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Professor Alejandro Diaz Bautista, Conference Presentation, Los Angeles, California June 2013. U.S. Mexico Relations 2013. Economics, Border Security and Collaboration of Both Countries.

Professor Alejandro Diaz Bautista, Conference Presentation, Los Angeles, California June 2013. U.S. Mexico Relations 2013. Economics, Border Security and Collaboration of Both Countries.

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  • League of California Cities Los Angeles County Division April 5, 2007 LAEDC: Jack Kyser
  • League of California Cities Los Angeles County Division April 5, 2007 LAEDC: Jack Kyser
  • League of California Cities Los Angeles County Division April 5, 2007 LAEDC: Jack Kyser

Professor Alejandro Diaz-Bautista Conference Presentation Los Angeles June 2013 Professor Alejandro Diaz-Bautista Conference Presentation Los Angeles June 2013 Presentation Transcript

  • U.S.-Mexico Relations 2013.U.S.-Mexico Relations 2013.Economics, Border Security and Collaboration of BothEconomics, Border Security and Collaboration of BothCountriesCountriesAlejandro Díaz-Bautista,Alejandro Díaz-Bautista, Ph.D.Ph.D.Professor of International Economics at ColefandDistinguished ResearcherNational Council of Science and Technologyadiazbau@gmail.comPresentation for the 15 Annual Mexico Economic Review and PoliticalOutlook 2013“, organized by the US-Mexico Chamber of Commerce,California Regional Chapter, Los Angeles, CA, June 13, 2013.
  • U.S.-Mexico Relations, a ShiftU.S.-Mexico Relations, a Shiftfrom Security to Economyfrom Security to Economy This shift is notable, as issues of security,This shift is notable, as issues of security,law enforcement and combating crimelaw enforcement and combating crimeformed the backbone of U.S.-Mexicanformed the backbone of U.S.-Mexicanrelations during the previous Mexicanrelations during the previous Mexicanadministration.administration. Even before former Mexican PresidentEven before former Mexican PresidentFelipe Calderon took office, it was part ofFelipe Calderon took office, it was part ofthe discussion with the U.S.the discussion with the U.S. The U.S. and Mexican administrationsThe U.S. and Mexican administrationswent on to develop a close and complexwent on to develop a close and complexrelationship on security matters.relationship on security matters.
  • U.S.-Mexico Relations, a ShiftU.S.-Mexico Relations, a Shiftfrom Security to Economyfrom Security to Economy During the administration of Ex PresidentDuring the administration of Ex PresidentCalderon, the headlines about Mexico wereCalderon, the headlines about Mexico wereabout drugs and trafficking, organizedabout drugs and trafficking, organizedcrime and violence.crime and violence. But the new Mexican administration isBut the new Mexican administration istrying to shift the narrative of Mexico bytrying to shift the narrative of Mexico bytalking more about these economic issues:talking more about these economic issues:the reforms that are happening in Mexicothe reforms that are happening in Mexicothat will promote economic growth, andthat will promote economic growth, andnew investments coming into Mexico.new investments coming into Mexico.
  • U.S.-Mexico Relations, a ShiftU.S.-Mexico Relations, a Shiftfrom Security to Economyfrom Security to Economy U.S.-Mexican relations are strategicallyU.S.-Mexican relations are strategicallyimportant to both countries, and Mexicosimportant to both countries, and Mexicosperiod of transition has createdperiod of transition has createdopportunities for each to reshape theopportunities for each to reshape thepartnership. And although U.S. mediapartnership. And although U.S. mediaattention has focused primarily on bilateralattention has focused primarily on bilateralsecurity issues, namely cooperation insecurity issues, namely cooperation inMexicos drug war, the Pena NietoMexicos drug war, the Pena Nietoadministration is working with Washingtonadministration is working with Washingtonto re-orient the cross-border conversationto re-orient the cross-border conversationto one centered primarily on mutualto one centered primarily on mutualeconomic possibility.economic possibility.
