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HomeMy WebLinkAbout04.0- Presentations ��,IDOo •s.�:-_+`,tip\ jlj�•'J SRE CONSULADO DE CARRERA DE MEXICO EN SAN BERNARDINO e US - MEXICO BILATERAL RELATIONSHIP Facts and relevant data q�4 June, 2016 MOVING MEXICO FORWARD FACTS,FIGURES AND STRUCTURAL REFORMS MEXICO AND THE WORLD • Mexico is the bridge between Latin and North America. Trade • Mexico is the 15th largest economy in the world (1.3 trillion dollar economy)and the G20's 51h most open economy: 0 11 Free Trade Agreements and 31 Reciprocal Protection of Investments Agreements. o Preferential access to a market of 1.2 billion people in 46 countries. That means any company that manufactures in Mexico has duty-free access to 60%of the world's GDP. 0 In the process of expanding trade with Asia through TPP and reach an additional market of 155 million people. 0 63%of Mexico's GDP can be attributed to trade. • In 2015, Mexico was the 12th largest exporter in the world and it accounted for 35% of Latin America's total trade. • Mexico's exports have changed dramatically over the past 30 years: • In the 80's, 70%of exports were oil-related,whereas today 80% are manufactured products. • Mexico manufactures and exports the same amount of goods as the rest of Latin America combined_ o Mexico is the 711 largest auto manufacturer in the world,with a production of more than 3 million cars in 2015,and the 4th largest auto exporter. • Mexico is the 6th aerospace supplier to the US with 270 aerospace companies. • Mexico is the 3rd IT services supplier globally, after India and the Philippines. This sector has a market value of 14.4 billion dollars. • Mexican exports of electronics more than tripled to$80 billion from 2006 to 2015,turning Mexico into the leading producer for the electronics industry in Latin America. Investment • Mexico is the 13th largest recipient of foreign direct investment. • Mexican investment in the US equals$17.6 billion,and has grown by over 35 percent the past five years. • It is larger than the investments of Spain, Italy and South Korea in the US and it represents the 711 fastest growing investor country in the United States. • Mexico's Cemex,for example,is North America's largest maker of cement and concrete products. • Saks Fifth Avenue and the New York Times Company are supported by significant Mexican investment_ o Mexican corporations, such as CEMEX, Gruma, Grupo Alfa, Grupo Mexico and Lala employ more than 81 thousand people in the US. Other relevant facts • It is the 1311 largest and 111h most populated country in the world with 125 million people,and the majority of them are young.Mexico's GDP per capita(PPP)in 2015 was 16,500 USD. • Mexico is the 151h largest contributor to the UN budget: o It pays more than 22 European Union countries combined. • Mexico is the 41h richest country in biodiversity: • It concentrates around 12%of all living species in the world. • It is the 6th country with the most UNESCO World Heritage Sites. • Mexico is the 91 most visited country in the world, 1st in Latin America and 2nd in the Americas, only after the US.Last year, 30 million tourists visited Mexico. MOVING MExico FORWARD -FGACTS, FLG 1RES AND STRUCTURAL Q'EFDRMS v ENIC0°S STRUCTURAJ, REFOAAAS • Mexico has had 3 years of a visionary leadership, as President Enrique Pena Nieto launched an ambitious agenda of 11 reforms,including Energy,Education,Telecom,in the Financial Sector and the Judiciary. o Their objective is to promote competitiveness and growth, inclusive development, and to bolster democratic institutions to expand citizens'rights. • The reforms were crafted to make it more attractive to invest and do business in Mexico, with the end- goal of increasing the wellbeing of Mexicans now and for the generations to come. • The reforms are currently in their implementation phase,but they have already yielded tangible results: • Tax reform strengthened tax revenues and has reduced the country's dependence on oil revenue. • Today,less than 20%of the total income derives from oil revenues,compared to 39.2%in 2012. • In 2014,tax collection was the highest recorded in Mexico's history with a total contribution of 136 billion dollars to GDP(10.5%of GDP). • Today,obtaining a credit is easier in Mexico due to the Financial Reform(Doing Business Report,WB). • In 2015, Mexico moved up 4 positions in the World Economic Forum's Global Competitiveness Index. 