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Benefits of U.S.-Mexican Business Partnerships

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U.S.-Mexican business partnerships makes the United States more competitive.

BY ANTONIO A GARZA

With over $1 billion of trade each day between the United States and Mexico, our two countries are interconnected like never before.   As a native of the border region, I can honestly say that nowhere is this more evident than along our 2,000-mile frontier, where cross-border ties have meant long-standing and fruitful business between Mexican and American firms. 

With a population of well over 100 million, a fast-growing middle class with increased spending power, and its geographic proximity to the United States, Mexico is an excellent market for companies looking to increase their sales.  Many U.S. firms already do business in Mexico: in 2006, U.S. export sales to Mexico topped $134 billion, a 38 percent increase over 2002.  This dynamic has solidified Mexico as the country’s second largest export destination—and created new opportunities that support jobs and greater tax revenue across our nation.    

INFRASTRUCTURE PLAN

Now, U.S. firms stand to benefit even more from key Mexican growth initiatives. In July 2007, Mexican President Calderon unveiled his administration’s National Infrastructure Plan (NIP) aimed at boosting the country’s international competitiveness.  The NIP aspires to catapult Mexico into the world’s top 20th percentile for infrastructure competitiveness by 2030.  In addition, Mexico attracted record levels of foreign direct investment in 2007, making our North American region more competitive – and increasing U.S. exports to boot.

The Mexican government will announce billions of dollars in bid proposals over the next five years for over 300 key projects.  These include new airports and runways, ports and piers, intermodal terminals, roads and railway lines, environmental technologies, energy, information technologies, and more. 

These projects, to be managed through public-private partnerships and financing, are expected to generate opportunities worth nearly $141 billion, with many tenders to be issued in 2008-2009.  The U.S. Mission in Mexico, through its U.S. Commercial Service staff, is working closely with American and Mexican firms to help them partner, bid on, and win these projects.  The U.S. Trade and Development Agency (USTDA), working with our U.S. Embassy in Mexico City, has concluded evaluations and identified over thirty key near-term infrastructure projects where U.S. firms are very competitive.  These include:   

Seaports.  Five new seaports are to be constructed, and another 22 ports will be either expanded or modernized.  Approximately $6.6 billion in funding from private investors will be distributed throughout 17 of the projects.

Airports.  Three new airports will be constructed in the Mayan Riviera, Puerto Penasco and Ensenada, and another 31 airports will be modernized—many of these projects will start in 2008.

Energy Sector.  The oil, gas and electric power sectors are a priority for Mexico, requiring the construction of oil platforms, power and LNG plants, and deep-water exploration projects.  More than $76 billion has been earmarked for up to 40 projects aimed at boosting capacity for hydrocarbon production, exploration, refining and production.  Electricity infrastructure improvements require $35 billion in investment. 

Environmental Technologies.  To increase the availability of clean drinking water the NIP allocates $14 billion for 50 projects, including three new aqueducts, seven wastewater treatment plants, and the modernization of 13 treatment plants in Acapulco.

Highways.  $26.6 billion will be targeted for the construction, modernization, and refurbishment of nearly 11,000 miles of highways and rural roads all over Mexico -- over 100 projects are confirmed or in the planning stages.

Information Technologies.  All of these infrastructure projects will require extensive use of information technologies in the areas of computers, security systems, wireless and telecommunications networks. 

UNIQUE EVENT

To help U.S. businesses access these opportunities, USTDA and the U.S. Commercial Service have planned a unique business development event, U.S. and Mexico: Building Partnerships in Infrastructure, to be held February 26-28, 2008, in Mexico City.  I will join U.S. Commerce Secretary Carlos Gutierrez and Acting USTDA Director Leocadia Zak to bring U.S. and Mexican firms together at the conference, where they can learn more about the NIP, have one-on-one meetings with key decision-makers on over three dozen hand-picked projects, and develop immediate and long-term business in this market.

Many U.S. companies have found Mexico to be a lucrative market.  Toyotalift of El Paso, is a sales and service provider, selling and leasing U.S. manufactured forklifts.  With help from the U.S. Commercial Service the firm identified key Mexican import brokers, resulting in new sales to Mexico, a major market for the company.   Mr. Bruce Hoffman, Branch Manager, says Mexico's continued infrastructure development is spurring growth of improved logistics, transportation and distribution networks--and business for his company.   "The real key to doing business in Mexico is building those personal relationships," he says.  "Not only are U.S. goods highly regarded, but American firms frequently have a leg up on international competitors when it comes to reputation for after-the-sales service."  Hoffman says that export sales to Mexico and other countries have enabled his company to sustain and support new American jobs at its El Paso headquarters.

Mexico is clearly open for business for U.S. companies, and here in Mexico City we’re ready to help your exporting firm find the right contacts and grow your business.  

Antonio O. Garza is the U.S. Ambassador to Mexico.

 

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