  • U.S.-Mexico Relations, a ShiftU.S.-Mexico Relations, a Shiftfrom Security to Economyfrom Security to Economy Labor and education overhauls passedLabor and education overhauls passedthrough the legislative branch relativelythrough the legislative branch relativelyeasily, and banking reforms intended toeasily, and banking reforms intended tobroadly increase access to credit are set tobroadly increase access to credit are set tobe proposed once the legislaturebe proposed once the legislaturereconvenes in September. Thereconvenes in September. Theadministration still has an aggressive to-administration still has an aggressive to-do list remaining, with planned overhaulsdo list remaining, with planned overhaulsranging from the telecommunications andranging from the telecommunications andenergy sectors to issues such as taxation.energy sectors to issues such as taxation.The majority of the reforms has beenThe majority of the reforms has beenstructural in nature and driven bystructural in nature and driven byeconomic issues.economic issues.
  • U.S.-Mexico Relations, a ShiftU.S.-Mexico Relations, a Shiftfrom Security to Economyfrom Security to Economy Domestic political factors will determineDomestic political factors will determinethe success of the pending overhauls. Butthe success of the pending overhauls. Butthe labor reform could improve bilateralthe labor reform could improve bilateralcommerce and investment with the Unitedcommerce and investment with the UnitedStates, as would a successful liberalizationStates, as would a successful liberalizationof the countrys energy sector in theof the countrys energy sector in thecoming years.coming years.
  • U.S.-Mexico Relations, a ShiftU.S.-Mexico Relations, a Shiftfrom Security to Economyfrom Security to Economy Mexico is already the United States third-Mexico is already the United States third-largest trading partner, and economiclargest trading partner, and economiccoordination between the two countriescoordination between the two countrieshas become a routine matter at thehas become a routine matter at theministerial level, but there is still a need toministerial level, but there is still a need toease bureaucratic trade and investmentease bureaucratic trade and investmentbarriers.barriers.
  • U.S.-Mexico Relations, a ShiftU.S.-Mexico Relations, a Shiftfrom Security to Economyfrom Security to Economy Certain details have emerged indicatingCertain details have emerged indicatingthat the Pena Nieto administration intendsthat the Pena Nieto administration intendsto change the nature of intelligenceto change the nature of intelligencecooperation between the United Statescooperation between the United Statesand Mexico. Until now, the two countriesand Mexico. Until now, the two countriesvarious law enforcement and intelligencevarious law enforcement and intelligenceagencies have been able to interactagencies have been able to interactdirectly, but Mexicos interior ministry willdirectly, but Mexicos interior ministry willbegin overseeing all intelligencebegin overseeing all intelligencecollaboration.collaboration.
  • U.S.-Mexico Relations, a ShiftU.S.-Mexico Relations, a Shiftfrom Security to Economyfrom Security to Economy The Mexican Interior Ministry has takenThe Mexican Interior Ministry has takencharge of the federal police, and Penacharge of the federal police, and PenaNieto intends to eventually create aNieto intends to eventually create anational gendarmarie under the interiornational gendarmarie under the interiorsecretariat in order to fill the role in thesecretariat in order to fill the role in thedrug wars currently played by the Mexicandrug wars currently played by the Mexicanmilitary with a security body bettermilitary with a security body betterequipped with law enforcement training.equipped with law enforcement training.
  • U.S.-Mexico Relations, a ShiftU.S.-Mexico Relations, a Shiftfrom Security to Economyfrom Security to Economy The extent and manner to which thisThe extent and manner to which thiscentralization will affect securitycentralization will affect securitycooperation with the United States iscooperation with the United States isunclear.unclear. But the changes are primarily designed toBut the changes are primarily designed togive Mexico greater control over thegive Mexico greater control over theintelligence process involved in combatingintelligence process involved in combatingthe countrys violent gangs. The intentionthe countrys violent gangs. The intentionis not to block U.S. collaboration andis not to block U.S. collaboration andassistance, but rather to reform existingassistance, but rather to reform existingstructures.structures.
  • U.S.-Mexico Relations, a ShiftU.S.-Mexico Relations, a Shiftfrom Security to Economyfrom Security to Economy Economics is at the center of the relationEconomics is at the center of the relationbetween both countries in 2013.between both countries in 2013. The United States is Mexico’s largestThe United States is Mexico’s largesttrading partner, and the two countriestrading partner, and the two countriesengaged in nearly 500 billion dollars worthengaged in nearly 500 billion dollars worthof trade in 2012. Much of that trade is inof trade in 2012. Much of that trade is inwhat are known as intermediate inputs,what are known as intermediate inputs,referring to semi-finished U.S. goods thatreferring to semi-finished U.S. goods thatare finalized with Mexican resources, aare finalized with Mexican resources, aprocess seen as increasing theprocess seen as increasing thecompetitiveness of both countries.competitiveness of both countries.