0 17 positions up in the financial market development criteria. 0 6 in the infrastructure and technologic preparation criteria. 0 4 positions in the goods market efficiency criteria. • The Financial Reform has not only increased credit and decreased its costs for corporations, it has also expanded its availability and at a cheaper cost for small and medium-sized enterprises. • The interest rate for corporations decreased by 0.9%. • Funding granted to the private sector increased by 5.5 percentage points of GDP. • Doing business in Mexico just keeps getting easier. An investor requires only 6 days and 6 procedures to start a business.It can take up to 33 days in China and 107 in Brazil. • The Telecom Reform has reduced telephone fees and driven investment in the sector. 0 40.7% in tariffs applied to international long distance, 18.2% in the mobile phone sector;4.2% in fixed telephone services. o Over 65,000 public places will provide free internet access. • As a result of the Energy Reform,the cost of energy has decreased and investment has increased. 0 For the first time in recent history,the prices of gas and diesel dropped by 3%. o Investments of 6.9 billion dollars raised during the first 3 bids. 0 5,159 km expansion of new gas pipelines o Better use of natural gas will help enhance air quality. It generates between 25% and 30% less carbon dioxide than diesel. o Electric tariffs show a decrease between 18%and 25%_ o In 2015,the price of households electricity decreased by 7%. o The Mexican Government invested 244 million dollars to modernize electric circuits,underground networks and electrics power plants between 2010 and 2014. o The Federal Electricity Commission's "Round Zero" is an alternative for renewable energy: solar, wind,biomass and hydroelectric power. • More than 3.4 million students have benefited from the Education Reform. The Mexican Government added three more hours of daily learning time in 23,182 full-time schools, intended to boost student achievement and make these schools more competitive on a global level. • Mexico is building a professional teaching core,based exclusively on merit,and a national teaching admission test that will guarantee that only the brightest students become teachers. Once admitted,teachers undergo periodic evaluations,as a way to promote only the best professionals. • The reform emphasizes the need to link education and research to the productive sector.Students must learn the skills needed to succeed in today's workforce. MEXICO—US BILATERAL RELATIONSHIP CRUCIAL TO US PROSPERITY NORTH AMERICA:THE MOST DYNAMIC AND COMPETITIVE REGION • North America is a region of opportunities for its member countries and for its regional and international partners. • The North America Free Trade Agreement (NAFTA) led to an exponential increase in regional bilateral commerce and investment. • From 1993 to 2015,interregional commerce increased by 258%. • Goods that on any given day cross the border within the region are worth 3.3 billion dollars (US Census, 2014). • Mexico-US bilateral commerce grew by 547%since NAFTA took effect(Secretaria de Economia, 2015,with data from USDOC). • Mexico-US bilateral commerce was $531 billion in 2015 (US Census, 2015). • Mexico and the United States trade more than $1.4 billion per day and more than $1 million per minute. • Mexico is the third trading partner of the United States, participating with 14.2%, only after China(16%)and Canada(15.4%). • Mexico's total trade with the US and Canada is almost twice as large as trade between the US and the European Union. o US trade with Mexico and Canada reached 1.1 trillion dollars in 201S, compared with US trade with the EU,which reached 6.9 billion dollars. MEXICO IS CRUCIAL TO THE US ECONOMY • Mexico is the second destination for US exports, with 15.7% of the total amount, only after Canada (18.6%). • Mexico is the third US supplier,with 13.1%of imports,only after China(21.5%)and (Canada 13.2%) (US Census, 2015). • US exports to Mexico are larger than US exports to China and Japan combined. • Mexico buys to the US: 0 3.5 times the amount of US exports to Brazil, Russia, India, and South Africa combined ($65.7 billion in 2015). 