Good morning. It’s wonderful to be here attending another BCIU event. Thanks, to Jeff Donald for hosting us this morning and for all his efforts. BCIU has played a crucial role over the years in building stronger relations between the private sector and government. This event is just one small part of the mission BCIU carries out every day, and I am grateful for all that you do to support international relations around the world. And I believe that BCIU is a great venue to discuss the common vision shared by the governments of Mexico and the United States to develop strategies and implement policies to ensure that North America is the most competitive, innovative, and entrepreneurial region in the world.
Last year I last participated in a similar BCIU event in New York and it has been an exciting time to work on U.S. – Mexico relations. In the past year, the Government of Mexico has made impressive strides in implementing a series of challenging structural economic reforms. Together, these changes have the potential to significantly increase economic growth in Mexico. Mexico is also well positioned to take advantage of the U.S. economy’s recent recovery which remains one of the few engines of economic growth in the world. A clear example of the Mexican economy benefiting from the U.S. recovery is found in the automotive sector.
Mexico produced 3.2 million vehicles in 2014, a nearly 10% increase over 2013 and exported over 80% of them almost entirely to the United States. Another sector of the Mexican economy that has achieved impressive growth is the Aerospace industry. Since 2002, Mexico’s aerospace sector has been growing at almost a 20 percent compound annual growth rate reaching $5.5 billion in exports in 2013.
The economic and commercial importance of Mexico to the United States, and vice versa, cannot be overstated. Mexico is the United States’ third largest trading partner (behind Canada and China) and our second largest export market. More than $530 billion dollars in trade in goods crossed our border last year – almost $1.5 billion every day.
Over 18,000 American companies have operations in Mexico, and more and more Mexican companies are investing in the U.S. – earlier this week I attended SelectUSA to promote inward investment to the U.S., and we had 14 Mexican companies participating. The importance of our economic and commercial exchange is not a new aspect of U.S. – Mexican relations. Mexico and the United States have long worked towards greater economic integration and reaped the benefits of a robust commercial relationship. However, I do think we are at a special moment in the bilateral relationship when it comes to economic cooperation. Like never before, our two countries are seated together at the table, working through important issues that affect our economies.
This is why in September 2013, Vice President Biden, representatives from eight U.S. agencies including three cabinet members, and Mexican counterparts launched the U.S.-Mexico High Level Economic Dialogue, or HLED – and in January of this year, during President Pena Nieto’s visit to Washington, the Vice President hosted the second cabinet-level session of HLED with seven U.S. Cabinet Secretaries and their Mexican counterparts. The HLED integrates the wide range of important economic initiatives between our two countries with a focus on economic growth, job creation, and global competitiveness. Through the Dialogue, our governments have committed to working together to attract foreign direct investment, promote tourism, improve efficiency within our integrated supply chains, and foster entrepreneurship and 21st century workforce development.
U.S. Commerce Secretary Pritzker and others from both countries have also underscored the importance of input and participation from the private sector, civil society, labor, and from all levels of government to support our bilateral cooperation. A critical element of HLED’s success is the input the two governments receive from stakeholders. The U.S. Chamber of Commerce and its Mexican counterpart, CCE, have organized the U.S.-Mexico CEO Dialogue, which is co-chaired by GE on the U.S. side. The group last met in December in Monterrey, Mexico and shared its perspectives with government officials in the run-up to the HLED meeting hosted by the Vice President in January. I would invite all of you to become familiar with the various areas of focus under HLED and advise us on how we can address your issues best.
Our efforts to create the most dynamic regional workforce in the world are aided, in a large part, in our efforts to increase academic exchange between our countries – developing future generations who speak each other’s languages, understand each other’s cultures, and know how to collaborate in the classroom, the laboratory, and the workplace. That is why President Obama and President Peña-Nieto created the Bilateral Forum for Higher Education, Innovation and Research (FOBESII), to bring together a variety of stakeholders in our efforts to increase the numbers of researchers, students and professors crossing the border in both directions.
Over the past year, we held a series of six workshops that included over 450 stakeholders from government, private, and academic spheres – all working to propel forward the studies and careers of hundreds of students and professionals. With academia and the private sector, we facilitated the goal to send more than 27,000 Mexican students and teachers to the United States in 2014 and together signed 23 new bilateral education agreements. Just this month, we signed an agreement to increase the number of internships, opening up the workplace on both sides of the border for young people to gain practical experience in a variety of sectors.
Education goes hand in hand with innovation. That is why we also formed the Mexico-U.S. Entrepreneurship and Innovation Council (MUSEIC) and have held events designed to improve access to finance for businesses and launched entrepreneurship training sessions. We connected Small Business Networks in Mexico and the United States to share innovative practices and support entrepreneurs on both sides of the border.
We are also working on a shared vision with Canada of making North America the most competitive region in the world – something that American and Mexican businesses are advancing every day through maximizing our integrated supply chains, through enhancing our complementary innovation and entrepreneurship ecosystems, and developing our shared competitive advantage in energy resources.
We’re also doubling our efforts to work with Mexico and Canada to finalize the Trans-Pacific Partnership (TPP) agreement, a historic deal that will further contribute to our North American integration and provide greater market access opportunities.
The 12 TPP partners – the United States, as well as Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam – are responsible for nearly 40 percent of the global economy and one-third of global trade. These large and growing markets are already key destinations for U.S. manufactured goods, agricultural products, and services, and the TPP will further deepen this trade and investment relationship while promoting our values. TPP will also support U.S. jobs by opening up Asia-Pacific markets to exports of “Made in America” goods and services. The trade deal has support from both parties in Congress, and it’s time to come together and support high quality U.S. jobs. Approving an updated Trade Promotion Authority TPA is the first step in that process.
Nevertheless, there is another component to the current situation in Mexico that is of particular importance and cannot be overlooked: that is the need to strengthen the rule of law, promote transparency, combat corruption, and improve security. Crime and violence continue to place a heavy cost on Mexico’s economy and to impede North American integration. The economic reforms reflect an impressive effort to increase the competitiveness of the Mexican economy and to truly reap the benefits of the economic opportunities that North American commercial integration can provide. However, these efforts will not drive growth nor attract investors to Mexico or to the full potential unless there is a parallel effort to push forward efforts on transparency, rule of law, anti-corruption and security.
Through our bilateral security assistance program, the Merida Initiative, the U.S. government is supporting the Government of Mexico’s efforts to address these crucial issues. Crime and corruption exist everywhere, and our own country faces these challenges. However, there is a need to share best practices in regulation, open government, legal certainty and rule of law, immigration, security and many other areas of governance. The United States is available to partner with Mexico to meet President Peña Nieto’s goals to fight insecurity and corruption. Working together in these areas to promote prosperity and economic growth will make us all more competitive.
I believe that U.S. companies can and do lead the way in ethical and transparent business practices around the global. Mexico has an opportunity and an obligation to ensure that the economic reforms of last year translate into greater growth and prosperity for all Mexicans in the coming years. The participation of the private sector in calling for and working toward a society that upholds the rule of law, brings greater transparency to government functions, and tackles corruption wherever it may be will be critical in achieving that prosperous future. A future that benefits Americans and Mexicans alike and enriches our continent.
Business leaders such as you are the experts in identifying risks and opportunities when it comes to investments and future growth. I look forward to hearing your thoughts and ideas on how we can further North American competitiveness.