Secretary's Speech

Secretary of Commerce Carlos M. Gutierrez
American Chamber of Commerce of Mexico
Mexico City, Mexico

Thank you. I’m delighted to be here. Each time I return to Mexico, I see a land transformed in many positive ways from the country where I lived and studied nearly 40 years ago.

Mexico today is a strong, outward-looking democracy. It is focused on promoting free trade, economic growth and security in the Western Hemisphere.

As President Bush told President Calderón last November, Mexico is a priority for the Bush administration.

Mexico is our friend, our neighbor, our trading partner. The links between our nations are many. We share values as well as a border. Mexico has the largest Hispanic population in the world and the United States has the third largest. I’ve come today to talk about how we make a close and growing relationship even stronger.

Let me begin by thanking the Chamber and the business community for your work in building U.S.-Mexico economic partnerships and making NAFTA a success.

Look at what happened to our economies between 1993 and 2005: the United States grew 48 percent; Mexico grew 40 percent. We can grow together.

With your support, NAFTA unleashed a torrent of trade between our countries.

Since NAFTA entered into force, U.S. exports to Mexico have grown 189 percent ($41.6 billion in 1993 to $120 billion in 2005), and Mexico’s exports to the United States have grown 326 percent ($39.9 billion in 1993 to $170.1 billion in 2005).

We’re still calculating 2006 statistics. But, through November, U.S. exports to Mexico were $124 billion, up nearly 13 percent over the same period in 2005. And Mexico’s exports to the United States were $183 billion, up nearly 18 percent. Despite these incredible numbers, there are still missed opportunities.

We want to work with President Calderón to continue to create a favorable environment in which U.S. and Mexican businesses can take advantage of these opportunities.

As you know, the World Bank recently ranked Mexico as one of the top three economic reformers in the world last year.

President Calderón’s 2030 Plan builds on this progress. It’s a strong and ambitious initiative aimed at promoting a vibrant business climate, entrepreneurship, health care, education, and a thriving consumer class throughout Mexico.

And President Calderon has hit the ground running. He’s targeted drug lords and crime. And he’s promoting the competitiveness of Mexico’s key sectors.

We applaud his commitment to making Mexico one of the world’s top ten economies and eliminating extreme poverty.

We will be working closely with his new administration on ways we can further enhance the commerce of our countries and the competitiveness of our hemisphere.

Both governments are working to create an environment in which business can prosper and create new jobs.

What are the components of such an environment? If we look around the world at economies that are flourishing, we see certain common elements. Let me mention three that are high on the list:

First, Transparency and Predictability in the Rule of Law

In a business-friendly environment, a company needs to know what the rules are going to be five or ten years from now so they know how to play the game.

It needs to be able to compete on a level playing field. It needs to be sure that commercial disputes can be addressed through civil proceedings. And it needs to know that the rule of law will apply to, and for, everyone.

With a few key strokes, investors can move money into and out of a country.

Second, Investment in Human Capital

A robust private sector attracts investment, generates jobs and fuels economic mobility.

Education is the key to producing the entrepreneurs, the innovators and the workforce necessary to maintain a robust private sector. I know that education is one of President Calderon’s top priorities.

In today’s highly competitive global economy, no nation can afford not to invest in human capital and educate, cultivate and promote the talents and abilities of all its citizens.

One of the challenges we’re facing in the United States is ensuring that our young people have the math and science skills needed to keep us on the cutting edge of 21st century technologies.

Mexico, if it’s to successfully compete with countries such as China or Vietnam, must do all it can to provide equal opportunity throughout the country. It must invest in education and human capital.

Third, Competitiveness
Through the Security and Prosperity Partnership of North America, we are working with Mexico and Canada to ensure that our region is the safest and best place to live and do business.

As you know, through the SPP we’ve been able to make progress on difficult issues.

To strengthen border security, Mexican and U.S. agencies are exchanging information and establishing protocols to detect fraud and smuggling.

To combat counterfeiting and piracy, Mexico, the United States and Canada have established a task force to develop a coordinated strategy.

To speed cargo shipping, the three countries are working to provide advance cargo-manifest data electronically.

The priority must be to keep out those who would do harm. However, if we’re going to continue to create jobs and growth, we need to maintain this dialogue and do more to make it easier for goods and products to cross the border.

Let me make one thing very clear: this partnership is about promoting the security and prosperity of North America. We each honor the system of government and cultural heritage of the others.

Contrary to what some are saying, we are not creating a common currency. We are not establishing a European Union-like political structure. We are not infringing on the sovereignty of the United States, Mexico or Canada.

What the partnership is doing is working to remove red tape and unnecessary obstacles to trade, to grow our economies, and to enhance the safety and security of all our citizens.

The United States is also working to promote hemispheric free trade and competitiveness.

We can do more to integrate our hemisphere. At President Bush’s request, I’m convening the Americas Competitiveness Forum in June. It will be held in Atlanta, Georgia.

We’re inviting leaders from government, the private sector and academia from the democratic countries in the Western Hemisphere. The purpose is to explore ways to improve our regional competitiveness in the face of new global and regional challenges.

Over the past year, I had the opportunity to personally meet and talk with some of the new democratically elected presidents in South and Central America. Regardless of Party, there was a common theme in all of these meetings: it was an eagerness to promote prosperity and opportunity through education, jobs, economic growth, and social justice.

Most countries, after much experimentation, have recognized that true social justice is not redistributing poverty, but lifting people out of poverty.

True social justice is giving people the opportunity to improve their life and the life of their family; it’s giving them the chance to achieve their dreams.

Trade, capital and free enterprise deliver results. The newly released 2007 Index of Economic Freedom (Heritage Foundation/Wall Street Journal) reports that the world’s freest countries have higher average per capita incomes, lower rates of unemployment and lower inflation.

The correlation to this, according to the study, is that countries that repress their people for political reasons will cause economic suffering. Some in our hemisphere want to turn the clock back, to limit freedom, to hijack hope.

Our vision for the Americas is a region of economic liberty, open markets, and expanding employment and incomes.

These are the seeds of free, secure, and economically strong societies that are transparent, that offer equal opportunity for all, and that place no one above or below the law.

Beyond NAFTA, the vision of creating a hemisphere of free enterprise, lowered trade barriers and greater prosperity is coming together country by country.

Mexico led the way for Latin America by joining NAFTA. Others like Chile and Central America are emulating Mexico’s success. And we have agreements with Colombia, Peru, and Panama in the pipeline.

Over time, it remains our goal to achieve the vision of a free trade area of the Americas. One way would be this: where agreements have already been reached, stitch them all together.

Mexico, with more free trade agreements than any other Latin American country, has been in the lead of Latin American rejuvenation, promoting social justice, instituting reforms that empower people, boosting jobs and opportunity, and raising living standards.

With its rising middle class and record high homeownership, Mexico clearly has a number of best practice stories to share, which we hope to hear at the Americas Competitiveness Forum.

It was my good fortune to live and work in Mexico at the beginning of my career. I have seen the dramatic economic changes taking place in this beautiful country. Since 2000, Mexico’s real GDP is up 9.4 percent. Inflation has been cut by more than half. International reserves have more doubled. More than a quarter trillion dollars in annual trade is done across our shared border.

The Calderón administration is committed to building on this success. We are committed to working with our neighbor and our partner.

The United States and Mexico have a warm and growing friendship based on fondness and deep respect. We look forward to working with President Calderón’s administration and you to strengthen our relationship and to build a hemisphere of peace, prosperity, and opportunity for all.

Thank you.