0 1.5 times the amount of US exports to the rest of Latin America ($153 billion in 2015), 3.8 times the amount of US exports to Japan, 4.7 times the amount of US exports to Germany, and 5.4 times the amount of US exports to South Korea. 0 1.2 times the amount of US exports to France, Germany, Japan, and the United Kingdom combined ($198.8 billion in 2015). EXPORTS TO MEXICO CREATE AND SUSTAIN US JOBS The US government estimates that over 6,000 jobs are created for every additional billion spent in exports. • 6 million US jobs depend on trade with Mexico(NAFTA Works and Trade Partnership Worldwide, 2012): • California:692,240 • Texas:463,132 • New York: 381,238 • Illinois: 252,931 • Pennsylvania: 246,409 • Ohio: 224,486 US STATES BENEFIT FROM EXPORTING TO MEXICO • Mexico is the first,second or third trading partner for 30 of the 50 US states(US Census Bureau,2015). ME) co-US BILATERAL RELATIONSHIP (0%UCIIAL TO MS PROShPER[ITY • Mexico was the main destination of Arizona's exports in 2015 (39.7% of total state exports), New Mexico (38.49%)and Texas(35.41%). • Mexico is the second trade partner of Michigan (31.03% of total state exports), California(12.53%) and Nebraska(14.53%). MEXICO AND THE UNITED STATES COMPETE TOGETHER IN THE GLOBAL ECONOMY • North America's integration goes beyond commerce;we produce and innovate together. • The US content of Mexican exports to the US is almost 40%(Nat.Bureau of Economic Research, 2010). o While exports from Canada have a US content equal to 25%, from China 4%, from Brazil 3%, from the European Union 2%,and from Japan 2% (Koopman, Robert,William Powers,Zhi Wang y Shang Jin Wei. Give Credit Where Credit is Due; Tracing Value Added in Global Production Chains. National Bureau of Economic Research Working Paper 16426,Cambridge,MA, 2011). • Auto-parts cross North America's borders 8 times before becoming a final vehicle(ProMexico, 2015). THE US—M co BORDER:A SPACE OF PROSPERITY AND SECURITY • The border between Mexico and the US is a space of prosperity and security. Both countries recognize the importance of cross-border communities. • The US-Mexico border consists of ten states from both countries. The border population is comprised of 14-15 million people that call the border home (Institute Nacional de Estadistica y Geogra fia, INEGI, 2010). • There are 58 border entry ports. Every day, more than one million people and 370,000 vehicles cross this border legally and in an orderly manner(Secretarta de Comunicaciones y Transportes, 2014)_ • 70%of the US-Mexico bilateral commerce gets carried out by land. • The US-Mexico border infrastructure makes our geographic proximity our main comparative advantage. WVESTING IN MEXICO IS INVESTING ON NORTH AMERICA'S PROGRESS • The Mexican economy is open for business. • 15th largest economy in the world and 13th most open economy. • Mexico has a network of 11 free trade agreements with 46 countries and a market of 1.2 billion consumers.These figures do not take the TPP in account yet. • In order to launch a business in Mexico, an investor requires only 6 days and the completion of 6 procedures. In comparison, launching a business in China takes 33 days and in Brazil 107 (Ease of Doing Business, 2016). • The United States is the country with the largest foreign direct investment in Mexico. • From January 1999 to September 2015, the combined US foreign direct investment in Mexico totaled $192.8 billion. • This amount represents 46.3%of foreign direct investment in the country during that period. • Until September 2015, there were 27,145 businesses with US investment (43% of the total number of businesses with foreign direct investment in the country) (ProMexico, 2015). • Mexico invests in the US as well. • Mexican foreign direct investment to the US increased to 17 billion from 1999-2014 (U.S. Bureau of Economic Analysis). • A large number of Mexican companies