Thank you, Mr. Hernandez and Mr. Jacob, and thanks to both INADEM and the American Chamber of Commerce, our hosts. AmCham always does a great job organizing top-notch business events. I also want to recognize Ambassador Wayne, the Government of Mexico leaders, elected officials, and all of the business leaders here today. Finally, I want to thank the dynamic members of the Mexico-United States Entrepreneurship and Innovation Council who I just met.
Let me start by saying this: I am thrilled to be in Mexico City for my first international trade mission as Secretary of the United States Department of Commerce. The energy from the 17 businesses on this mission -- and the energy among all of you in this room -- remind me of the friendship and shared values between Mexico and the United States.
We both believe in the power of democracy and a vibrant middle class. We both believe that our growing bilateral trade, investment, and supply chains have made us stronger. And we both believe that entrepreneurship and innovation are crucial to our global competitiveness in the 21st century.
The mere fact that we are gathered here today shows how the ties between our countries have dramatically deepened. Our commercial and economic relationship has become one of the most fruitful in the world -- defined by openness, cooperation, and collaboration.
Today, I want to briefly discuss how far we have come in our bilateral relationship and then explore a few ways we can continue to grow and lead together as equal partners.
Over the past 20 years, NAFTA has led to significant economic benefits for North America. It has served as the foundation for our bilateral growth.
American exports to Mexico have increased fourfold. More than 50,000 U.S. firms now sell their products and services here. Two-way trade between the U.S. and Mexico now stands at half-a-trillion dollars annually. To put that in perspective, about $2 million dollars has been traded since I started talking.
Back in the U.S., I remind people that it's not just states along our border that benefit from this relationship. For example, my home state of Illinois is the fifth-largest exporting state to Mexico. In fact, nearly half of U.S. states count Mexico as their first or second-largest export market.
At the same time, business investment in both directions has grown dramatically since NAFTA came into force. Nearly 20,000 American firms now have operations in Mexico And Mexico has risen to become the 15th largest source of foreign direct investment into the United States, supporting thousands of American jobs in sectors ranging from mining to retail.
Altogether, millions of citizens in our countries have good jobs because of our strong trade and investment ties.
In fact, we no longer simply trade with each other. We build things together. Consider this: Imports to the United States of final products from Mexico contain as much as 40 percent U.S. content -- by far the highest of our major trading partners.
In short, we trade with each other more than ever before. We invest in each other more than ever before. And we produce together more than ever before.
In addition to all of this, more than half of Mexico's citizens are now solidly middle class, and Mexico is taking continued steps toward reform and openness.
Mexican businesses and consumers are players in the global economy. They are buying and selling products and services throughout the world -- and I can tell you first-hand that the world is excited about doing business in Mexico.
With that backdrop, the decision to come here for my first trade mission was an easy one. Where better to go than to our close friend and neighbor -- Mexico?
Seventeen companies from key industries have joined me. This week, each of them is building new relationships and partnerships that are beneficial to them AND to their Mexican partners.
For example, Mexico's hospitals are looking for health information technology software to help organize records and manage supplies. American companies on my delegation stand ready to meet the needs of customers -- ranging from blood banks to orthopedic surgeons.
U.S. firms in my delegation are also eager to support efforts to build out infrastructure and transportation links within Mexico -- such as railroads.
In addition, Mexico's historic reforms in areas like telecommunications and energy could create new opportunities and bring substantial benefits to Mexico's people and its economy. Businesses from around the globe hope to help with that transformation.
Given all of this progress, I could not agree more with what President Obama said last year when he came to Mexico City: "A new Mexico is emerging." Mexico's rise is good for Mexico and it is good for the United States. Both countries must continue to open our markets to each other to drive prosperity on both sides of our border.
Before I move on, let me note that there are still many ways in which obstacles impact our two-way trade. Vice President Biden called this the "sand in the gears" when he and I were here last year to launch the High-Level Economic Dialogue. Let me give a few examples.
Clearly, both countries should be investing more in our border infrastructure to handle our growing volume of trade. We are working on this through the 21st
Century Border Management Initiative, but the fact remains: Our border was built for just a quarter of our current volume. It takes too long to move goods and people between the United States and Mexico. With tight government budgets, we must ask these questions: How do we fund these much-needed border infrastructure projects? Are public-private partnerships part of the solution? And which projects should we fund?
A second example of "sand in the gears" is the challenges of infrastructure within each of our countries. We need to make sure that after goods pass through the border, they can move expeditiously and efficiently to their destination.
And, as a third example, we still have challenges in ensuring that our regulations are compatible. Together, our two governments launched the High-level Regulatory Cooperation Council, which is getting input from businesses in industries ranging from food safety to nanotechnology. It is crucial that both sides continue to hear from leaders like you to understand regulatory impediments.
