Mexico today is one of the world’s most open economies, the thirteenth largest by GDP, and the United States’ third largest trading partner. While many Americans associate Mexico with words like “drugs,” “violence,” “immigrants,” or maybe “Cancun,” the truth is that the US economy is inextricably linked to Mexico’s, and vice versa: economic, civil, social, or political unrest on one country greatly affects the other, both directly and indirectly.
The aim of this three-part blog series is to look at the bigger picture: Mexico is far more important to the US, and the US to Mexico, than conventional wisdom suggests — and in many more ways.
A recent New York Times article discusses the importance of Mexico’s rapidly approaching presidential elections to the state of Texas. However, these elections will affect more than just the border states. The economies of more than a dozen other states, including Nebraska, Iowa, and Michigan depend heavily on exports to Mexico. Mexican companies are now the largest suppliers of cement, baked goods, and dairy products to the US market. Mexico is also the second largest supplier of oil to the US, after Canada.
In addition to providing each other with important export markets, the Mexican and US economies are becoming increasingly integrated in ways that blur traditional understandings of trade. The regional supply chains of US companies criss-cross the US-Mexico border, meaning that Mexico and the US work together to manufacture goods that are eventually sold on the global market. For example, cars built in North America may cross the border as many as eight times as they are being produced.
In other words, the US and Mexico are more than just neighbors. Economic interdependence, shared cultural heritage, and grim security issues that both countries must face together mean that what happens in Mexico affects the US in more ways than just immigration and drug trafficking. Mexico’s economic, political, institutional, social, and security challenges are all interconnected: whoever wins the Mexican presidential elections on July 1 will have to face a myriad of complex problems. He or she will help set policies that will both directly and indirectly affect everyone from US business leaders to migrant workers to white suburban teenagers.
A Mexico that is fully equipped with leaders who can help navigate the process to the reforms the country needs is an even more important economic and political ally that can help increase prosperity throughout the region.
This is not a zero-sum game. If Mexico flourishes, the US will also flourish.