U.S.-Mexico Trade Relationship

MODERATOR: Good afternoon. I'd like to welcome you to the Foreign Press Center today. I'd like to introduce U.S. Assistant Secretary of Commerce, David Bohigian. He'll be speaking to you today about the U.S.-Mexico trade relationship.

Mr. Bohigian.

ASSISTANT SECRETARY BOHIGIAN: Thanks, Jen. Well, thanks. It's nice to be here today to talk about the U.S.-Mexico trading and economic relationship. Next week I'm traveling to Laredo -- Nuevo Laredo in Mexico City. And I wanted to give you some previews of what we'll be doing on that trip as well as some previews of our engagement with the new Mexican administration.

First, I hope to be able to gain a firsthand appreciation of the busiest container crossing port on the U.S.-Mexico border. Going to meet with local business officials and better understand how to improve the efficiency of goods crossing the border, at the same time, maintaining the security that's important for all of our citizens. Next I'm going to go Mexico City where I'll be meeting with the new administration, be meeting with business leaders in Mexico City as well. We'll be talking about our shared global, regional, and national trade priorities.

Really when you look at the U.S. relationship with Mexico it's incredibly important to both of our economies and all of our people. That's why we have looked to extend that sort of relationship that we have throughout Latin America, through our free trade agenda. The success of NAFTA has lead us to be able to have successes in other areas.

I think we can build on that success on this trip and throughout the rest of this administration and the start of the new administration in Mexico really to enhance economic competitiveness because when Mexico is more competitive and more prosperous the citizens of the United States are more prosperous as well. So we need to make sure that we're engaging the administration on economic reform. We need to make sure that liberalization of the energy and telecom sectors are key priorities for the new administration, as well as focusing on the rule of law issues, which are increasingly important to our business communities on both sides of the border

We were extraordinarily pleased to learn yesterday that the president-elect will be coming to the White House on November 9th and the President will be discussing many of these issues as well. And we're very pleased that the president-elect is also focused on economic reforms new to his administration because those sort of economic reforms it's been proven time and time again how important it is to get those economic reforms underway early in any sort of administration.

One other mechanism we have beyond the bilateral economic relationship is through a security and prosperity partnership in North America where Canada, Mexico and the United States are working in a three-way partnership to ensure the prosperity of all of our citizens, tackling many of these same issues, whether they be standards or transparency or rule of law, or liberalizing our economy so they're more market focused.

One great measure of this is the World Bank Economic Freedom Index and the ability for -- or they're doing business index. And the doing business index is a place where Mexico has made significant gains in the last year and we hope that this administration will be able to build on those gains. So I look forward to my visit next week and look forward to taking your questions today. Thanks.

MODERATOR: Okay. We'll take questions first in Washington.

QUESTION: Yes. Jose Diaz with the Reforma Newspaper. Can you explain a little bit on what you said about -- what you mean with the liberalization of a telecom and energy sectors in Mexico in the coming administration?

ASSISTANT SECRETARY BOHIGIAN: I will. What we found in the United States, given our history with AT&T, for instance 30 years ago, is that incredible innovation and dynamism were unleashed by the liberalization of the telecom sector. To be able to put information in peoples' hands is one of the most powerful economic reforms that you can have. When you look around the world, the ability for a farmer to call into the market to understand prices or for the ability for a small businessman to better be able to manage his logistics and business with greater telecom services so it's crucially important for the telecom sector to go forward.

I know that the president-elect has made liberalizing the energy sector a priority as well and that's something that really I'm looking forward to going down with a better understanding, what the new administration means by that so we can support their efforts in every way possible because market based energy is one of the most important tenets of our ability in the United States to continually deliver more affordable, reliable and secure energy and we're hoping that Mexico will be able to achieve those sort of gains that we've seen from the market, rather than rely on a monopoly that isn't always able to take care of all of the market needs.

MODERATOR: We’ll take another question from Washington and then we'll go to Mexico City.

QUESTION: Thank you. Mr. Ikeda, Associated Press reporter for Latin America. I have a follow-up regarding the telecommunication question. Would you please talk to us about the ED (ph)-U.S. assessment of the telecommunications situation in Mexico now? So what is (inaudible) in what direction should Mexico orient its policies on telecommunications?

ASSISTANT SECRETARY BOHIGIAN: Thank you. I'm going down to learn more exactly to answer that question. It's important from a U.S. policymaker's perspective and from the Mexican people's perspective to have more market based telecommunications system. And market based here in the United States has led to an array of new services that were unimaginable 20 years ago. So to promote innovation in that sector is certainly important, to promote market-based pricing is certainly important. But to get into specifics now would be to get ahead of the trip itself. I'm hoping to learn more about how we can support the liberalization in the telecom sector.