have a strong presence in the US. • CEMEX, CCC, CH Industries, Gruma, Grupo ALFA, Grupo Financiero Banorte, Grupo Mexico, LaLa,Mexichem employ more than 81,000 people in the US. MEXICO-US BILATERAL RELATIONSHIP CRUCIAL TO US PROSPERITY 6 million US jobs depend on trade with Mexico lobs that rely on bade Wth Maxko: r L • CA: 692,240 , • TX: 463,132 • `t: 381,238 C? u • IL: 252,931 -� a4' • PA. 246,409 riA T • OH: 224,466 • = " a t;oii�SQ. Ho)(c in On.s1:1y as E:COf4 ri'fl Gt r76Y.fl} died.?K$,P3il'a . TOGETHER,THESE ��Mti� ��' CEMEX USA MEXICAN COMPANIES s�So° �P CH Industries EMPLOY MORE THA1i BUBO '�� .. ...... ..... Gruma �N p PEOPLE INTHE U.S. „4 _........ • Grupo ALFA ' ` ""°"°"" ON Grupo Financiero MD Banorte i ® WY .._:........ ' a s a 41 Grupo Mexico LaLa A. • ! a •• -._..__ .._-._ A Mexichem 2t t - @t CO ._.. . KS . a TN *r�.(: (1 dot=7 location) CA - -.._...._. - NC U s A S At s� f $�% �4q l�r. Sys !y Cr aces fit! ©Q® a C,� �3 � ® filY ll 1 V� Y ®,! C,J © i Gruma has opera.ed plants in the Operating i,,the U.S.since 1994,CEMEX has Grupo ALFA consists of a number of companies V.S.since 1977.Its 29 plants across a cement production capacity of 17.1 million operating in the U.S.,including Mock,the leading C the U.S.include the largest producer metric tons per year,distributed across producer of polyester in North America;Sigma. of r.ixtamal,the world's largest IS plants.Its capacity in the U.S.also Includes Alimentos,the largest producer of hot dogs in r-o:hto�n:.ron o�Mor�,v�x��:n -- "-'' tortilla manufacturing o 4 4 --- - —- y plant,and° 31and and marine distribution centers. Che U.Sa and Wemak,the argent producer o con,narnes netni„v qro+,the -- solar panel-powered,onvironmontally CEMEX USA was an EPA Energy Star Partner high-tech aluminum engine components for the U.S.«o rny. fncndly tortilla facility. in 2009 and 2010. automotive Industry in the world. VISIT usra=xteoadstNESS.coet MEXICANS IN THE UNITED STATES: THE IMPORTANCE OF THEIR CONTRIBUTIONS THE MEXICAN—ORIGIN POPULATION IS A DRIVING FORCE FOR THE ECONOMY AND SOCIETY • There are 353 million people of Mexican origin in the United States, who constitute 11% of the total population and 63%of the Hispanic population(US Census, 2014). o Among those, 11.7 million people are Mexican-born, constituting 28% of the migrant population. Half of these, close to 6 million people, are undocumented immigrants and 26.5% hold American citizenships(US Census, 2014). • The majority of Mexican immigrants live in California (37%, 4.3 million) and Texas (21%, 2.5 million), the two largest state economies in the country. • The cities with the largest Mexican immigrant populations are Los Angeles (15%, 1.7 million),Chicago (6%, 677,000), and Houston (5%, 600,000). These cities economies have grown above the national average in the past five years(Migration Policy Institute and US Census) • Mexicans in the United States, including first and second generation, contribute with 8% of the United States GDP(Fundaci6n BBVA Bancomer, 2015). • Approximately 8 million jobs in the United States are directly dependent on the economic activities carried out by undocumented immigrants. MEXICAN IMMIGRANTS ARE ENTREPRENEURS WHO CREATE JOBS IN THE UNITED STATES • 40% of Fortune 500 companies were founded by first and second generation immigrants.These companies create 10 million US jobs. • 28% of the businesses created in 2014 are owned by immigrants and employ 10% of the US workforce (Partnership for a New American Economy, PNAE). • Despite constituting 11% of the population, people of Mexican origin represent 16% of the US workforce, and 18%of them are small business owners. • Around 570,000 companies in the United States, more than 1 for every 25, are owned by Mexican immigrants and generate$17 billion annually. o Migrant women are more likely to own a business than women born in the United States, 9% compared to 6.5%respectively(Center for American Progress). THE HISPANIC MARKET IS CRUCIAL TO US PROSPERITY • Hispanics represent the largest minority market, in a country in which household consumption generates 70%of GDP. • In 2015, Hispanics'purchasing power surpassed $1.5 