Trans-Pacific Partnership (TPP) Talks Advance in Texas

Office of the United States Trade Representative, 5/16/12

The United States said today that TPP partners – Australia, Brunei Darussalam, Chile, Malaysia, New Zealand, Peru, Singapore, the United States, and Vietnam – made better-than-expected progress at the twelfth round of negotiations that formally concluded today outside Dallas, Texas.

U.S. negotiators have reported to U.S. Trade Representative Ron Kirk that the progress achieved during this round has further narrowed differences in the text and the teams can now see a clear path forward toward conclusion of most of the more than 20 chapters of the agreement. A few TPP negotiating groups will continue to meet in Texas for the remainder of this week.

The TPP agreement is an important element of the Obama Administration’s efforts to support the creation and retention of high-quality jobs for Americans by increasing exports to the vibrant economies of the Asia-Pacific region. The United States and its eight partners are determined to expeditiously complete a comprehensive, next-generation agreement. During this eleven-day negotiating round, the teams focused heavily on making as much progress as possible on the texts of the agreement.

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NAFTA key to economic, social growth in Mexico

The Washington Times, 5/14/12

The North American Free Trade Agreement, which went into effect in 1994, has been the key driver of Mexico’s economic and social transformation of the past 20 years, analysts say. NAFTA at first brought an explosion of low-skill-labor factories to the Mexican side of the U.S. border. By the mid-2000s, the trade pact had triggered an increasingly sophisticated manufacturing base that now reaches across Mexico’s 31 states.

“What we’re seeing now is a growth of industry in Mexico that requires more engineers,” said Christopher Wilson, an associate with the Mexico Institute at the Washington-based Woodrow Wilson International Center for Scholars. “To put a name on it, specifically, we’re talking about automobiles and aerospace,” Mr. Wilson said. “Mexico is now graduating more engineers than Germany every year.”

A 40 percent jump in Mexico’s per capita gross domestic product since the inception of NAFTA has brought with it an increasingly robust middle class. “What that means is Mexicans are becoming more educated, and there is more investment in children, which is why you are able to see the development of an aerospace sector,” Mr. Wilson said.

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Chihuahua City is big dog in Mexico aerospace

The Washington Times, 5/14/12

When a jumbo jetliner touches down almost anywhere in the world, the last thing on the pilot’s mind is that the plane’s brakes likely were made in the capital of one of the most crime-riddled states in Mexico. Behind the headlines of warring drug gangs and a soaring murder rate in Mexico, a fast-growing high-tech economy centered on the aerospace industry has sprung up in recent years.

In Chihuahua City alone, 36 aerospace plants have opened since 2007 as a growing number of international parts makers use the city as a base for tapping a massive airplane-production market in the United States. “Our first objective was to get into the U.S. market and get a deal with U.S. customers,” said Nicolas Maillard, director of the French-owned Manoir Aerospace plant in Chihuahua City, 235 miles south of El Paso, Texas.

Shiny, precision-shaped steel discs produced by the plant are shipped to companies in Ohio and Kentucky, where they are added into the assembly line for brake systems on the Boeing Co.’s commercial airplanes. With the average cost of manufacturing labor running about $6 per hour in the city, a new era of high-tech growth is taking root. “The real advantage is the cost of labor,” Mr. Maillard said. “In France, labor would account for about 30 percent of the cost of production on an item like this. Here, it’s roughly 10 percent, and we’re closer to the market we’re trying to reach.”

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Improvement of Mexican Economy depends upon U.S. Industry [In Spanish]

Reuters, 5/7/2012

The Mexican government said that it could increase its economic growth forecast for this year if industrial activity in the United States keeps its expansive trajectory, declared chief of economists at the Department of the Treasury.

The better-than-expected behavior in the American productive apparatus during the first trimester brought about  various institutions of economic studies to revise their growth projections for Mexico, above the official forecast of 3.5 percent.

Miguel Messmacher, chief of the Unit for Economic Planning at the Department of the Treasury, said that the government will revise its projections only if industrial activity in the United States keeps in its route toward growth of 3.0 percent this year, as expected by the consensus.

“If this forecast is confirmed, it is likely that Mexico grows more than 3.5 percent,” said Messmacher during an interview with Reuters. “What the market expects for the U.S. economy and what we would hope for is that, gradually and as the year advances, the quarterly growth rates begin to accelerate,” he added.

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Mexico and the G-20

On May 1st, the Mexico Institute hosted a discussion on the G-20 and its relevance for Mexico and the world economy. The event took place at the Woodrow Wilson International Center for Scholars.