MODERATOR: Do we have a question from Mexico City?

QUESTION: Alicia Salgado from El Financiero Newspaper in Mexico. The question is just linked to the security in the border. We have a very huge amount of cross border even financial and trade. Thirty-five million sites, I suppose one hour is the amount that is heavily (inaudible) there. Both countries are working in a more flexible way to facilitate a cross-border of the government -- Richard (inaudible) and people. But with the immigration policy and the approval of the construct of a peaceful border issue, how could we compensate the way to -- how to -- who could be compensated a policy between security of the United States and a very good pass* to the border.

ASSISTANT SECRETARY BOHIGIAN: Well, that's exactly the balance that we're trying to strike. When I talk about the security and prosperity partnership of North America, it's chaired on the U.S. side by Secretary Gutierrez who's responsible for the prosperity leg and Secretary Chertoff who's responsible for the security leg. And that shows you the dynamic there of, as you mentioned, $35 million worth of goods crossing the Mexican border every day and making sure that those supply chains are free from counterfeit goods, from illegal goods, and to ensure that we're able to get legitimate goods through the border as quickly as possible because we're depending regionally today across borders in a just-in-time economy for our manufacturers and for services and for all of our citizens to maintain the style of living and the quality of life that they richly deserve.

So the ability to ensure that those goods come through does need to be balanced against the security perspective of ensuring that illicit goods aren't coming through. And we're working with customs officials. We're working with businessmen in logistics area, whether that's express delivery or whether that's rail or trucking to ensure that the kind of metrics that we can find at the border in terms of reducing crossing times and making that more efficient for legitimate goods are the kind of goals that we have in the years ahead.

MODERATOR: Do you have another question for Mexico City?

QUESTION: Nancy Diaz from Excelsior. (Inaudible) of the north of the country of Mexico are planning to do a -- like a consult toward with the states of the south of the United States in order to improve the commerce and your relationship without this -- two countries. So what do you think the council could work and do you approve?

ASSISTANT SECRETARY BOHIGIAN: I'm not familiar with the council that you're

MODERATOR: Excuse me.

ASSISTANT SECRETARY BOHIGIAN: I'm not familiar with the council that you're speaking about. But what I am familiar with is business people getting together in the North American Competitive Council which is made up of leading businesses from Canada, Mexico and the United States to tackle the very problems that I'm talking about today. In many issues, border crossing issues for the free flow of legitimate goods. And I think anytime that businesses can get together across the border, they're interested in solving problems, so they can deliver goods more efficiently, so they can hire more workers. And the ability of those business groups in turn to be able to talk to their governments about the problems that they see to creating those jobs, so when it's important for everyone in government to be able to listen to. So the creation of business groups were able to talk to policymakers is something that the Department of Commerce is always involved in and always looks forward to hearing from the business community about how we can improve their ability to create jobs and increase our standard of living.

MODERATOR: Another question from Washington.

QUESTION: There are some voices in the U.S. Congress and also in cable TV, I guess you are familiar with the names of the anchors*. But that question -- that basically question the concept of the SPP initiative, they consider this is a first step towards some kind of super national organization. And those voices are -- these days very influential in doing, you know, lawmaking within Congress and within the Republican Party. What is the real commitment, you know, in the last two years of this administration towards advancing small, but key specialty points on the SPP because we're seeing, you know, a very slow advancement of many of the goals that are stated, most of them to be enacted by 2008. What's the real commitment to it?

UNDER SECRETARY BOHIGIAN: In fact, I think there are many people in the United States who are confused about what the security and prosperity partnership is and that's really where their opposition leads from. What the security and prosperity partnership is not is a North American union. There's no treaty where we're giving up any sort of sovereignty. There certainly isn't any thought given to making a currency as some people have suggested, common between our three countries. I'll tell you what it is, it's exactly what you were talking about by putting together groups of policymakers and business people to solve issues that effect all of our lives on both security and prosperity, things like a manufactured goods working group where we talk about how to improve our ability to have smaller inventories and increase the ability to hire people because we're working more efficiently across borders. Things like working on common standards, where appropriate, so that we can ensure that people don't need to label things two and three times over when it's the same contents. So we initially had 300 goals in the Security and Prosperity Partnership throughout all these working groups and we achieved over half of them. So we have made real progress. I think the key in the coming months and years ahead is to focus on priorities that really make an impact on the business community and will make an impact on the lives of all our citizens to really focus on those key priorities that will help us create jobs.

QUESTION: Can you talk specifically, obviously, within (inaudible) of during charge off (ph)? What specific points or what specific groups are making progress these days, what can we see achieving soon? And I wanted to comment.

