Mexico Institute in the News: Mexico's Resilient Industrial Machine
U.S. manufacturers have success in Mexico even with problems such as the drug cartels. Mexico's GDP is expected to continue to grow.
March 2012, Forward
Seven years ago, EE Technologies (EET) opened a new plant in Empalme, Mexico, on the balmy eastern shore of the Gulf of California... ...This was in 2005, a year before President Felipe Calderón declared war on Mexico’s infamous drug cartels. By 2007, as the small American company expanded in Empalme, criminal organizations like Los Zetas, the Juarez Cartel and the Sinaloa gang were unleashing a wave of unspeakable violence in Northern Mexico... ...Mexico’s 2010 GDP of slightly more than $1 trillion is about two-thirds the size of Canada’s and one-fourteenth as big as that of the United States. Yet Mexico is second in economic power only to Brazil in Latin America. And that power derives largely from industry, which produces more than a quarter of the nation’s GDP. The growth in Brazil and other Latin American economic machines like Peru and Chile relies more heavily on sales of raw material like coal, copper, bauxite and oil, and thus the potentially volatile commodities markets. Why is all of this important to the rest of the continent? Jobs, says Christopher Wilson, an economist at the Mexico Institute of the Woodrow Wilson International Center for Scholars in Washington, D.C. Six million American workers, one in every 24, depend on trade with Mexico to stay employed. There are 22 American states whose individual Mexico-related jobs exceed 100,000, with California’s 692,000 coming in first and Texas’ 463,000 in second. A “back-of-the-envelope” calculation shows how Mexican GDP growth creates new jobs, Wilson adds: Mexico’s 5.5% growth in GDP in 2010 prompted a $34 billion increase in U.S. exports to Mexico; every $1 billion increase in exports supports more than 6,000 new U.S. jobs. Mexico’s 2011 GDP is expected to grow by 3.8%. If these assumptions hold true, Wilson says,
“144,000 new U.S. jobs could be created due to Mexico’s economic growth in 2011.”
A modest figure, considering America’s jobs shortage right now, Wilson concedes.
“But that’s with everything else being equal. If we don’t do anything else to stimulate trade, we can at least count on the growth rate to create jobs.”...
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About the Author
Mexico Institute
The Mexico Institute seeks to improve understanding, communication, and cooperation between Mexico and the United States by promoting original research, encouraging public discussion, and proposing policy options for enhancing the bilateral relationship. A binational Advisory Board, chaired by Luis Téllez and Earl Anthony Wayne, oversees the work of the Mexico Institute. Read more
Latin America Program
The Wilson Center’s prestigious Latin America Program provides non-partisan expertise to a broad community of decision makers in the United States and Latin America on critical policy issues facing the Hemisphere. The Program provides insightful and actionable research for policymakers, private sector leaders, journalists, and public intellectuals in the United States and Latin America. To bridge the gap between scholarship and policy action, it fosters new inquiry, sponsors high-level public and private meetings among multiple stakeholders, and explores policy options to improve outcomes for citizens throughout the Americas. Drawing on the Wilson Center’s strength as the nation’s key non-partisan policy forum, the Program serves as a trusted source of analysis and a vital point of contact between the worlds of scholarship and action. Read more
