upon the commonly-held belief that illegal border crossings from Mexico are the biggest news in the US-Mexico relationship. Now, it’s all about the economy.