  • United States - Mexico Border StatesDescription:• 10 border states.• Nearly 2,000-mile (3,169 km or 1,969 miles) of internationalborder.• Population: more than 83 million.
  • The United States- Mexico border regionThe United States- Mexico border region The ten Border States represent the largest binational regional economy inThe ten Border States represent the largest binational regional economy inthe world, with over 83 million people and a combined economy rankedthe world, with over 83 million people and a combined economy rankedestimated at number four in the world in economic terms.estimated at number four in the world in economic terms. This region has 51 border crossings, 32 bridges and seven federal railwayThis region has 51 border crossings, 32 bridges and seven federal railwayroutes, placing it as the busiest border in the world, with over 350 millionroutes, placing it as the busiest border in the world, with over 350 millionpeople cross the border each year.people cross the border each year. The economic slowdown and unemployment are among the issues thatThe economic slowdown and unemployment are among the issues thatcurrently affect the people on both sides of the border.currently affect the people on both sides of the border. The state of Arizona had an unemployment rate of 9.4 percent, Texas, 8.4The state of Arizona had an unemployment rate of 9.4 percent, Texas, 8.4percent; New Mexico, 6.7 percent, and California, 12 percent (thepercent; New Mexico, 6.7 percent, and California, 12 percent (thehighest), according to the figures from July 2011, compared to anhighest), according to the figures from July 2011, compared to anunemployment rate of 9.1 percent in the United States during July 2011.unemployment rate of 9.1 percent in the United States during July 2011. In July 2011, the northern border states of Mexico were also showing highIn July 2011, the northern border states of Mexico were also showing highunemployment rates. The state of Baja California had an unemploymentunemployment rates. The state of Baja California had an unemploymentrate of 5.05 percent, Sonora, 5.65 percent; Chihuahua, 6.81 percent;rate of 5.05 percent, Sonora, 5.65 percent; Chihuahua, 6.81 percent;Coahuila, 6.27 percent; Nuevo Leon, 6.49 percent; and Tamaulipas, 8.81Coahuila, 6.27 percent; Nuevo Leon, 6.49 percent; and Tamaulipas, 8.81percent (the highest).percent (the highest).
  • The United States MexicoThe United States MexicoBorder Unemployment (2012)Border Unemployment (2012) Official figures from the National Institute of Statistics andOfficial figures from the National Institute of Statistics andGeography (INEGI) show that during the second quarter of 2012,Geography (INEGI) show that during the second quarter of 2012,the northern border states in Mexico continue to show highthe northern border states in Mexico continue to show highunemployment rates. Chihuahua had a 7% unemployment rate,unemployment rates. Chihuahua had a 7% unemployment rate,Tamaulipas with 6%; Sonora with 5.4%, Coahuila with 5.5%,Tamaulipas with 6%; Sonora with 5.4%, Coahuila with 5.5%,Nuevo Leon with 6.4% , and Baja California with a 6.1%Nuevo Leon with 6.4% , and Baja California with a 6.1%unemployment rate. On average, the unemployment rate of theunemployment rate. On average, the unemployment rate of thenorthern border states of Mexico is estimated close to 6.06%northern border states of Mexico is estimated close to 6.06%during the second quarter of 2012.during the second quarter of 2012. Furthermore, at the end of July 2012, the southern U.S. borderFurthermore, at the end of July 2012, the southern U.S. borderstates also suffered with high unemployment rates: California withstates also suffered with high unemployment rates: California with10.7%, Arizona with 8.3%, 6.6% for New Mexico, and Texas with10.7%, Arizona with 8.3%, 6.6% for New Mexico, and Texas withan unemployment rate of 7.2 percent. On average, thean unemployment rate of 7.2 percent. On average, theunemployment rate of the southern border states of the Unitedunemployment rate of the southern border states of the UnitedStates is estimated at 6.06% during the month of July 2012.States is estimated at 6.06% during the month of July 2012.
