Balido: Mexico logistics conference inspires confidence in North American economic prospects

PHOENIX, August 13 - I recently returned from Mexico City where the Border Trade Alliance presented the conference, Trade and Security:

The Impact on Logistics, in conjunction with Mexico Now magazine. I walked away from that event increasingly optimistic about the prospects for our shared border with Mexico as a region that will be integral to our ability to emerge from this Great Recession strong.

Here are a few reflections on the event, which was held at the Four Seasons hotel with more than 250 trade professionals:

Cooperation is key

During a panel discussion with economic-development officials from New Mexico, Arizona and the Mexican state of Chihuahua, I was struck by the comments of New Mexico Economic Development Secretary Jon Barela and his counterpart across the border in Mexico, Dr. Alberto Chret?n. It was obvious from their remarks that these two men know and respect each other. They made clear that by working together, states on each side of the border can be assets in the fierce fight to retain and attract jobs.

Consider the story of? Interceramic, Inc., a Chihuahua company that recently established a distribution center in southern New Mexico in the port community of Santa Teresa, one of two pilot ports for the future CBP pre-clearance process that will clear merchandise northbound into the U.S. from Mexico, bypassing the traditional port inspection. That key win, along with the development of a $400-million Union Pacific rail hub, prompted Barela to tell the Associated Press, "We are very bullish on the future of Santa Teresa."

I join him in his optimism. By integrating their manufacturing and distribution offerings to growing companies, Mexican and U.S. border states are better positioned to achieve economic gains and boost the number of jobs in their communities.

Multinationals look for smooth transition

The conference featured remarks by Dr. Arnulfo Valdivia, a Cambridge-educated economic adviser to the campaign of Mexico's recently elected president Enrique Pe?a Nieto. While he was not in a position to speak definitively for the incoming president, his comments did help to calm the nerves of businesspeople sweating over whether they are facing a huge sea change in the way Mexico treats foreign companies.

Uncertainty is a killer for business, and doing business in a foreign country only increases the opportunity for uncertainty as companies attempt to read the tea leaves to figure out what election results could mean for their bottom lines.

Dr. Valdivia's comments indicate that the new administration is well aware of the need to promote an environment of regulatory certainty and that the Pe?a Nieto team will be doing all it can to send a message to the international business community that Mexico continues to be an attractive place to invest. I had the opportunity to visit with Dr. Valdivia and his staff for an extended period of time and look forward to continuing to share ideas on sound policies for our common border.

After all, as former U.S. Ambassador to Mexico Tony Garza? points out, Mexico's "fundamentals are strong and it has weathered the crisis relatively well." There's no reason to jeopardize the country's strong economic standing.

China doesn't always add up, North America looking better

It wasn't too long ago that the North American manufacturing story was that of a fading sector, moving to Asia in search of cheaper labor and a welcoming regulatory environment.

Based on comments by Mexico Now editor Sergio Ornelas, however, we can expect the economic climate to continue to brighten for North America as manufacturers look to stem the rising costs of transporting cargo to consumer markets such as the U.S. caused by high fuel prices.

Asia also lags in its ability to protect manufacturers' intellectual property rights and in ensuring a stable, loyal workforce. With labor costs on the rise in China, North America continues to lure jobs back closer to home. There are some manufacturing sectors that are likely gone for good, such as in textiles and footwear. But in areas requiring heavy machinery and technical expertise, Mexico is making a good case for itself.

Security was the elephant in the room throughout the conference, and its effect on Mexico's ability to be viewed as a safe place for investment cannot be dismissed. As newly elected Mexican Congressman Carlos Angulo Parra of Ciudad Ju?rez made clear in his presentation, there are organized crime factions that are still very much battling for control of drug trafficking routes. They are not, however, systematically targeting the maquiladoras of foreign firms.

As we await the outcome of a presidential election here in the U.S. and anticipate its outcome on our own economy, I believe Mexico is approaching its inauguration of a new president with momentum for continued growth.

Nelson Balido is the president of the Border Trade Alliance.

Source: http://www.riograndeguardian.com/business_story.asp?story_no=8

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