The group of distinguished panelists was comprised of: Gerardo Rodríguez Regordosa (Undersecretary of Mexico’s Ministry of Finance and Public Credit), Mark Sobel (Deputy Assistant Secretary for International Monetary and Financial Policy, US Department of the Treasury), Arturo Sarukhan (Mexican Ambassador to the United States and Mexico Institute, Advisory Board Member), Andrés Rozental (Mexico Institute, Advisory Board Member, President, Rozental & Asociados, Non-Resident Senior Fellow, Brookings Institution), Colin I. Bradford (Nonresident Senior Fellow, Global Economy and Development), and John W. Sewell (Senior Scholar, Author; Former President of the Overseas Development Council (ODC))

View video here:

Op-ed: Mexico’s secretary of economy: We deserve a seat at trade table

The Dallas Morning News, Bruno Ferrari, 5/4/12

While governments and the public have been concentrating on challenges to global financial recovery, a historic economic alliance has been budding in meetings held around the world. The alliance is called the TPP, for the Trans-Pacific Partnership, an ambitious accord to promote a significant expansion of trade among Pacific nations, and this week Dallas hosts the 12th round of TPP negotiations.

What exactly is the TPP? It is composed of nine nations — the United States, Australia, Brunei, Chile, Malaysia , New Zealand, Peru, Singapore and Vietnam. Their aim is to create a free-trade zone that not only eliminates tariff and nontariff barriers to goods and services but also develops regional supply chains to speed the production, sale and movement of goods, coordinates regulatory regimes, helps small- and medium-sized firms export more, and ensures state-owned enterprises compete fairly with private companies.

The TPP negotiations are the most important trade talks in the world, and the TPP accession process requires consensus. The United States should take the lead to give Mexico a seat at the table.

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Event Announcement: Mexico Moving Forward (Symposium Today)

The Center for U.S.-Mexican Studies at the School of International Relations and Pacific Studies will host its 2012 edition of the symposium Mexico Moving Forward today from 8:30 a.m. to 6:30 p.m. (Pacific Time)

This year’s symposium overarching theme is promoting development in Mexico by addressing the issues of regulation, human capital, social protection, informal economy, and entrepreneurship. The theme was inspired by a paper written by IR/PS Professor Gordon Hanson titled, “Why Isn’t Mexico Rich?”

General information about the event can be found here: http://usmex.ucsd.edu/events/mmf/

Op-ed: 3 things Americans don’t need to worry about

Chicago Tribune, Stephen R. Kelly, 5/2/12

The United States is not being overrun by illegal aliens, is not running out of oil or natural gas, and is not being sucked into the vortex of Mexican cartel violence along the border.

In fact, illegal immigration is at a 40-year low, oil production is at an eight-year high and U.S. cities along the Mexican border are among the safest in the nation. All this might come as news to anyone who has closely followed this year’s presidential primaries, whose general theme seemed to be that America is circling the drain. To help lift the national mood, here are three things you can remove from your worry list.

Virtually all the GOP presidential candidates have talked about illegal immigration in starkly negative terms, with the presumptive nominee, Mitt Romney, proposing further crackdowns so undocumented immigrants “self deport.” But the numbers suggest this rhetoric has been overtaken by events.

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Nine Key Changes for Mexico [In Spanish]

Nexos, 5/1/2012

In its May edition, Nexos features nine articles that comprise a guideline for national change to: improve the education system, eliminate regressive subsidies, unleash Pemex, open the Federal Electricity Commission, punish violence, integrate the Army to civic life, have governments make responsible purchases, make social protection a universal right, and adequately invest in the development of babies.

This post features a summary of each of these nine articles and their proposals for improving Mexico.

Mexico-Brazil FTA: Still a Dream?

Latin Business Chronicle, 5/1/12

When Mexican president Felipe Calderon met with Brazilian president Luiz Inacio “Lula” da Silva in Cancun in 2010, the leaders of Latin America’s two largest countries announced plans to begin negotiations on a comprehensive free-trade agreement between Brazil and Mexico.

A few months later, a delegation of Brazilian officials traveled to Mexico to begin preparatory work for a hypothetic reduction of tariffs on all goods traded between the two countries. “We want to partner with Brazil,” Calderon said. “The strongest economies in Latin America are Brazil and Mexico. Imagine what we can do together; imagine if we complement each other.”

Two years later, that sort of optimism has been drowned out by a dispute over the fate of “ACE 55,” the Economic Complementarity Agreement that established rules for gradually deregulating automotive trade between Brazil and Mexico back in 2003.

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