  • Unemployment in CaliforniaUnemployment in California
  • VATVAT Possible increase inPossible increase inthe VAT rate in 2013the VAT rate in 2013in Mexico.in Mexico. Mexico has a VAT ofMexico has a VAT of11% in the border11% in the borderregion and 16% forregion and 16% forthe rest of thethe rest of thecountry.country.VAT/GST rates in OECD member countries2010 2011Australia 2000 10.0 10.0Austria31973 20.0 20.0Belgium 1971 21.0 21.0Canada41991 5.0 5.0Chile 1975 19.0 19.0Czech Republic1993 20.0 20.0Denmark 1967 25.0 25.0Estonia 1991 20.0 20.0Finland 1994 22.0 23.0France51968 19.6 19.6Germany 1968 19.0 19.0Greece61987 19.0 23.0Hungary 1988 25.0 25.0Iceland 1989 25.5 25.5Ireland 1972 21.0 21.0Israel71976 16.0 16.0Italy 1973 20.0 20.0Japan 1989 5.0 5.0Korea 1977 10.0 10.0Luxembourg 1970 15.0 15.0Mexico81980 16.0 16.0Netherlands 1969 19.0 19.0New Zealand 1986 12.5 15.0Norway 1970 25.0 25.0Poland 1993 22.0 23.0Portugal91986 20.0 23Slovak Republic1993 19.0 20.0Slovenia 1999 20.0 20.0Spain101986 16.0 18.0Sweden 1969 25.0 25.0Switzerland 1995 7.6 8.0Turkey 1985 18.0 18United Kingdom1973 17.5 20.0Unweighted average 18.0 18.5
  • The United States MexicoThe United States MexicoBorderBorder People cross the United StatesPeople cross the United StatesMexico border every day to doMexico border every day to dobusiness, go shopping, visit familybusiness, go shopping, visit familymembers, or simply to enjoy eachmembers, or simply to enjoy eachother’s tourism.other’s tourism. This results in around 350 millionThis results in around 350 millioncrossings and almost $400 billion incrossings and almost $400 billion intrade each year, making it the mosttrade each year, making it the mostimportant border region in the world.important border region in the world.
  • Baja California and California Economic IntegrationBaja California and California Economic Integration Economic Integration can also be seen at the regional level.Economic Integration can also be seen at the regional level. During 2010, the official data shows that the number ofDuring 2010, the official data shows that the number ofnorthbound crossers from Baja California to Californianorthbound crossers from Baja California to Californiareached 61,105,484 people, the majority of whom, crossedreached 61,105,484 people, the majority of whom, crossedin personal vehicles. Baja California residents constitute anin personal vehicles. Baja California residents constitute animportant component in the economy of communities andimportant component in the economy of communities andcounties on the U.S. side of the border, like San Diegocounties on the U.S. side of the border, like San DiegoCounty.County. These visitors from Baja California enter the U.S. regularlyThese visitors from Baja California enter the U.S. regularlyfor shopping, tourism, work, and socialization with familyfor shopping, tourism, work, and socialization with familyand friends. It’s a well known fact that cross border visitorsand friends. It’s a well known fact that cross border visitorsfrom Mexico have a significant economic impact on U.S.from Mexico have a significant economic impact on U.S.communities and counties.communities and counties.
  • The Border Economic Zone (BEZ) in Baja California A major challenge for the commercialsector of Baja California is without adoubt, the increase consumer spending ofBaja California residents into the U.S.market, which has been estimated ataround 6 billion dollars a year. With the implementation of the BEZ in2012, Baja California wants to recoverpart of the consumer spending by Bajaresidents in California. The BEZ is intended to promote theconsumption of regionally made goods inthe Baja California region. The economicimpact of the implementation of the BEZcould be as high as an 8% reduction ofspending by Baja California residents inCalifornia.
  • The Border Economic Zone (BEZ)The Border Economic Zone (BEZ) A considerable amount of money is spent onA considerable amount of money is spent ona multitude of retail items includinga multitude of retail items includinggroceries, clothing, appliances, tourism andgroceries, clothing, appliances, tourism andservices.services. As a measure to increase consumer spendingAs a measure to increase consumer spendingin the state of Baja California, thein the state of Baja California, thegovernment and business sectors of Bajagovernment and business sectors of BajaCalifornia in conjunction with the StateCalifornia in conjunction with the StateGovernment and the Federal GovernmentGovernment and the Federal Governmentproposed the new Border Economic Zoneproposed the new Border Economic Zone(BEZ) in 2012.(BEZ) in 2012.
