Trade, Immigration, & Global Competition: A Dialogue with U.S. Chamber of Commerce

American Chamber of Commerce of Mexico—Monterrey

Monterrey, Mexico
August 27, 2003

Thank you, Jim (Fendell). Good morning Governor Elizondo, Secretary Zambrano, ladies and gentlemen. I'm very pleased to be in Monterrey.

I'd like to thank our friends at the American Chamber of Commerce of Mexico for hosting me, especially James Callahan and Jack Sweeney in the national office, and Fernando Banchs [BANKS] and Roberto Cavazos [CA-VA-ZOS] here in Monterrey.

I'd also like to thank Jerry Mitchell and the rest of the staff of the U.S. consulate for their warm hospitality.

With the U.S. Congress on its August recess, President Bush enjoying time off at his ranch in Texas, and most of official Washington on vacation, I thought it was a good time to get out of Washington myself to reconnect with some important friends within the Mexican government and business community.

Yesterday in Mexico City, I had an opportunity to meet with President Fox and Secretary Derbez. We had a great discussion about the future of U.S.-Mexican relations, and I'll talk today about some of the issues that came up.

I'm here in Mexico because I believe that, together, the U.S. and Mexican business communities face some very unique and serious challenges as well as opportunities.

It's hard to believe that in just two weeks the world will observe the second anniversary of the September 11th terrorist attacks—events that significantly changed U.S.-Mexican relations and how we approach issues such as immigration, security, and cross-border commerce.

Think back for a second on where our relationship stood before that day. Though our economies had taken turns for the worse, there was reason for optimism about where the relationship was headed.

Mexico had implemented some difficult—yet much needed—economic reforms and was coming off a year of 7% growth, making it one of the best performing large economies in the world.

NAFTA had tripled U.S.-Mexico trade levels to $250 billion annually, becoming a model for free trade in this hemisphere and around the world.

Just days before 9/11, President Fox gave an historic address to a joint session of Congress and became the first foreign leader to be honored at a state dinner at the Bush White House.

With both presidents showing strong leadership, a more modern U.S. immigration policy designed to create even greater economic opportunities for our people seemed inevitable.

Mexico and the U.S.—already the closest of friends because of the success of the NAFTA—were moving toward a more complete partnership for the purpose of mutual economic opportunity, growth, and freedom.

But 9/11—and the response to it—changed everything.

The events of that day facilitated a downward slump in the global economy that neither the U.S. nor Mexico could avoid.
The U.S. was forced to reexamine its approach to immigration, border security, and international commerce to address the terrorist threat.

Let's be honest—these events took the U.S.-Mexico relationship off of center stage. The momentum stalled. Tensions increased.

Events in Afghanistan, the Middle East, and Iraq—as well as issues of homeland security—preoccupied my government, and they still do to this day.

I know the resulting lack of progress on immigration and border security issues has disappointed and frustrated our friends here—and the business community in America is working to change that.

But there are important economic reforms that Mexico itself must address if it intends to strengthen its relationship with the U.S.

Much of the enthusiasm for economic reform that was so apparent when President Fox took office has since dissipated, and Mexico is feeling the consequences.

Waiting to ride on the coattails of a U.S. economic recovery is no strategy for growth.

The purpose of my visit is to share with you ideas on how to get our relationship—and the Mexican economy—moving forward again.

As I see it, there are three priorities the U.S. and Mexican business communities must work on together.

First, re-establish momentum toward U.S. immigration reform that opens the door to permanent and guest workers as well as to visitors—without compromising security.

Second, work to implement a more cost-effective approach to border security that frees up the flow of goods.

And finally, encourage Mexico to take the difficult yet necessary steps toward becoming a truly modern, developed free market economy.

IMMIGRATION

Let me begin with immigration. Being in favor of immigration reform is not a very popular position in the U.S. these days.

Improving security has become our nation's highest priority, and in the minds of many Americans, that means making it more difficult for any and all foreigners to gain access to our country.

High unemployment—along with highly publicized reports of U.S. jobs moving offshore—have also undercut support for immigration reform.

Yet the inescapable reality is that the American economy depends on immigrants, and it cannot prosper without them.

A declining working age population, a growing gap between skilled and unskilled workers, and the impending retirement of the baby boom generation have conspired to create a labor crisis that threatens our economy and our position in the world.

The projections of economists and demographers are alarming. The U.S. Bureau of Labor Statistics reports that by the end of the decade, the U.S. economy will create 22 million jobs.

But at current immigration levels, our projected workforce growth over the same period is just 17 million. If my math skills are up to par, that means we'll be short 5 million workers in just 7 years from now.

We also depend heavily on temporary guests to visit our country for vacation, to get an education, receive medical care, conduct business, or to work for a few months before returning home.

However, changes to our visa system over the past year have made this type of travel to the U.S. much more difficult.

U.S. Chamber members with operations overseas tell us that visa requests for their employees frequently fall into a black hole or go unanswered for months.

These visa backlogs have strained many of our business and international relationships and have created problems and costs for our economy.

