NEW PUBLICATION | Growing Together: How Trade with Mexico Impacts Employment in the United States

growing-together-employment-sectionBy Christopher Wilson

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The United States and Mexico trade over a half-trillion dollars in goods and services each year, which amounts to more than a million dollars in bilateral commerce every minute.  With such a large volume of trade, it is not hard to believe that the number of jobs that depend on the bilateral relationship is similarly impressive. New research by the Mexico Institute shows precisely that: nearly five million U.S. jobs depend on trade with Mexico.

The study shows that if trade between the United States and Mexico were halted, 4.9 million Americans from across the country would be out of work.

This essay analyzes the employment impact of bilateral trade on the U.S. economy. Read the essay here.

Key Findings

  • Nearly five million U.S. jobs depend on trade with Mexico… Our model shows that if trade between the United States and Mexico were halted, 4.9 million Americans would be out of work.
  • Many times, it is the availability of cost-efficient inputs that allows U.S. companies to stay competitive enough to fend off competitors from outside the region and to grow exports in the face of fierce global competition. In this way, not just exports but also imports from Mexico help support jobs in U.S. industry.
  • The auto industry, which is probably the single most integrated regional industry, is a perfect example of the benefits of trade integration. Without the availability of nearby Mexican plants to do the final assembly of light vehicles, it is quite possible that the vast U.S. parts producing network for these vehicles would migrate to someplace outside of the continent.
  • Misperception and scapegoating has certainly played a role in creating the current negative political environment around trade…but so has the very real failure of U.S. policymakers to adequately address the challenges facing middle-class Americans.

This essay is part of our project Growing Together: Economic Ties between the United States and Mexico, which explores the bilateral relationship in detail to understand its nature and its impact on the United States. Throughout the fall of 2016, the Mexico Institute will release the findings of our research on our website and social media, using the hashtag #USMXEcon.

Read the essay

Drug-Smuggling Tunnel, Found in San Diego, Is Longest Yet

4/21/2016 The New York Times

For all the talk about a wall between the United States and Mexico, the problem with border security continues to be as much below ground as above. On Wednesday, officials in San Diego announced the discovery of another cross-border tunnel built by drug smugglers — the longest one found yet, at about half a mile.

The tunnel had rails, lighting, ventilation and even a large elevator leading to a closet in a modest house in Tijuana, United States Attorney Laura E. Duffy said. On the San Diego side, where the tunnel emerged in an industrial park in the Otay Mesa neighborhood, the authorities arrested and charged six people last week and confiscated more than a ton of cocaine and seven tons of marijuana that they said had been smuggled through the passage — the largest drug seizure associated with a tunnel….

[…]“A package of cocaine or heroin is much easier to move and hide than a person, and the profit it represents is far greater,” said Christopher Wilson, deputy director of the Mexico Institute at the Woodrow Wilson International Center for Scholars, a policy research group. “Working with terrorists would bring a huge amount heat on the cartels, and that’s bad for business.”

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From Obstacle to Asset: Re-envisioning the U.S.-Mexico Border

4/19/2016 Forbes

By Christopher Wilson and Erik Lee

forbesThe U.S.-Mexico border has yet again made an appearance in the political theater of the U.S. presidential campaign, starring in its traditional supporting role as a stock villain character. Though the political dialogue sounds like a re-reading of a script written in the 1990s or early 2000s when Mexican migration peaked, the discussion on the ground in most—but not all—U.S.-Mexico border communities long ago moved on to regional economic development. It is a largely positive discussion that could not be more different than what we are hearing at the national level.

Throughout the border region, local leaders from the public and private sectors are asking themselves how they can form cross-border partnerships to leverage assets in their sister cities and strengthen their local economies. They are looking to create a border that connects the United States to Mexico at least as much as it divides our two nations. A close look at the economic data, however, reveals divergent local economies and major border barriers. In our recent report, Competitive Border Communities: Mapping and Developing U.S.-Mexico Transborder Industries, we found that while advanced manufacturing industries such as  aerospace, automotive and medical devices often predominate in Mexican border communities, RV parks, retail and freight transportation are often the most concentrated (and often low-paying) industries in U.S. border communities.