  • “El Buen Fin” Program in Mexico The idea of “El Buen Fin” program in Mexico wascreated as a private initiative to enforce the economicactivity in Mexico during November of 2011. Theinitiative was presented through a program created bythe federal government and some of the mostimportant media networks of Mexico. The program is similar, in some way, to the famous“Black Friday” of the United States, while this dayrepresents the day with highest consumer spending,and when the commercial sector shows their bestoffers and the biggest discounts throughout the year. The economic impact of the implementation of the “ElBuen Fin Program” was estimated as high as a 2%reduction of spending by Baja California residents inCalifornia during 2011.
  • Economic Impacts and Expenditures Shopping is the primary reason to cross into the U.S. forBaja California residents. Depending on the study, 42 to68% of border crossers identify shopping as the primaryreason for the visit into Southern California. Other reasonsare social in nature, like visiting family and friends, or arework related. During 2010, around 74 percent of crossers enteredCalifornia in their private vehicles, since a car allows themfreedom of movement between different shopping locationsin the U.S. as well as enough room to handle the volume oftheir purchases. The estimated average daily expenditures reported by BajaCalifornia visitors into San Diego County and California invarious studies ranges from US $140 per trip to $300 pertrip. The current estimation uses an average amount ofexpenditures per trip of $240 per trip as the base casescenario.
  • Annual Retail Sales in California byBaja California Border Crossers(Economic Growth Scenario)01000000000200000000030000000004000000000500000000060000000007000000000800000000090000000002010 2011 2012 2013 2014yearDollarsLow Spend. CaseHigh Spend. CaseBase Spend. CaseEl Buen Fin ProgramBEZ
  • California Economic Impacts The California and Baja California border region remains anexample of social and economic integration in NorthAmerica, where cross-border shopping is only one aspect ofthat economic reality in the border region. Mexican citizens cross frequently into the U.S. to shop,work, dine, vacation, and visit friends and family. Whatthey spend on those visits results in a key contribution tolocal border economies in California. The results reveal annual retail sales by Baja CaliforniaCross Border Visitors in the range of 5.9 to 6.8 billiondollars along the U.S.-Mexico border, depending on thecomplete implementation of the Border Economic Zone(BEZ) in Baja California and the “El Buen Fin Program”. The base case scenario shows that Baja Californiaconsumer and economic drain into the U.S. market isestimated at around 5.9 billion dollars in 2012 and 6.2billion dollars in 2014, with the implementation of theBorder Economic Zone (BEZ).
  • Surface Trade between U.S. and NAFTASurface Trade between U.S. and NAFTACountries : 1995 – 2011.Countries : 1995 – 2011. Surface transportation trade between the United States andSurface transportation trade between the United States andits North American Free Trade Agreement (NAFTA) partnersits North American Free Trade Agreement (NAFTA) partnersCanada and Mexico increased by 14.3 percent in 2011Canada and Mexico increased by 14.3 percent in 2011compared to 2010, valued at $904 billion in 2011,compared to 2010, valued at $904 billion in 2011,according to official data by the Bureau of Transportationaccording to official data by the Bureau of TransportationStatistics (BTS) of the U.S. Department of Transportation.Statistics (BTS) of the U.S. Department of Transportation. The 14.3 percent increase in trade was the third largestThe 14.3 percent increase in trade was the third largestyear-to-year increase for the years covered by these data.year-to-year increase for the years covered by these data. The $904 billion in U.S.-NAFTA trade was the highestThe $904 billion in U.S.-NAFTA trade was the highestamount since NAFTA went into effect in 1994.amount since NAFTA went into effect in 1994.
  • Commodities Exports Imports TotalElectricalMachinery;Equipment andParts29,672 50,799 80,471Computer-RelatedMachinery andParts29,703 37,864 67,567Vehicles Otherthan Railway17,726 43,446 61,172Plastics 12,570 3,369 15,939Measuring andTestingEquipment4,083 9,348 13,431Top Five Commodities Transported between theTop Five Commodities Transported between theU.S. and Mexico by All Surface Modes ofU.S. and Mexico by All Surface Modes ofTransportation, 2011. (In millions).Transportation, 2011. (In millions).
  • Top 10 States Exporting toTop 10 States Exporting toMexico, 2009 to 2011.Mexico, 2009 to 2011.
