Shannon O’Neil, Council on Foreign Relations, 12/16/11
It is worth reading the Woodrow Wilson Center Mexico Institute’s new study by Christopher Wilson, entitled “Working Together: Economic Ties between the United States and Mexico.”
The report is packed with examples and statistical evidence of the deepening integration between the United States and Mexico since 1993 (the signing of NAFTA), and concisely explains why this relationship is so important and beneficial for the United States.
In terms of trade, for nearly half of U.S. states, Mexico is the number one or number two export destination. For border states such as Texas, New Mexico, and Arizona, up to a third of all exports head to our southern neighbor.
The Mexico Institute is pleased to present its newest publication, Working Together: Economic Ties between the United States and Mexico. The report looks at the ways in which regional economic cooperation can enhance competitiveness, stimulate growth and create jobs.
Mexico already buys more U.S. products than any other nation except Canada, but more than just an export market, Mexico and the United States are partners in manufacturing. Through a process known as production sharing, the two countries actually work together to build products.
Imports from Mexico are therefore unlike imports from any extra-continental partner in the way they support U.S. jobs and exports. A full 40% of the content in U.S. imports from Mexico is actually produced in the United States (See page 17 of the report).
There is no doubt that the economies of the United States and Mexico are facing serious challenges. While some of the risk is due to external pressures, whether increasing competition from Asia or fears of crisis in Europe, much of the solution lies in strengthening regional competitiveness. The path forward, then, must be based in a clear understanding that the United States and Mexico are ultimately partners rather than competitors.