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Depressed Energy Prices Cause Decline in U.S.-Mexico Trade


2/23/2016 Forbes.com

By Christopher Wilson, Deputy Director, Mexico Institute

forbesFrom 2009-2014, U.S.-Mexico trade skyrocketed. Bilateral trade grew 75%, faster than U.S. trade with any other major trading partner, including China (61%), and importantly, both imports and exports were growing rapidly. In 2015, trade growth came to a screeching halt, though strong fundamentals suggest this may be more of a temporary blip than a new trajectory.

The Census Bureau recently released U.S. merchandise trade statistics for 2015, and though Mexico is still the United States’ second largest export market and third largest overall trading partner, for the first time since the economic crisis of 2008-2009, U.S.-Mexico trade declined from the previous year’s level. Interestingly, as shown in the graph below, U.S.-Canada trade dropped sharply in 2015, allowing China to become the United States’ top trading partner. In 2014, the two countries traded $534.3 billion, but in 2015 that number fell to $531.1, a decline of some $3.2 billion dollars. U.S. imports from Mexico basically held steady, growing from $294.1 to $294.7 billion, although this apparent stagnation masks multiple underlying trends. Exports, on the other hand, dropped some $3.8 billion. This brief analysis examines recent trends in bilateral trade and their implications for the future of U.S. and Mexican economies.

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Andres Oppenheimer: Obama’s TPP may reshape world trade

2/6/2016 Miami Herald

The formal signing last week of the world’s biggest trade and investment agreement — the Trans-Pacific Partnership, or TPP — went almost unnoticed in most countries, but it could soon start to change the world’s economic and political maps.

One of the reasons why the 12-country trade agreement’s Thursday signing ceremony in New Zealand drew little world attention was that neither President Barack Obama nor other leaders of participating countries attended the event, and chose to send their trade ministers instead…

…“The TPP does not aim to create divisions within Latin America, although it will accentuate the contrast between TPP member countries’ pursuit of export-oriented growth strategies, and the more closed economic models of countries such as Brazil and Venezuela,” says Christopher Wilson, of the Woodrow Wilson International Center for Scholars’ Mexico Institute.

The “bridge to nowhere” now connects the United States and Mexico

2/4/2016 Mexico Institute via Forbes.com

By Christopher Wilson and E. Anthony Wayne

On February 4, Mexican President Enrique Peña Nieto and U.S. Secretaries of Homeland Security and Commerce are scheduled to inaugurate the new border crossing just south of El Paso, Texas and Ciudad Juarez, Chihuahua. Once called the “bridge to nowhere” because the U.S. half was completed before the Mexican portion was built, the international bridge and port of entry facilities at Tornillo-Guadalupe will now help manage the massive legal flows of goods and people across our border.  Over $1 million dollars of trade per minute crosses our common border and an estimated 950,000 people legally cross the border each day to study, visit family members, do business and go shopping.

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Mexico Paves the Way for Marijuana Legalization

11/5/2015 Huffington Post Live

CW huffpostMexico’s Supreme Court ruled Wednesday that individuals have the right to grow and distribute marijuana for personal use. Is this pushback to years of strict U.S. drug policy imposed on Mexico? And what does it mean for the region’s war on drugs?

The Mexico Institute’s Deputy Director Christopher Wilson joined Huffington Post Live to discuss the Mexican Supreme Court’s ruling and its effect on the U.S.-Mexico relationship and the war on drugs. Other guests included Sylvia Longmire, Author of ‘Cartel: The Coming Invasion of Mexico’s Drug Wars’ and ‘Border Insecurity’; Isaac Campos, History Professor, University of Cincinnati, Author of ‘Home Grown’; and Hannah Hetzer, Policy Manager of the Americas, Drug Policy Alliance.

Click here to watch the segment on Huffington Post Live.