I told President Fox yesterday—and I say to you today—that the U.S. Chamber of Commerce is absolutely committed to immigration reform.

We will lead this fight, and we will not rest until we win.

Specifically, the Chamber is working to create a system that:

• More logically and effectively screens, identifies, and documents all people who wish to come to the U.S., while allowing legitimate travelers and workers to enter without delays;
• A system with reformed and expanded visa and temporary worker programs that allow Mexican citizens to work legally in the U.S. and return to Mexico on a regular basis—bringing with them wages for investment in this country's economy.
• A system that enables the enforcement community to focus on high-risk and unknown persons and those unwilling or unable to come out of the shadows;
• And, a system that extends legal recognition to the millions of immigrants already working and paying taxes in the U.S.

And to those who say these reforms don't square with the need to increase security, we say to them that the right kind of immigration reform will enhance security.

And, it will cut down on the number of immigrants who tragically die in the Arizona desert or in a sealed rail car trying to fulfill their lifelong dreams.

The U.S. Chamber is leading the charge for immigration reform in several ways.

Chamber policy experts have testified before Congress on this issue—and so have I.

We serve on a government task force that will recommend ways to implement an entry-exit process at our nation's borders—without choking off the flow of people and goods.

We have developed a very close working relationship with the Department of Homeland Security, an agency we helped shaped through our lobbying efforts.

And we've even signed up organized labor as an ally on key pro-immigration proposals. Business needs the workers, and labor unions hope to organize them.

A year or even a few months ago, the prospect of Congress acting on immigration reform was slim to none.

But in part because of the Chamber's non-stop lobbying efforts, several pro-immigration bills have now been introduced—and more are on the way.

Though the chances of any of these bills becoming law during this year are slim, the need for reform is back on the radar screen in Congress and the White House.

BORDER SECURITY

Of course, immigration reform must go hand-in-hand with a commonsense border security policy that balances our security needs with our need to move an enormously large volume of goods.

Everyday, more than $700 million of commerce crosses the U.S.-Mexican border, making it one of the busiest commercial zones in the world.

How do we protect ourselves from potentially harmful shipments without disrupting supply chains built for a "just-in-time" economy?

We can look at this issue as a problem, or we can see it as an opportunity—an opportunity to make our borders more secure and more efficient at the same time…an opportunity to significantly upgrade a border infrastructure system that has been starved for badly needed investment for many years before 9/11.

Many people talk about "striking a balance" between commerce and security, implying that the only solution is to accept a little less prosperity and a little less security.

But that's not good enough in my book. We should aim higher and find win-win solutions for trade and safety.

Through smarter technology, we have the capability to target unknown or suspicious cargo and people without holding up routine deliveries.

But it's going to take cooperation, commitment, and most importantly, leadership from both countries to make it work.

ECONOMIC REFORM IN MEXICO

Immigration reform and safe, efficient borders are critical to the future of U.S.-Mexican relations. But so, too, is a renewed commitment in Mexico to fundamental economic reform.

When I travel to other countries, I'm somewhat reluctant to tell others what to do. That's because we have so much to do in our own country.

But let me offer our friends in Mexico a few words of helpful advice.

I believe Mexico's economic progress in the 1990s has given way to complacency and stagnation, and this has greatly threatened its competitive position in the world.

The rules of engagement in the global economy are simple: capital will go where it is welcome, where it feels protected, and where it has the best chance to grow and make a profit.

By those criteria, emerging markets such as China are posing a significant competitive challenge to Mexico, stealing from it valuable manufacturing plants and jobs that have been here for decades.

To stop the exodus of jobs and to improve its competitiveness on the world stage, Mexico must:

• Deregulate key industries like telecom and energy
• Invest in transportation infrastructure
• Provide tax relief for overburdened businesses
• Streamline complicated labor laws
• Invest in education and worker training systems designed for a higher-skilled workforce; and
• Cut down on state corruption.
  

I believe that if Mexico takes these much-needed steps, it will become be a leader in the global economy.

CONCLUSION

Ladies and gentlemen, Mexico and the U.S. are bound by a long history, a common border, and a friendship that is fundamentally strong—despite current tensions.

The U.S. business community values Mexico as one of our largest trading partners, as a trustworthy neighbor, and as a market of tremendous potential and opportunity.

We want Mexico to succeed. A successful, stable, prosperous Mexico is in the vital interests of the United States.

Today, our friendship is being challenged by the realities of the new world in which we live.
As business leaders, we must work hard to convince our governments to make this relationship a high priority.

We must convince them to look past the various trade disputes and other tensions that will inevitably crop up from time to time.

We must never tire in our efforts to talk about all of the good things NAFTA has brought to both our countries.

NAFTA's opponents have not fallen silent—and neither should we.

I pledge to all of you that we will put the full strength and resources of the Chamber of Commerce of the United States behind the effort to strengthen and expand our vital relationship.

If we do this and do it together, then we will not only preserve the blessings of liberty, democracy and prosperity for future generations of Mexicans and Americans, but we will also extend these blessings around the world.

Thank you again.