Francisco J. Sánchez, US Under Secretary of State of Commerce for International Trade, on the trade and political relationship between the US and Mexico.
The US’ future is closely tied to the future of the Western Hemisphere. Over 40% of US exports go to the Americas, and those exports are increasing at a faster rate than the rest of the world, generating significant economic gains both for our country and partners across the region.
At the heart of this success is our strong economic ties to North America and the US’ close relationship with Mexico. President Barack Obama has said that our two countries “are not simply neighbors, bound by geography and history; we are, by choice, friends and partners… in the 21st century, we are defined not by our borders, but by our bonds.”
These bonds have grown stronger throughout the years, reaching new heights in 2011; bilateral trade between the US and Mexico reached approximately $460 billion, an all-time record. This translates to more than $1.2 billion in trade flowing every day between our two countries, supporting jobs, boosting businesses, and fueling growth on both sides of the border.
The question both countries must answer now is this: How do we boost trade in order to generate even more economic benefits? One way is to make North America more competitive for the future. Recently, President Obama and President Calderón joined the Prime Minister of Canada, Stephen Harper, for the North America Leaders Summit. Together, they renewed their commitment to strengthening economic ties by making our borders more efficient and secure for both people and products.
As close trading partners, the US and Mexico share highly integrated supply chains and co-production. Goods manufactured in Mexico can cross the border four times before being finished and imported into the US. Supply chains are an important part of the US–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.
To address these challenges, the parties at the recent summit agreed to streamline and coordinate regulations, making it easier for businesses to compete. This work builds on the foundation laid by another effort: the bilateral High Level Regulatory Cooperation Council (HLRCC) with Mexico.
The HLRCC has a mandate to ensure that our governments’ approach to regulation balances the need to promote economic growth with the need to ensure the safety of our products and people.
Doing so will go a long way in making trade more efficient, and ultimately more impactful for our two economies.
Clearly, the US and Mexican governments are making important strides in regulatory cooperation. We are also making progress when it comes to broader border issues. In 2010, during an official state visit to Washington, President Calderón joined President Obama to issue a joint declaration on the 21st Century Border Management initiative.
This declaration committed the US and Mexico to full and renewed cooperation based on the principles of joint border management, co-responsibility for cross-border crime, and a shared commitment to the efficient flow of legal commerce and travel. The initiative has three areas of focus: border infrastructure; secure flows of goods and people; and corridor security.
As part of this effort, the two governments have sought to increase collaboration to reduce the administrative burdens of cross-border trade, design ports of entry that meet the needs of both sides, and protect public safety by integrating law enforcement efforts with other government functions including social assistance and community outreach. Both governments are committed to the full implementation of the 21st Century Border Management initiative in order to address any and all challenges facing our trade.
Additionally, we are working together to support industries with enormous potential to generate economic benefits. One example 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 wind, solar, geothermal, biomass, and hydropower. Yet, Mexico currently gets less than 5% of its power from renewable energy.
Recognizing this great potential, both President Obama and President Calderón are committed to supporting the development of renewable energy. They created the US-Mexico Bilateral Framework for Clean Energy and Climate Change in 2009, a joint effort that includes developing clean technology.
Together, both governments are working to achieve 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 travel and tourism, information technology, and education. Now is the time to make the most of them.
The US-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.
We are doing just that by working together to make our countries more competitive, enhance regulatory cooperation, collaborate on border management, and develop promising sectors. As a result, in the words of President Obama, “I believe our nations and our citizens will be more secure, more prosperous, and in a better position to give their children the lives that they deserve.”
© The Business Year