PRESENTATION AT COUNCIL ON FOREIGN RELATIONS
Nueva York, 15 de mayo de 2014
Mexico is, by geography, cultural background and economic links a country of many “belongings”.
- Mexico is Caribbean in its common African, European and Asian roots. It shares blue seas and white sand, carnivals and music.
- It is linked to the region with the other 24 members of the Association of Caribbean States and the Mexico-Caribbean Community Summit.
- Commerce is relatively small at 3.3 billion dollars (less than half a percentage point or our total commerce), but significant at the individual country level (e.g. 1 billion traded with Dominican Republic, 2% of its GDP).
- We also shares challenges. Focus is on response to and mitigation of natural disasters and capacity building (geo-referencing, water management).
- We are Central American by ethnicity and proximity. From Maya to Olmec and maize to chilies, the region stretching from central Mexico to northern Costa Rica shares one of the world’s richest historical and cultural legacies.
- We focus our regional dialogue through several multilateral mechanisms: Tuxtla Integration Mechanism, Central American Integration System (SICA), and the Central American Bank for Economic Integration.
- We export to Central America nearly 10% of our non-North American exports (6 billion USD), almost as much as to Spain (7 billion USD). Total trade with the region is 11 billion USD per year.
- Our focus is on mutual prosperity, inclusiveness and security.
- The Mesoamerican Development Project (areas of impact): Risk Management; Environment; Health; Housing; Transport; Energy; Telecommunications; Trade facilitation and competitiveness.
- South America and Mexico embody a common historical and cultural identity. Pablo Neruda, Gabriel García Marquez, Mario Vargas Llosa and Octavio Paz, amongst many others, are as much Chilean, Colombian, Peruvian and Mexican as they are Latin-American.
- Mexico is member of the most important Latin American mechanisms: Latin American Integration Association (ALADI), Organization of American States (OAS), Latin American Economic System (SELA), Inter-American Development Bank (IDB), and the Community of Latin American and Caribbean States (CELAC), of which we are founding members. Also important is our membership in the Inter-American Drug Abuse Control Commission (CICAD) and the Inter-American Human Rights Commission, both subsidiary bodies of the OAS.
- Total bilateral trade with South America is 30 billion USD, a threefold increase in ten years.
- Mexico’s investment in Latin America reached 85 billion USD in the last decade.
- Our focus is on regional integration.
- Pacific Alliance. A common market of more than 200 million people; a 2 trillion GDP economy; 35% of Latin American GDP, 50% of its exports and 70% of its manufactured exports.
- Free flow of goods and services; Mobility of persons; Mobility of capital; Cooperation (education, environment, etc.).
- We are linked to Asia through the Pacific Rim and trade routes that go back to the 16th Century Manila galleons.
- Mexico takes part in prominent Asian dialogue and cooperation mechanisms such as the Asia Pacific Economic Cooperation (APEC), the Pacific Economic Cooperation Council (PECC), the Forum for East Asia-Latin America Cooperation (FEALAC) and the Pacific Basin Economic Council (PBEC).
- Asia is our second most important regional trading partner after North America, accounting for almost 20% of total trade (140 billion usd).
The Trans Pacific Partnership is in its final negotiation stages.
- China: developing an Integral Strategic Association.
- Investment in infrastructure
- Mexico is Japan’s main partner in Latin America.
- Nissan is the number-one car company in Mexico with a market share of more than 25%.
- Samsung, the top Korean company with more than 268 billion dollars in sales, provides top electronics to the Mexican market. One of every 4 smartphones sold in Mexico are produced by this Korean company.
- Modern Mexico is born from the fusion of two cultures: one indigenous and one European. Europe is the reference point for our language, societal norms and form of government.
- Mexico actively participates in European and bi-regional multilateral mechanisms such as the CELAC-European Union Summit, the Ibero-American Conference and the European Bank for Reconstruction and Development. Mexico is also an observer in the European Council and a member of the OECD.
- Free trade agreement (2000): Europe is Mexico’s third commercial partner. Total trade for 2013 was 70 billion dollars, which has grown at a rate of 9% annually since 2000. 30% of our exports outside of North America go to Europe (22 bn usd).
- Investment from Europe is the second largest after North America.
- Volkswagen has been an important player in Mexico’s economy for almost 60 years. They produce 17% of the vehicles sold every year.
- BBVA and Santander have a 34% market share in terms of total assets. Almost 2 out of every 5 pesos loaned by Mexican banks come from these two important financial institutions.
- Mexico has consolidated its place as a global leader in the aerospace sector. Safran ranked as the top French investor in the country in the past few years.
- Geography: 16% of the world’s total surface and 26% of the world’s total coastlines. Privileged land, air and sea connectivity.
- Population: 460 million and ~610 million by 2050. Societies share basic principles such as democracy, the respect of human rights, and free trade.
- Natural resources: Abundant in the region. Mexico is the largest producer of silver, the 7th oil producer and among the top producers of copper; Canada is the 3rd country in terms of timber reserves, the 3rd largest natural gas producer, 2nd producer of hydroelectric generated energy; the US is the 2nd country in terms of wind power, the 3rd in oil production and renewable water resources.
We have 30% of the existing reserves of shale gas, and the region is becoming self-sufficient in oil.
– North American oil production is estimated to increase from 15-m b/d in 2010 to almost 27-m b/d by 2020.
– The impact could imply as many as 3.6 million new jobs by 2020 in the US and 2.5 million in Mexico by 2025.
