Mexico's Trade Agreements: Is Brazil Next??

As Mexico has started talking to Brazil about a possible trade agreement once again, I thought I would round up some interesting articles about Mexico trade that I've read recently.

Israel, Austria...Mexico? from The Economist

Mexico, Brazil Start Trade Negotiations from BusinessWeek

Texas Reaches a Milestone in Trade with Mexico from The Houston Chronicle

Cuba and Mexico Sign an Agreement to Boost Bilateral Trade from the Cuba News Agency

It's a very encouraging sign to see Mexico in talks with Brazil and Cuba for trade agreements.  Mexico is one of the countries with the most trade agreements in the world.  As Mexico becomes a bigger player in the international markets with its exports, it will certainly help to boost the Mexican economy and hopefully lead to more job creation. 

New Border Crossing Opens in Mexico

The new border crossing is a 4 lane, $70 million dollar project, which was built to help alleviate congestion. 

The crossing is officially called "San Luis Rio Colorado II" and is located in San Luis Rio (the Mexican State of Sonora) and will connect to Yuma, Arizona. 

It is estimated that 220,000 vehicles will use the new border crossing on a daily basis.

The new port is approximately 5 miles to the east of the original "San Luis Rio Colorado" border crossing. 

Mexican Shrimp Imports - Change of Plans?

Recently, the United States placed a ban against Mexican shrimp imports.  The reason behind the ban?  The United States claims that Mexican fishermen do not have the proper safety measures in place to protect sea turtles. 

In a twist of fate, on May 12 the Deepwater Horizon rig (British Petroleum) exploded, leading to one of the biggest oil spills in history.  Scientists say that the leak could be as large as 95,000 barrels of oil a day. 

Mexico is now considering taking its case to the World Trade Organization in order to begin exporting Mexican shrimp into US territory once again.  Mexico argues that they do have the proper methods in place and strongly defend their shrimping practices. 

It is still too early to tell the effects of the BP Oil Spill, but shrimp farmers in Mississippi and Louisiana are already preparing for the worst and the first round of lawsuits are being filed.  Will the United States change its stance because of recent events?  We can only wait and see...but if there was a shrimp shortage in the United States before the oil spill ocurred, things will only get much worse if the Mexican shrimp ban continues. 

Why repealing NAFTA would be a mistake

Recently, U.S. Rep. Bart Stupak of Michigan, joined with two other Democrats and a Republican to urge congress to repeal NAFTA. They claim that NAFTA has cost the US thousands of jobs and not lived up to expectations.

#1: Canada and Mexico are the United States two biggest trading partners

In 2008, the US exported over $251.5 billion dollars worth of goods to Canada (up 8.8% year over year), while exports to Mexico were $137.7 billion (up 2.6%).

U.S. goods exports to NAFTA partners have surged by 171 percent since 1993!!!

#2: The jobs lost in the US were low paying, unskilled labor jobs

Many politicians main arguement against NAFTA is that it has taken away jobs in manufacturing states like Ohio and Michigan. The fact is that globalization has created an environment where the lower skilled jobs will go to the developing countries. This would have happened with or without NAFTA. Instead of fighting to keep lower skilled jobs in America, we should concentrate on retraining our workforce and giving them the skills they need to survive in the global workplace.

#3: Increased exports will help many small and medium sized businesses grow

When domestic sales are decreasing or stagnant, the best place to look for increased sales is abroad. There are people around the world eager to buy products that are made in the USA, and with the weakened dollar, now is the time to take advantage of this trend. Increased sales from exports can help some companies through a recession.

See this great article at USA Today for some success stories:
Exports help U.S. companies climb out of recession

#4: Withdrawing from NAFTA would hurt US farmers and manufacturers the most.

One of the reasons US agriculture has been so successful in other countries is because of the preferential tariffs we receive as a benefit from NAFTA. If the US were to withdrawl, we would no longer be seen as a preferred trading partner and Canada and Mexico would look elsewhere to acquire their produce, grains, etc., leaving the US manufacturers out in the cold.

Let's keep it real here...we are not currently at 10-12% unemployment in the United States because of NAFTA. Would repealing NAFTA send thousands of jobs back to the US? No! These low paying, unskilled jobs went away for a reason. NAFTA provides the opportunity for our small and medium businesses to grow and the United States to compete globally.