  • U.S. Mexico Trade in 2012U.S. Mexico Trade in 2012 Total bilateral trade between the U.S. and Mexico has returned toTotal bilateral trade between the U.S. and Mexico has returned tothe levels before the economic downturn and crisis.the levels before the economic downturn and crisis. In 2011, Mexico and the United States had almost 461 billion dollarsIn 2011, Mexico and the United States had almost 461 billion dollarsin trade in goods, which represents more than 1,250 million dollarsin trade in goods, which represents more than 1,250 million dollarsor 1.25 billion in trade crossing the border in both directions everyor 1.25 billion in trade crossing the border in both directions everyday.day. The economic relationship also adds 39 billion dollars in serviceThe economic relationship also adds 39 billion dollars in servicetrade.trade. Mexico continues to export more of their products and services toMexico continues to export more of their products and services tothe United States than any other country in the world. The Unitedthe United States than any other country in the world. The UnitedStates remains the main destination of Mexican goods and services.States remains the main destination of Mexican goods and services. The trade relationship between Mexico and the United States notThe trade relationship between Mexico and the United States notonly is back but it is getting stronger between Mexico and theonly is back but it is getting stronger between Mexico and theUnited States in 2012.United States in 2012.
  • Migration and border issuesMigration and border issues
  • Migration and border issuesMigration and border issues Mexico has seen a significant drop inMexico has seen a significant drop inmigration recently. For the first time in 60migration recently. For the first time in 60years the movement of Mexicans to theyears the movement of Mexicans to theUnited States is at a net zero.United States is at a net zero. A mixture of tougher anti-immigrationA mixture of tougher anti-immigrationlegislation in the southern United States,legislation in the southern United States,combined with fewer job prospects in thecombined with fewer job prospects in theUS may have forced many Mexicans toUS may have forced many Mexicans tocome back home.come back home.
  • Migration and border issuesMigration and border issues The net zero migration rate between Mexico and the UnitedThe net zero migration rate between Mexico and the UnitedStates does not mean that Mexican migrants have notStates does not mean that Mexican migrants have notcrossed to the United States between 2011 and 2012.crossed to the United States between 2011 and 2012. The decrease in net Mexican migration is the differenceThe decrease in net Mexican migration is the differencebetween those who go to the United States and those whobetween those who go to the United States and those wholeave the country and go back to Mexico, a socialleave the country and go back to Mexico, a socialphenomenon that began five years ago and already has ledphenomenon that began five years ago and already has ledto the first decline in two decades of the undocumentedto the first decline in two decades of the undocumentedMexican population in the United States.Mexican population in the United States.
  • Migration at Net ZeroMigration at Net Zero
  • Migration and border issuesMigration and border issues The reduction of Mexican migration to theThe reduction of Mexican migration to theUnited States is a social phenomenon thatUnited States is a social phenomenon thatis explained by the slow evolution of theis explained by the slow evolution of theU.S. economy during the worst economicU.S. economy during the worst economiccrisis in decades, the labor marketcrisis in decades, the labor marketsituation in the United States, thesituation in the United States, thedeportations of migrants and the increasedeportations of migrants and the increasein border enforcement and security. Alsoin border enforcement and security. Alsothe growing dangers associated with illegalthe growing dangers associated with illegalborder crossings, the long-term decline inborder crossings, the long-term decline inMexico’s birth rates and broader economicMexico’s birth rates and broader economicconditions in Mexico.conditions in Mexico.
  • Economic Contribution ofEconomic Contribution ofMexicans to the U.S. EconomyMexicans to the U.S. Economy
  • RemittancesRemittances The increase in remittances were oneThe increase in remittances were oneof the key factors of macroeconomicof the key factors of macroeconomicstability in Mexico, before thestability in Mexico, before theeconomic crisis of 2008 and 2009.economic crisis of 2008 and 2009.
  • RemittancesRemittances Remittances come almost entirely from the U.S.,Remittances come almost entirely from the U.S.,and remain one of the most important sources ofand remain one of the most important sources offoreign income in Mexico.foreign income in Mexico. Flows to the Mexican economy come from threeFlows to the Mexican economy come from threemain areas: oil, tourism and remittances frommain areas: oil, tourism and remittances fromMexican nationals living abroad.Mexican nationals living abroad. During 2011, Mexico managed to stay as theDuring 2011, Mexico managed to stay as thethird recipient of remittances in the world afterthird recipient of remittances in the world afterIndia and China.India and China.
  • Gas Prices in Mexico and the United States
  • Mexico’s Energy and theEconomy in 2012 Moreover, a decline incrude production due tounder investment by theMexican state oil firmPetroleos Mexicanos(Pemex) and a weaknon-oil tax base areexpected to draw fundsaway from publicinvestment.
