Mexico, U.S. Share Much More Than a Fence

The brief summit between Mexico, Canada, and the United States that concluded in Guadalajara yesterday marks the second time that Barack Obama has visited our southern neighbor since he began his presidency.

Both times he came to Mexico to address urgent issues such as the H1N1 influenza strain, the drug cartel crisis, immigration, and trade.

But in many ways Obama is merely starting where George W. Bush left off. Bush visited Mexico six times during his presidency and hosted Vincente Fox at his ranch twice. Only two other countries (Italy and Russia) played host to Bush as many times.

Commercial and Social Ties. The frequent diplomatic activity signals a trend of growing commercial and social ties between the countries.

Once regarded by the U.S. as a “Distant Neighbor,” Mexico now hosts many U.S. businesses and has a substantial portion of its population living within the U.S. It’s ironic that this state exists during a time when the U.S. is constructing a wall between the two countries.

Below are some examples of the growing ties between the U.S. and Mexico:

• Mexico is the United States’ third largest trading partner (after China and Canada);
• Mexico became the United States’ second largest agricultural trading partner in 2006
• About 82 percent of Mexico’s exports go to the United States and 50 percent of Mexico’s imports come from the United States.
• About 65 percent of 45 million Hispanics living in the U.S. are of Mexican background.
• Between 500,000 and 1 million Americans live in Mexico.
• Wal-Mart, is the largest private sector employer in Mexico, with nearly 150,000 Mexicans on its payroll.
• The AT&T Viva Mexico plan (starting at $55 per month) eliminates long-distance charges on wireless calls between the United States and Mexico.
• UPS has added “standard” ground delivery for packages going to the United States from Mexico.

U.S. manufacturers’ reaction to the global recession will likely make the alliance between the U.S. and Mexico even stronger.  Businessweek reported in April that many U.S. manufacturers are opting for “near-shore” operations with Mexico, rather than continuing to do business in China. Among the reasons are that:

Rising Chinese costs and fears of higher trans-Pacific shipping prices if oil spikes again are part of it. With capital scarce and markets hard to forecast, companies don’t want to tie up cash in inventory as they wait for their cargo to arrive…Other big factors are China’s rampant piracy, quality failures, and communication problems. In Mexico, U.S. companies can better control their operations than in China, where they often must work with government-linked partners.

Photo by eralon (Via Creative Commons)