Guajardo: NAFTA created prosperity for Texas and Mexico
Ildefonso Guajardo
Twenty years ago this coming January, the North American Free Trade Agreement went into effect. It was a landmark agreement, initialized at the conclusion of negotiations in 1992 by the leaders of Canada, Mexico and the United States in San Antonio, which was selected to host the ceremony because of its historic, symbolic and geographic importance for the region.
A lot happened over the two ensuing decades.
Trade between the member countries tripled and now totals more than $1 trillion annually. Today, nearly all trade between the three countries is conducted duty and barrier free. The agreement has fostered an integrated North American manufacturing supply chain in which goods are exchanged at different stages of production and move fluidly across national borders before ending up as finished goods.
In fact, more than a million dollars in trade crosses the U.S.-Mexico border every minute of every day, supporting some 6 million jobs in the U.S. alone. Mexican exports have increased sevenfold since NAFTA took effect and foreign direct investment in our country has increased from an annual average of $2.5 billion in the pre-NAFTA era, to an average of $20 billion since the NAFTA came into effect. And our economies are more integrated than ever. A study by the National Bureau of Economic Research revealed that, on average, there is 40 percent U.S. content in Mexican exports to the United States.
Export-related jobs have contributed to the growth of Mexico's middle class, which now incorporates roughly 60 million people. Like their U.S. counterparts, middle class Mexicans care deeply about economic opportunity, education, efficient and effective government, and security.
Mexico's record of progress under NAFTA has been remarkable, spanning achievements on the economic, political, institutional and international fronts. Despite immense challenges and pressures from domestic as well as foreign sources and events, including the global financial crisis in 2009, Mexico has remained steadfast in its commitment to free trade. Evidence of this commitment is our large network of free trade agreements: 10, which provide preferential access to 45 countries.
The administration of Enrique Peña Nieto is working to ensure that Mexico continues making progress on all of these fronts. There is much still to do, which is why we have undertaken far-reaching reforms that will make our economy more competitive, create new jobs and attract more investments. And we are addressing structural problems that for too long have held back our economy and our people, including taxes, energy, education, telecommunications, anti-trust law, and labor markets.
As we continue moving along the path of reform, we look to deepen integration with our North American partners. Texas will be an integral part of this process, given the strong economic and cultural ties the state shares with Mexico.
The bilateral economic bond between our nation and Texas is robust. Mexico is Texas' most important export market. Last year, the state's exports to Mexico topped $94 billion and included products from a range of industries, such as computer and electronic equipment, petroleum products, transportation equipment, beef and poultry. More than 463,000 jobs in Texas — many in small and medium-sized firms — depend on trade with Mexico, according to recent estimates.
Tourism is also a vital aspect of the Texas-Mexico economic relationship. Approximately six million Mexican tourists visit the Lone Star State each year, making Mexico the single largest source of travel to Texas. These visitors spend some $2.7 billion annually at tourist destinations, hotels, restaurants, and shopping venues throughout the state: from the border to the Hill Country and beyond.
As we work in Mexico to build an economy for the 21st century and to prepare our young population for success in a fast-changing world, we seek to preserve and deepen the unique and mutually beneficial partnership we share with Texas. We must continue to build on the strong foundation for growth we've established under NAFTA and work together to create an ever brighter future for our region.