– Real GDP could be over 2%-3.3% higher in the US by 2020 due to the cumulative effect of reduced consumption costs, higher output and associated activity. In Mexico, the effect of the recently approved Energy Reform on total output is estimated at 0.1% annually starting in 2014 up to 1.6% (i.e. 5.1% vs. 3.5% with no reform).
The agenda with the U.S. and Canada reflects our already close ties and the potential generated by societies that are increasingly interlaced.
- North America Leaders’ Summit. Twenty-six agreements reached. Some examples are:
- Shared and inclusive prosperity: North American Trusted Traveler Program; North American Transportation Plan, starting with freight planning.
- New opportunities for cooperation:
- Innovation and Education: Research, Development and Innovation Council.
- Energy/Climate Change: Declaring North American adherence to high standards in fuel quality, emissions standards, and fuel efficiency for heavy-duty vehicles.
- Citizen Security: Broadening the North American Plan for Animal and Pandemic Influenza to include other health security threats.
- Hemispheric and global issues: Disaster Risk Insurance Initiative for Central America; cooperation on energy in Central America and the Caribbean.
- Economic relationship. Bilateral trade between our countries is arguably already the most integrated in the world:
- Mexico and the U.S. trade more than half a trillion dollars every year, the second largest gross trade flow in the world (506bn; larger than U.S.-China at 460bn and just short of US-Canada at 630bn).
- Mexico is 1st trade partner to 22 states.
- The US buys more from Mexico than from all of Latin America and several European countries combined.
- Over one million dollars per minute of overland transactions.
- Value added: Mexican exports to the U.S. contain 40 cents for every dollar; comparable figure for China is 4 cents.
- Excluding firms in the energy sector, the top 10 American firms have an important presence in México.
- US automakers have a market share in Mexico of 35%;
- More the one of every 10 users have an Apple based intelligent device. Mexico leads Latin America in smartphone penetration.
- General Electric, the world’s leading producer of aircraft engines, has its largest Center for Research and Design outside the US in Mexico
- New bilateral mechanisms to foster the world’s most competitive region.
- High Level Economic Dialogue:
- i. Promote competitiveness and connectivity
- ii. Foster economic growth, productivity and innovation
- iii. Partner for Regional and Global Leadership
- iv. Stakeholder engagement
- Mexico-U.S. Entrepreneurship and Innovation Council (MUSEIC).
- i. Encourage entrepreneurship
- ii. Promote women entrepreneurship
- iii. Engage the Latin American diaspora living in the U.S.
- iv. Develop regional innovation clusters and marketing chains
- v. Develop joint projects on technology commercialization
- vi. Share best practices on financing and promoting high-impact entrepreneurship
- Bilateral Forum on Higher Education, Innovation and Research (FOBESII).
- i. Promote mutual understanding
- ii. Develop a shared vision on educational cooperation
- iii. Boost student mobility and academic exchanges
- iv. Development of human capital and the promotion of innovation and research
- Community ties.
- Exemplified by Miguel Covarrubias’ classic cartoons for The New Yorker and Vanity Fair in the 1920’s and 30’s; the more novel Mexican electronic music group “Tribal Monterrey”, winner of the Latin Grammy Award for best new artist; and Univision’s number one rating for viewers aged 18-49.
- There are 34 million people with Mexican roots in the U.S., 2/3 of them born in America.
- Net migration was zero in 2005-2010. An estimated 800,000 U.S. citizens live in Mexico (five times larger than in Canada). No other pair of countries in the world shares such deep cross-border ties.
- The demographic distribution of California today - 9% African American, 13% Asian, 35% non-Hispanic whites, and 39% Hispanic – is fairly close to what the population distribution will be for the whole of the U.S. in 2050.
- Human capital formation, research and innovation. U.S. 100,000 Strong / Proyecta 100,000 in Mexico.
- Immigrants born in Mexico make up 12 percent of immigrant small business owners, more than from any other single country, followed by immigrants born in India, Korea, Cuba, China, and Vietnam.
- 5 de Mayo celebrations embody a new symbolism for binational ties between Mexicans and Mexican Americans. The Government of Mexico bestowed three national Ohtli awards this year in Washington, DC, recognizing individuals and organizations focused on entrepreneurship, innovation and community advocacy, values that run deep today in our communities and that feed our new bilateral agenda.
- President Obama’s 5 de Mayo address underlined that: “America’s prosperity and security depend on comprehensive, common-sense immigration reform”.
- We are looking ahead to a time when Mexico can benefit, not only from the remittances, but from an increased network of cross-border ties between our societies. Lack of immigration reform is holding this back
- Mexico’s Consular Network in the United States.
- Largest consular presence (50) any country has within another.
- A unique strategic asset in our diplomatic toolbox, to harness local energy into the new US-Mexico agenda.
- As a country of origin, transit, destiny and return of migrants, Mexico places the person’s rights and wellbeing at the center of its efforts. Migrants are also key allies for development.
- Consulates provide services, assistance and protection, while helping Mexicans to maintain ties with their places of origin, and expand their contributions to their communities.
- Health and education programs empower Mexicans regarding labor, legal, and financial issues.
- Consulates reach out to Dreamers, helping them in the process to apply for Deferred Action.
- Consulates help in advancing a balanced agenda with the US (trade, investment, innovation, cultural and academic exchanges).
- Consulates are strong partners for city and state authorities, community organizations, business leaders, religious groups, and cultural institutions.
- Collaboration on Security. We maintain close cooperation at all levels of government.