I want to begin by thanking the Chicago Council on Global Affairs for inviting me to join you today. In particular, I want to thank Ivo Daalder and Alejandro Silva for the warm welcome and introduction. Last but not least, I want to thank Rachel Bronson for agreeing to moderate the Q&A section today; a conversation that I am very much looking forward to having.
It is certainly easy for someone like me to feel at home here in Chicago. On a personal level, it feels like home because I spent many summers in this city as a child. And as a Mexican, it feels like home because so many of my countrymen live here in Chicago.
The large population of those with Mexican ancestry in this country is just one of the things that bind our two nations together. Today, Mexico and the United States are connected like never before, but one of the challenges we still face is updating public perceptions about each other and our relationship. Earlier this year, the Chicago Council released the results of a survey on how Mexicans and Americans view each other. I want to highlight a couple of findings:
- In the two decades since the implementation of NAFTA, Americans and Mexicans have grown more positive about the impact of NAFTA on their countries. But in a classic case of “the grass is always greener”, both our people—and especially Americans—still think the other country benefits more from the deal.
- A majority of Mexicans continue to express a positive view of the United States, while American views of Mexico are at their lowest level since 1994, with fewer than four in ten viewing it favorably.
In terms of the benefits of our bilateral relationship, there is a disconnect between public perception and reality. What I found most interesting and revealing in the survey, however, was this:
- Almost half of the Americans surveyed have visited Mexico. On the other hand, only 20% of Mexicans have been to the United States.
- This is significant for several reasons, but it is particularly important as it pertains to our perceptions of one another, because travel is especially good at helping us overcome stereotypes.
- The survey also showed evidence of this—Americans who had visited Mexico or had close contact with someone born in Mexico expressed a more favorable view of the country than those who had never visited.
While perceptions are an issue that must be addressed, our economies are strongly bound together, not by government design, but by industries that have understood that North American integration can keep them competitive.
- Bilateral trade between Mexico and the United States has grown from about 80 billion dollars in 1993 to more than 500 billion dollars annually, which translates into approximately one million dollars per minute.
- Mexico is the third largest trading partner of the US and second largest export destination. Mexico is now the 2nd largest destination for Illinois exports (after Canada). And Illinois ranks 4th among states sending exports to Mexico (after Texas, California and Michigan).
- Total US exports to Mexico exceeded US exports to Japan and China combined, or to all the BRICS combined.
- Soccer fans here today know that the World Cup is on its way. You might also know that, in the history of the event, eight different countries have won the World Cup (well, nine countries after Mexico wins it this year). You might be surprised to hear that Mexico buys more goods from the United States than all the eight countries that have won the FIFA World Cup combined (Argentina, Brazil, England, France, Germany, Italy, Spain and Uruguay).
- Illinois yearly exports to Mexico have increased at an average annual rate of 9.5% for the last 20 years, from 1.2 billion dollars to 7.3 billion dollars. One third of Illinois’ primary metal manufacturing world exports, go to Mexico.
- The US Chamber of Commerce has estimated that 6 million jobs in the US depend on exports to Mexico. Today, more than 250,000 jobs in Illinois are the result of trade with Mexico.
So North America has become a region of shared production. A good example of this is taking place right here in Chicago. The Chicago Transport Authority is undertaking a very ambitious fleet replacement plan by incorporating more than seven hundred new Bombardier 5000 series railcars to the city transport. Prototype and line production, featuring state-of-the-art Alternative Current technology, takes place in North America. Car shells are assembled in Quebec, Canada, from parts fabricated there and in Hidalgo, Mexico. The side and end doors and some wire harnesses are installed in Quebec during shell assembly and other wire harnesses are installed in Mexico during underframe assembly. Finally railcars are assembled and track tested at Bombardier's plant in Plattsburgh, NY.
But the Illinois-Mexico partnership is perhaps best illustrated by vibrant entrepreneurship and long-term investment strategies. Take the case of Archer Daniels Midland and their operation of a soybean processing plant in Gomez Palacio, Durango. ADM has grown its participation in Gruma S.A., the world’s largest producer and marketer of corn and flour tortillas. Together, ADM and Gruma operate nine wheat flour mills in Mexico. Two years ago, heavy equipment maker Caterpillar Inc. began construction on a 500 million dollars factory in Nuevo Leon. This will be the company’s largest plant in Latin America and will produce components for Caterpillar’s off-highway trucks, excavators and bulldozers.
While the future holds many opportunities, there are also things to overcome. The significant transaction costs of cross-border trade and investment still remain, as do other impediments that have prevented us from fully unleashing the potential of the Mexican economy. We are tackling these challenges head-on through mechanisms such as the High Level Economic Dialogue, which I can speak about in more detail during the Q & A if you are interested.
Mexico, the United States, and Canada are moving forward to build the bedrock of the North American economy, but a great part of the successful economic integration of North America will depend on its people. Mexicans, Americans and Canadians need to understand each other better. People in the region must feel at ease doing business with each other. Going back to the issue of our perceptions of one another, an important tool in tackling that challenge will be education. Educational exchanges, from students, teachers and researchers alike, are key in developing the region’s capabilities and, simultaneously, are instrumental in overcoming stereotypes and prejudices.
Right now, only about 4,000 U.S. students study in Mexico, with crime and drug violence being the main deterrent. More go to Costa Rica, Argentina and Brazil. Along the same lines, just over 14,000 Mexicans are studying here in the U.S. today. There are more exchange students from South Korea or Vietnam than from Mexico.
We are moving forward on this front. Just one week ago, Secretary of State John Kerry met with Secretary Meade in Mexico where they formally initiated the Bilateral Forum on Higher Education, Innovation and Research. Together, we envision the Forum as a strong association between the governments, institutions of higher education, civil society and the private sector in Mexico and the United States. The mission of the Bilateral Forum is to boost the number of academic exchanges between both our countries through programs addressing student mobility, academic exchange, research and innovation in areas of shared interest and to boost the competitiveness and economic development of the region.
In Spanish we have two different words for the verb “to be”, ser and estar. With that in mind, Mexico, es Latin America but está in North America. Mexico is committed to its North American future. We believe that, as the old African saying goes, there are two good times to plant a tree: twenty years and right now. Twenty years ago, we signed NAFTA and we are now reaping the fruits. What tree needs to be planted today? One that consolidates North American integration, unlocking the potential that two decades of intense economic interaction have brought into existence, and harnesses that integration for the mutual benefit of our people. Those are the challenges before us, and they demand our attention, collaboration and joint action.