On all of these important issues, we are regularly engaged with the Government of Mexico, but much work remains to be done.
At the same time, I believe that our relationship with the Mexican government has reached a level of sophistication that allows us to focus on entrepreneurship and innovation. The deep trust, openness, and confidence that the United States and Mexico have in each other is very encouraging.
The relationships built between our governments, our businesses, and our people -- including the vibrant Mexican-American population in the U.S. -- have never been stronger. The conditions are ripe for us to fully engage with one another to support Mexican and U.S. entrepreneurs, and to foster cross-border innovation.
MUSEIC is leading the way forward. I am impressed with the Council's accomplishments in their first annual report which is being released today.
Already, the Council has supported business plan competitions in cities like Austin, Guadalajara, and here in Mexico City -- where entrepreneurs pitched their new business ideas. As a result, more entrepreneurs from both countries are: finding investors, applying for patents, and launching new companies.
The Commerce Department is proud to be supporting the Council's work in several ways.
First, we are mapping out the commercial and educational assets along the US-Mexico border, starting with two key regions: Tijuana-San Diego and Monterrey-Texas. Then, we will share this data with entrepreneurs, researchers, and other innovators on both sides of the border so that they can connect to each other. I applaud INADEM's commitment to support the cluster mapping effort.
Secondly, the Commerce Department is working to help further strengthen the legal and tax environment in Mexico. Specifically, our Commercial Law Development Program is providing funds to study tax incentives to promote the formation of new companies in Mexico.
Third, in April, the Commerce Department will host government, business, and university leaders from Mexico (and other countries) to tour research, innovation, and entrepreneurship hubs in the Southern United States. We will spotlight public-private partnerships that accelerate new technologies, attract foreign direct investment, and more. We want to cross-pollinate best practices.
Through all of these efforts -- and more -- we can set the stage for Mexicans and Americans to come together, make breakthroughs, launch new firms, and strengthen our shared competitiveness in the 21st century.
I applaud Mr. Jacob and INADEM for their funding of the Council's workplans.
Also, as you might remember, MUSEIC had its first meeting here in Mexico City last September. I am pleased to announce today that the next meeting will be in April at the University of Texas San Antonio's Institute for Economic Development.
Looking forward, my commitment to all of you here today is this. My Department will do everything possible to foster entrepreneurship and innovation between our countries.
As Secretary, I will continue to take an active role in leading the High-Level Economic Dialogue alongside Secretary Guajardo. And I will soon launch my work as Chair of President Obama's new Committee on Global Entrepreneurship. This will be a group of "entrepreneurial ambassadors" from the United States who will promote a startup culture throughout North America and around the world.
Finally, as U.S.-Mexico ties become stronger and stronger, we must also jointly lead on a global scale. Under NAFTA, the United States, Mexico, and Canada built one of the most competitive and successful economic platforms in the world. I already mentioned how our trade has quadrupled and our supply chains are more integrated than ever before.
That said, NAFTA was not perfect. For example, labor rights and environmental protections were not subject to the agreement's dispute settlement mechanism. And it did not address new realities that simply did not exist when NAFTA was created -- such as e-commerce, the digital economy, the rise of state-owned enterprises, and more.
Today, we have an opportunity to upgrade NAFTA through the Trans Pacific Partnership. The Trans Pacific Partnership will be a high-standard agreement with 12 countries representing 40 percent of the global economy.
This agreement can and should reflect our shared values between the U.S. and Mexico.
We cannot sit on the sidelines while our competitors move forward with their own agreements that lower standards and make us less competitive in markets around the world.
Clearly, the opportunities that will flow from this new agreement are simply too big to ignore. Outside economists have estimated that -- for the United States alone -- this agreement could add more than $120 billion dollars in exports each year. Of course, that would include products that we build through cross-border supply chains with Mexico, as I mentioned earlier.
Securing this agreement is crucial to North America's overall ability to increase exports, promote economic growth, and create good jobs for all of our citizens in the decades ahead. We are on track -- and we must continue to lead together -- to bring TPP across the finish line.
Let me close by wishing you a happy Constitution Day here in Mexico. On the 97th anniversary of your Constitution, it is a time to reflect on and celebrate the dramatic journey that Mexico and its people have taken.
Indeed, both of our countries have successfully built vibrant democracies and economies over the past century.
As we look to the future, it is clear that the United States and Mexico are poised for even greater success due to the cultural, economic, and person-to-person ties that have blossomed between us.
Let's continue to trade, invest, build, and innovate with each other.
Perhaps more than anyone else, all of you -- the visionaries in this room -- understand that our potential is limitless. Thank you for helping us find the very best path forward, and thank you for your time.