Jorge Aztiazarán OrcíMayor, Tijuana, Baja California

Kevin K. McAleenanActing Deputy Commissioner, U.S. Customs and Border Protection

Christopher Sabatini, Senior Director, Policy, Americas Society/Council of the Americas

Christopher Wilson, Senior Associate, Mexico Institute, Woodrow Wilson International Center for Scholars

Dear friends,

I imagine my fellow panelists, all of them good friends, will speak about very concrete policies and projects. I want to offer a vision for the future, and propose a new perspective that could inform public policy.

The topic of this session—Mexico in peace, migration, security and international trade—brings together a number of substantial themes that are rarely seen gathered in the same basket, and often viewed in very isolated ways. Peace and security are often only looked at by analyzing crime rates. Migration is frequently treated as a sort of problematic loose nail to be hammered back into place, particularly in public discourse. International trade is normally analyzed in technical terms: trade balances, FTA negotiations and the like.

So when I was asked to address the audience as a part of this panel, I had to reflect on what Mexico in peace actually means. Low crime rates and access to justice are of course central to the development of our country, but I do not want to focus on those topics today. I want to focus on the combination of factors that can make North America the most prosperous region in the world. Our desire for success as a global trading platform requires us to look at the way our geography, resources and people combine to give our region its intrinsic value.

International economists have long known that trade flows behave similarly to the laws of gravity—size and distance are key factors in determining how economies interact with one another. Large economies within close proximity to each other will naturally have an intense trade relationship. Booming intra-regional trade in North America should thus come as no surprise, especially since NAFTA reduced a host of tariff and non-tariff barriers that hindered the free flow of market forces.

In addition to the intense trade born from our shared proximity and size, some individual industries within our different nations gravitate together in clusters. In North America, several of those clusters are closely linked through the integrated supply and production chains that Mexico, the United States and Canada developed once a free trade agreement cleared the way for our three economies to interact the way that “gravity” intended. We are very competitive in the automobile and aerospace industries precisely because of the way our interconnectedness allows us to produce things together to sell to each other and export to other regions.

Despite these successes, there are still high transaction costs that impede the seamless operation of production chains in the region. We suffer from inefficiencies and bottlenecks at border crossings, and infrastructure across the region which is not always on par with that of other regions with which we compete.

In this area, government interaction with the private sector is of great importance. Things like Regional Border Master Plans that allow local stakeholders to provide input into infrastructure planning and traffic management strategies to expeditiously process trusted traders are key initiatives in creating the conditions for our regional competitiveness.

There is also still significant room for regulatory cooperation, which would help end the “tyranny of small differences” that can have a very adverse effect on the efficient operation of production chains.

Through the Mexico-US High-Level Economic Dialogue (HLED) launched one year ago, we are mapping industrial clusters and jointly identifying and developing strategic logistics corridors to enhance the connectivity of key industry clusters and supply chains. We are doing this in close connection with the private sector to ensure that trade volumes warrant revamped infrastructure and additional human resources in the corridors chosen.

Another issue of critical importance is the way in which we develop our most valuable asset—human capital. We are a region of 474 million people, counting Mexico, Canada and the US, and almost 520 million if we draw the border in the Darien rather than the Suchiate. We have been at the center of unprecedented migration patterns and those patterns are changing constantly. Migration between Mexico and the US has been at net zero in recent years, yet there has been a significant increase in migration from Central America, both into Mexico and into the United States.

The movement of people across our borders has posed public policy challenges to all our nations, but in my view, this same movement is the single greatest asset our region has. For example, it is due to the large numbers of Hispanics that live in the US today that this country will have positive demographics in twenty years. Meanwhile, China will soon become old—in fact it will likely grow old before it grows rich.

But demographics are not enough. To develop the region’s potential, we need to ensure that innovative, high growth industries can access solid labor markets. A potential policy prescription for this would be certifying people who are able to work legally throughout the entire region. That would require developing a framework for recognition of qualifications, a broad project that must not be looked as just a small part of educational exchanges. It is possibly one of the most important challenges that we must analyze at if we are to contribute, as policymakers, to strong and competitive industrial clusters in the region.

Since 2005, Mexico has been implementing certifications pilot programs in the US and California is leading the way with a bill that is under consideration in the state legislature to ease professional licensing rules for immigrants.

Oil and gas, healthcare and aerospace are growing industries that have specific needs for trained individuals. A recognition of qualifications framework will allow welders, nurses and technicians to train in one country and look for a job in another, and it will enable employers to find the qualified individuals they need.

In closing, with smart policy, we can use the very things we are often told hold us back to propel us forward. However, getting there from here means having a vision of a prosperous and peaceful North America that looks at migration and the border not as problems, but as opportunities that can help us ensure a better future for the region.

Thank you.