Every state in the union is going through rough times, as federal funding dwindles and jobs are scarce. A state’s role in international trade, especially with Canada and Mexico, can increase much needed economic growth in these times.
UNM’s Latin American and Iberian Institute presented “Strengthening Our Border Economy: Promising New Developments in U.S.-Mexico Trade” to discuss New Mexico’s trading potential as well as the barriers to increasing trade with Mexico.
The symposium surveyed the North American Free Trade Agreement and its implications for New Mexico.
“The first six years of NAFTA, there were only two U.S. states whose trade with Mexico decreased, West Virginia and New Mexico,” said Jerry Pacheco, executive director, International Business Accelerator. “We rank about 35th in terms of exports to Mexico.”
New Mexico trades very little with Mexico compared with trading giants like California, Texas, Arizona, Mississippi and Delaware, despite the shared border.
“Our exports and our trade with Mexico are quite marginal, but this is a blank state for opportunities for development,” said Juan Massey, director, New Mexico Economic Development Department Office of Mexican Affairs.
Massey and Pacheco explained a plan to develop the New Mexico-Mexico border by building road and rail networks and further developing Santa Teresa, one of three New Mexican ports of entry, which would directly connect New Mexico with Mexico’s maquiladora capital, Juarez.
“The maquila industry is the economic development stream for New Mexico,” Pacheco said. “There are about 420 maquilas. Almost all of the Fortune 500 companies have a presence in northern Mexico.”
The Mexican maquiladora, or maquila, industry is factory-based manufacturing importing materials and equipment duty-free for assembly and then re-exporting assembled products to the country of origin. The industry, which began in the 1960s, expanded after NAFTA and continues to grow.
Pacheco said that companies like Electrolux and Foxconn, a Taiwanese industrial giant, have already invested millions to create their maquiladora base and will need a capable port of entry and a dependable transportation network at the United States border to facilitate trading. He and Massey proposed that New Mexico, namely Santa Teresa, be that facility.
If Santa Teresa becomes the next hub of international trading with Mexico, New Mexico will see an increase in economic growth, employment and taxable revenue. “We don’t have jobs in southern New Mexico. You bring people out of poverty by giving them economic opportunity,” Pacheco said.
Some are concerned that a large scale overhaul of border trading would lead to poor air and water quality, violence and increased demands on social resources such as schools and hospitals in Santa Teresa and Doña Ana County.
Sanford Gaines, director, UNM Utton Transboundary Resources Center, said that a rural community like Doña Ana County may not have the necessary resources to handle the expense of development and a population surge.
“There’s no such thing as a free lunch,” Gaines said. “If the visions that have been laid out materialize, this does not come without consequences. We need to plan now, not wait for the consequences to be on us, for meeting those kinds of demands.”
Story by Jazmen Bradford
Media Contact: Carolyn Gonzales, (505) 277-5920; e-mail: cgonzal@unm.edu
Posted by kwentworth at December 19, 2008 04:26 PM