  • New oil fields in the Gulf ofNew oil fields in the Gulf ofMexicoMexico The discovery of a newoil field in the Gulf ofMexico during 2012,may lead to an increasein crude production inMexico in the mediumand long term.
  • International ReservesInternational Reserves
  • International ReservesInternational Reserves Mexico’s international reserves rose to 161.2 billion in theMexico’s international reserves rose to 161.2 billion in theweek that ended August 24, 2012, according to official dataweek that ended August 24, 2012, according to official databy the central bank.by the central bank. Mexico’s International Reserves are at historic levels inMexico’s International Reserves are at historic levels in2012.2012. Mexico’s reserves have climbed 13 percent this year, givingMexico’s reserves have climbed 13 percent this year, givingthe central bank greater leeway to intervene in the foreignthe central bank greater leeway to intervene in the foreignexchange markets to buy pesos when needed.exchange markets to buy pesos when needed.
  • International ReservesInternational Reserves On June 1, the mexican peso reached its weakestOn June 1, the mexican peso reached its weakestlevel against the dollar since March 2009 onlevel against the dollar since March 2009 onconcerns that Europe’s sovereign debt crisisconcerns that Europe’s sovereign debt crisiswould affect global economic growth.would affect global economic growth. Mexico uses dollar auctions to limit daily declinesMexico uses dollar auctions to limit daily declinesin the peso after it tumbled 11 percent againstin the peso after it tumbled 11 percent againstthe dollar in 2011, the most among major Latinthe dollar in 2011, the most among major LatinAmerican currencies.American currencies. Since November 2011, the central bank has beenSince November 2011, the central bank has beenoffering $400 million daily at an exchange rateoffering $400 million daily at an exchange ratethat’s at least 2 percent weaker than the previousthat’s at least 2 percent weaker than the previousday.day. This year, the peso has strengthened 5.7 percentThis year, the peso has strengthened 5.7 percentagainst the dollar.against the dollar.
  • Dollar vs. PesoDollar vs. Peso
  • Global Market Volatility Unfortunately, all of the world’seconomies, including the emergingmarkets, will be affected to a greateror lesser degree by the events ineurope, and therefore the challengeis to mitigate the degree of economicand financial impact.
  • Opportunities in Emerging Markets
  • Opportunities in Emerging Markets
  • U.S.-Mexico Relations, a ShiftU.S.-Mexico Relations, a Shiftfrom Security to Economyfrom Security to Economy Demographic changes in the United StatesDemographic changes in the United Statesare driving a debate about immigrationare driving a debate about immigrationreform in 2013 that, if implemented,reform in 2013 that, if implemented,would require collaboration with Mexico,would require collaboration with Mexico,many of whose citizens would seek tomany of whose citizens would seek tolegalize their residential status in thelegalize their residential status in theUnited States.United States.
  • U.S.-Mexico Relations, a ShiftU.S.-Mexico Relations, a Shiftfrom Security to Economyfrom Security to Economy The U.S. political decision-making processThe U.S. political decision-making processis largely isolated from internationalis largely isolated from internationalinfluence, and the Pena Nietoinfluence, and the Pena Nietoadministration likewise appears to beadministration likewise appears to beconsolidating key policy areas underconsolidating key policy areas underMexican control at the expense of U.S.Mexican control at the expense of U.S.influence. Still, Mexicos steady emergenceinfluence. Still, Mexicos steady emergenceas an economic power in North Americaas an economic power in North Americasets the stage for a bilateral relationshipsets the stage for a bilateral relationshipmuch more heavily focused onmuch more heavily focused onopportunities for economic cooperation.opportunities for economic cooperation.
  • U.S.-Mexico Relations 2013.U.S.-Mexico Relations 2013.Economics, Border Security and Collaboration of BothEconomics, Border Security and Collaboration of BothCountriesCountriesAlejandro Díaz-Bautista,Alejandro Díaz-Bautista, Ph.D.Ph.D.Professor of International Economics at ColefandDistinguished ResearcherNational Council of Science and Technologyadiazbau@gmail.comPresentation for the 15 Annual Mexico Economic Review and PoliticalOutlook 2013“, organized by the US-Mexico Chamber of Commerce,California Regional Chapter, Los Angeles, CA, June 13, 2013.