Speeches & Opeds
Ambassador Wayne’s Remarks at AmCham Breakfast
March 11, 2013
Good Morning. It is a pleasure to be here with you all this morning for this 96th Annual Meeting, which in and of itself is a testament to the deep roots AmCham and American companies have in Mexico. I’d like to thank Guillermo Wolf and AmCham Mexico for all their work in helping to make Mexico a better place to do business and Mexico’s economy more competitive. I especially want to thank AmCham President and my friend Carlos Paz Soldan for his outstanding leadership of this fine organization. Let me congratulate the new Board members. I know you are all busy people with companies to run, and that volunteering to serve on AmCham’s Board represents a significant commitment and sacrifice on your part. Last, but not least, I am pleased that Secretary Meade, Senator Guerra and Representative Cantu are joining this morning’s meeting. We look forward to hearing from them later this morning about Mexico’s global leadership role.
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.
Mexico is the United States’ second-largest export market and third-largest trading partner, while the U.S. is Mexico’s number one trading partner. The benefits are felt far beyond the border: Mexico is the number one or number two export market for 22 U.S. states.
One million people and more than 1.25 billion dollars in trade cross the border each day, making it one of the busiest international boundaries in the world. Bilateral trade totaled nearly $494 billion in 2012, a very healthy 7% growth year on year. If we include services, our trade is well in excess of a half trillion dollars annually.
I say this a lot, but it’s true - U.S. and Mexican companies do not simply sell products to one another, they build products together. 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.
Mexico has free trade agreements with 44 countries, more than any other country in the world, and their entry into the Trans-Pacific Partnership negotiations provides an invaluable opportunity to build on the foundation of NAFTA. TPP will provide for further deepening economic integration both within North America and between North America and the broader Asia-Pacific region. The agreement represents an entry into a market of 198 million new consumers who purchase approximately $1 trillion dollars of goods annually. It will help link our integrated supply networks to the growing production chains in dynamic Asian markets while helping to protect the preferential access currently enjoyed under NAFTA. The TPP is designed to address the kind of barriers that impede trade and investment in the 21st century – for example, barriers to digital trade, or services investment, or supply chain development. Addressing these will generate real benefits and create real opportunity for all our economies and businesses, regardless of the level of development, sector, or size of enterprise. The TPP is an ambitious agreement, but one that will set the agenda for future trade agreements and maintain our countries’ position at the forefront of global trade.
Thanks to Mexico’s trade agreements, the increasing labor costs in China, and the nimbleness afforded by cross-border design and assembly processes, U.S. companies are choosing Mexico over other markets for manufacturing and assembly. Especially for small and medium sized manufacturers, Mexico’s proximity allows “just-in-time” manufacturing – which allows them to produce smaller quantities, purchase only what they need to minimize warehousing costs, and thus innovate more – as they are able to change production processes or designs weekly. Automotive production has doubled in the past three years; Mexico is now the fourth largest automobile exporter in the world. Mexico is the number one producer of refrigerators and flat screen TVs in the world, the number one exporter of beer, and the number four provider of IT services.
Mexico produces more engineers than Germany or Canada (over 100,000 a year). This talent pool has attracted investment from a number of advanced global manufacturing firms.
The United States and Mexico have an opportunity to turn a new page. We have a chance to shape perceptions about our two countries and increase awareness of our shared economic story, which is a success story. Mexico’s growth is good for the U.S. economy and vice versa. The government of President Peña Nieto recognizes that economic growth is the driving factor for Mexico. He appointed a cabinet, including Foreign Secretary José Antonio Meade, with a strong economic background.
Mexico and the United States now face important choices that will impact our future economic prosperity. In the United States, we need to accelerate the current economic recovery while investing in our long-term economic competiveness. In Mexico, promising strides have been taken already on needed structural economic reforms. The first significant labor reform in thirty years was passed late last year. Progress in these and other areas such as competition, education and tax collection, will only help to fortify and strengthen our bilateral economic relationship over the year ahead. I know that the AmCham committees have been working diligently with the new administration on these reforms.
In addition, we look forward to continuing our work with President Peña Nieto’s administration to modernize customs facilities and the infrastructure on both sides of the border to make it truly a 21st century border. All of this cooperation will facilitate the secure, efficient, and rapid flow of goods and people while reducing the costs of doing business between our two countries.
Furthermore, we look forward to further promoting our service exports, such as tourism. 13.5 million Mexicans visited the United States in 2011. The U.S. government has implemented some new initiatives to make the United States an even more popular tourist destination.
The process to get a visa to the United States has been simplified. An interview is no longer required in most cases for Mexicans who are renewing their visas. In Fiscal Year 2012, for the first time this century, Mission Mexico processed more than 2 million visa applications. In addition, Mexican citizens are also eligible to participate in the Global Entry program, enabling them to bypass migration lines when entering the United States. We are also expanding our business visa facilitation program, including AmCham Mexico as one of our partners, to help small businesses get visa appointments more easily and quickly. So there are many successes to celebrate but also much work to be done in furthering our relationship. Currently, both administrations are working together to define an economic agenda in order to increase the competitiveness of both our nations in the world, and we look forward to your ideas and your help to be successful.