Speech for Ambassador Medina Mora on the occasion of the 82nd Conference of Mayors Winter Meeting on January 22, 2014, at the Capital Hilton Hotel.
It is widely said that all politics is local, but I think we could also say that all relevant policies are local as well. I am a firm believer that local policies are one of the most, if not the most, important factors affecting the lives citizens.
I would like to thank the U.S. Conference of Mayors for hosting us, and especially Mayor Scott Smith of Mesa, Arizona, as President and Mayor Stephanie Rawlings-Blake of Baltimore as Vice President. It is an honor for me to share this table with all of you.
It is also a great honor to share the podium with Secretary Penny Pritzker, with whom I had the opportunity of launching the US-Mexico High Level Economic Dialogue in September 2013 in Mexico, where we had several members of the Cabinet of both countries. Secretary Pritzker and I share many things, from a business background to both our sons being Yalees. Secretary Pritzker, we are looking forward to your upcoming trip to Mexico, the first, I think, of your international commercial missions abroad. I hope to form a close friendship with you in the years to come.
I would also like to mention that Mayor Eleazar Eduardo García Sánchez from Pachuca, Hidalgo, was supposed to travel to Washington to sign a Memorandum of Understanding between the National Federation of Municipalities of Mexico and the U.S. Conference of Mayors. Unfortunately, due to the snow storm, he was unable to come. Fortunately, Sergio Arredondo is here in his representation.
The United States is going through one of the most important transformations of this century: the changing demographics and the tremendous growth of Latino communities in cities all across the United States. The DNA of this country is changing, and it is fresh, young, and full of opportunities.
Latinos are the nation’s largest minority group and among the fastest growing populations. According to the U.S. Census Bureau, the Latino population in 2012 was 53 million. That is 17 percent of the total U.S. population, and the numbers are even more prominent in your cities. The Hispanic share of the total population in metro areas ranges from 20 percent in San Francisco and Sacramento, to over 80 percent in Brownsville, El Paso and Laredo. Miami and San Antonio – with 55 percent each – are among the 10 largest metro areas and places where Hispanics make up a majority of the population. And these shares will keep growing.
I think the message is clear: America is changing. We can be afraid of this change or embrace it, but we cannot deny it. And nobody is in a better position for embracing change than city governments.
Now those of us who work for the Federal government and frequently claim to have a “national perspective” can be accused –often with good reason- of missing out on everyday realities at the local level. That is one reason why I was so keen to address you this afternoon. Mexico, and the United States (along with Canada) are building a vision for North America, but we will not go anywhere without the involvement and support of cities.
There may not be another bilateral relationship in the world as complex the relationship between Mexico and the United States, and there may not be two countries that are more important to one another. We share a border that is two thousand miles long; we trade more than 1.3 billion dollars’ worth of goods and services per day –that’s one million dollars a minute!-; we share a complex history that still continues to shape our current reality; and above all, we share a people.
The US-Mexico relationship has evolved considerably over the past few decades. Twenty years ago, the North America Free Trade Agreement came into effect and those years have transformed the way our countries interact with each other. It removed trade barriers facilitating cross-border movement of goods and services, and provided new investment opportunities; a deeper economic integration in the region has taken place. While the goal of the agreement was the establishment of a free trade area, something more has happened—North America has become a region of shared production. The US, Mexico, and Canada – we - are building things together and competing as one unit in the global economy.
Detroit and Ontario were joined by Mexican cities like Puebla, Monterrey and Aguascalientes in forming the North American auto platform, while Seattle, Los Angeles and Wichita, Montreal and Guaymas, Chihuahua, and Querétaro are strong in aerospace. Those are examples of how North America is building its strengths by integrating value chains very effectively.
But let’s look closely at the numbers. Bilateral trade between Mexico and the United States has grown to almost 500 billion dollars. In 2012, total US exports to Mexico reached 217 billion dollars, which is more than US exports to Japan and China combined, or to all the BRICS combined, and almost as much as to the European Union. The White House estimates that 6 million jobs in the US depend on exports to Mexico. And by the way, goods that the US imports from Mexico have, on average, 40 percent US content. Imports from China have 4 percent US content. So by comparison... 4 to 40.
This last detail is important because I would venture to guess that few people are aware of the extent to which the United States and Mexico compete together as one unit in the global economy. The United States and Mexico (as well as Canada), build things together to sell here and abroad. While the tag may say Made in Mexico or Made in the United States, more and more, those products are actually just Made in North America and the label should reflect that. To put it simply, in the paradigm of the new global economy, the interests of Mexico and the United States are aligned because we build and export things together.
By the way, I was also surprised to see that more Mexicans visit the United States as tourists than Americans do in Mexico, and that those Mexican tourists spend more money in the US economy than what American tourists spend in Mexico!
A few months ago, Mayor Scott Smith was in Mexico for the Global Cities Initiative forum and he was rightly recognized for the effort he has made in drawing up a business plan for the Phoenix-Mesa metropolitan area that includes economic development, technology, education and international linkages. It is no accident that I am here today and able to address you. Mayor Smith is already onboard!
The future competitiveness of our region now depends heavily on our ability to enable the full economic potential of regional production chains. North America represents a unique model of integration in which the locations of the three constituent countries are closely linked, and one whose development offers enormous potential for growth and increased prosperity in each of our countries and for all of our cities. In order for North America to reach its true potential in the coming decades, our joint efforts must involve not only high-level negotiations between our federal governments, but an acknowledgment and understanding of the shifting local realities that simultaneously both shape and are effected by the relationship between our countries.