MISSION, RGV – A new study on U.S.-Mexico “Bordernomics” states U.S. and Mexico can gain an additional $75.1 billion in annual gross income as well as provide over 790,000 jobs if the two countries enhance integration for additional trade.
The study comes from The Perryman Group.
According to the report, trade between U.S. and Mexico more than doubled since 1999 and increased by 15.7 percent since 2011. In 2016, trade in goods and services between the two countries amounted to over $580 billion. One major contribution for this growth is the North American Free Trade Agreement (NAFTA).
“A number of studies provide compelling evidence that NAFTA has had a significant and positive impact on the economies of Mexico and the United States,” the executive summary states.
However, NAFTA was opened up for renegotiation between the U.S., Canada and Mexico in 2017. The Perryman Report states the potential U.S. withdrawal from the agreement is causing investment and business growth along the border to slow.
An executive summary of the report states:
Trade between the US and Mexico has grown substantially over the past decades, more than doubling since 1999 and increasing by 15.7 percent since 2011.Trade in goods and services between the US and Mexico totaled $586.9 billion in 2016. The bulk of that amount is merchandise trade ($530.2 billion or 90.4 percent), while trade in services equaled $56.6 billion (9.6 percent).
A major reason for this growth is the North American Free Trade Agreement (NAFTA), and a number of studies provide compelling evidence that NAFTA has had a significant and positive impact on the economies of Mexico and the United States. The widely varying characteristics of the two areas give rise to numerous opportunities to further optimize various comparative advantages in production and distribution.
The Perryman Group estimated the current trade potential including net export capacity and net import requirements for each of the US and Mexico border states to illustrate opportunities for additional trade and cooperation.
The Perryman Group’s analysis of trade indicates estimated total export potential from the 10-state area of nearly $2.3 trillion per year.
For the US border states as a whole, the net export potential is more than $1.9 trillion dollars, while for the Mexico border states, the net export potential is almost $365.0 billion.
Congressman Henry Cuellar, D-Laredo, attended a U.S.-Mexico Bordernomics News Conference in Washington D.C. and spoke about the importance of trade with Mexico.
“I have said time and time again that limiting the trade between the United States and Mexico would eliminate American jobs and hurt the economy,” said Cuellar, a member of the U.S. House Appropriations Committee, and Homeland Security and Defense Subcommittees.
“Both countries rely on each other heavily for trade, retail and tourism. That is why it is important that we modernize NAFTA and strengthen Texas’ relationship with Mexico to optimize prosperity.”
The summary states there are a few actions that can help enhance integration and trade such as increased access to higher education and technology, encourage entrepreneurship in Mexico, as well as maintaining the level of economic integration that already exists through supporting NAFTA.
“Increased economic integration involves taking advantage of opportunities and working together to resolve challenges,” The Perryman Group states. “Long term prosperity on both sides of the border depends on working together towards optimal solutions.”
Also present at the news conference were Congressman William Hurd, R-San Antonio, Senior Vice President of IBC Bank Eddie Aldrete, Executive Director of Mexicans & Americans Thinking Together (MATT) Aracley Garcia-Granados, Board Member of the MATT Foundation & Former Texas Secretary of State Hope Andrade, along with trade and border experts.
Cuellar added: “I would like to thank Bordernomics Alliance for assembling this news conference, and I thank Dr. Ray Perryman for releasing his finding to the community. This crucial information will provide necessary, in-depth insight into the positive affects trade has on our country.”
About the Bordernomics Alliance:
The mission of the Bordernomics Alliance is to increase economic prosperity and quality of life for the ten Border States through active public/private collaborations in advocacy, trade, networking and information. The Study depicts the most current trade relations between the US and Mexico. The study included twelve focus groups with leaders from the ten Border States to explore potential areas of improved cooperation, as well as obstacles to these efforts. The findings will serve as a foundation for the Bordernomics Alliance mission, aimed at raising awareness of an economically powerful mega-region that gives us a competitive advantage in the global market.