trillion dollars,close to 11%of the purchasing power in the United States(Selig Center,Georgia University). • Mexican immigrants send to Mexico less than 14% of their monthly income in remittances. The average monthly salary of a Mexican worker in the United States is made up of $2.190 dollars and the average monthly remittance consists of$317 dollars.Therefore, more than 87% of the income of Mexican workers is spent toward the United States' economy(Centro de Estudios Monetarios Latinoamericanos y Banxico). IMMIGRANTS PAY TAXES AND MAKE SOCIAL SECURITY CONTRIBUTIONS IN THE UNITED STATES • 70%of immigrants arrive to the United States during their working age. • This means that the American system does not spend resources on their education. • However, immigrants integrate to the workforce in the United States and will contribute with more than 500 billion dollars to the social security system during the next two decades. Through tax payment and social security contributions,immigrants provide more to state governments than the amount they use through social services. • The balance of the public services used by immigrants and the amount they pay in taxes is positive for the U.S.government. • Immigrants earn approximately $240 billion yearly and pay $90 billion in taxes a year.Additionally, they only use $5 billion in public services. • Since 2000, the United States Social Security Administration has received $90 billion annually due to discounts in the salaries of migrant workers who use social security numbers that do not coincide with official registries.MEDICARE has received $21 billion annually. • Immigrants pay in annual taxes around $1,800 dollars more than the amount they receive in public benefits (Council of the Americas, 2015). • In 2015, families headed by undocumented immigrants paid $11.64 billion to state and local taxes (8% of their incomes) of which $1.2 billion were paid toward rent taxes, $1.6 billion toward property taxes, and $8.4 billion toward consumption taxes (Institute of Taxation and Economic Policy, 2016). IMMIGRANT CIVIC PARTICIPATION IS 9NCREAS[ING EVERY DAY • 800 thousand young US-born Hispanics come to their voting age every year. By 2030, the number of Hispanic voters will total 40 million. • 12.2 million Hispanics voted in the last presidential election. This represents 10% of the electorate. Half of this new group of voters is of Mexican origin. • Increasingly more Hispanics hold popular election posts in the United States.The number of elected officials of Hispanic origin reached the record figure of 6 thousand from 2011 through 2013. (COMPARED To AMERICANS, IMMIGRANTS ARE LESS PRONE To COMMIT CRIMES • In comparison to native-born Americans,immigrants are less likely to commit crimes. • Despite that the undocumented population increased from 1990 to 2013, the rate of violent crimes decreased by 48%during those years. • The imprisonment rate among the immigrant population equals 297 per 100 thousand inhabitants. In comparison, the imprisonment rate among the native-born American population equals 813 per 100 thousand inhabitants(Public Policy Institute,California). THE IMPACT of THE APPROVAL AND [IMPLEMENTATION OF LAW S1B10770 IN AROZONA • The approval and implementation of Law SB1070 passed in 2010 in Arizona brought the state negative economic and fiscal consequences. • A large number of national and international groups cancelled their events in Arizona, which led to negative consequences for the state's tourist and convention sectors.This resulted in the following losses: o $141 million toward the sector of conventions, $253 million toward economic activity in the tourist sector, $9.4 million toward tax collection,and 2,761 job losses,only in 2011. • Additionally,the law brought negative consequences resulting from the population loss. • A year after the law came into force, 110 thousand Hispanics left Arizona and moved to neighbor states or returned to their countries of origin. o This led to the shrinking of the state's available labor force, lower tax revenues, a drop in the value of the property,less consumption,and fewer customers for business and government services.