UNDER SECRETARY BOHIGIAN: Sure. I'll tell you one thing that has been achieved on the Canadian side of it, again, and one of the reasons I'm visiting Laredo and Nuevo Laredo is because between Detroit and Windsor we've reduced crossing times by almost half. And the ability for Mexico and the United States at their border to see similar gains, as was mentioned earlier, with $35 million of goods crossing the border every hour. And really the ability to move goods across the Mexican border as efficiently as we do with the Canadian border right now will be absolutely enormous. So that is certainly one goal that we have is increasing the ability to move goods more efficiently across the Mexican border in Laredo and other land crossings as well as giving our partners with the Department of Homeland Security, making ports more efficient and more secure.

MODERATOR: We have another Washington question and then we'll go back to Mexico City.

QUESTION: Eric Greene, State Department. On a different subject, there was a new report put out on the remittances, I don't know if you happen to see it, by the Inter-American Development Bank, saying remittances are continuing to rise substantially this year as opposed to last year. Do you have any reaction to the increase? Is this a good thing, bad thing for Mexico?

UNDER SECRETARY BOHIGIAN: Well, I think when you look at the Mexican economy from a broader standpoint, it's amazing the interdependence that already is there between the United States and Mexico and not just from the remittance standpoint, but from the foreign direct investment standpoint, creating hundreds of thousands of jobs in Mexico through our investments in factories and in all sorts of places of business. So remittances are certainly a part of the Mexican economy. Our goal over the next few years is to be able to ensure that the people of Mexico have great jobs in Mexico to be able to increase their quality of living so that the people there are able to have their prosperity developed at home.

QUESTION: Just to follow up on that, there was another report saying the money that was being sent back from the U.S. to Mexico was not being used for economic development by the government or by the people. They were just using it for private errands, you know, to -- by personal needs, let's say. Do you have any reaction to that? There was an article about that.

UNDER SECRETARY BOHIGIAN: Well, we believe that people make intelligent choices about how to spend their money every day in every country in the world. And the more that people are able to make those decisions about what's best for their family and what's best for their future, is something that we would continue to encourage. So for an organization to try and tell a family how to better spend their money doesn't really make sense to me.

MODERATOR: Do we have another questions from Mexico City?

QUESTION: My name is David Aguilar from El Universal. And many (inaudible) in USA are talking about Mexico will be the next South Detroit. I would like to know if you will talk about something -- automotive business in your next visit?

UNDER SECRETARY BOHIGIAN: I'm sorry. What was the end of the question? You'd like to --

QUESTION: I would like to know if you will talk about automotive business in your next visit?

UNDER SECRETARY BOHIGIAN: Well, the automotive sector is one of the most important shared sectors for regional competitiveness in North America. Whether -- and that's something that when Detroit right now looks at trade, so much of it right now is done with Canada and Mexico and helps us build a more prosperous platform for car making throughout North America. So the ability to get these goods just in time across the border is crucially important for manufacturers that are continually changing their styles or needing to suit customer needs. So the more that we can do to economically put the appropriate standards in place that benefit our safety as well as our ability to move goods more efficiently throughout the auto sector, which is one of our key employers in this country, is something that I'll certainly be focusing on to better understand how we can make that work better for all of us.

MODERATOR: Do we have another question for Mexico City?

QUESTION: Again, Nancy Diaz from Excelsior. (Inaudible) from the study of the IADB, the institution has said that remittances will continue to grow in the next years and actually that the meanwhile (ph) we will continue growing independent of the -- you (inaudible) the wall. So what do you think about that and the expectations that immigration wants to stop?

UNDER SECRETARY BOHIGIAN: Again, the priorities for this trip and my continued engagement for the next two years is to ensure that I'm understanding better what can help create jobs in the United States and create jobs in Mexico. The ability to really develop the economic reform as I mentioned in telecommunications, in energy, in rule of law or something and be crucially important for the Mexican economy in the years ahead, develop jobs in Mexico. We've had similar gains in the United States through (inaudible) many of our sectors. And I'm looking forward to learning more about the president-elect's reform plan so that we can support that in any way possible to create jobs in Mexico.

MODERATOR: Okay. We have time for one last question.

QUESTION: I'm Adriana Garza from Reuters. And I didn't (ph) notice if there were any questions regarding NAFTA. But I would like to know if you could address the situation regarding pending products like sugar here and the exports of corn and other products from Mexico, please.

UNDER SECRETARY BOHIGIAN: Well, really that's not going to be one of the focal points in my visit. That's something that's typically handled by the Department of Agriculture here. My focus will be more on the goods and services that can help propel Mexico into the 21st century, manufactured goods, services from financial services, telecommunication to energy. So I won't be focusing on this trip on that. I will be focusing on, in addition to just the business community, the ability to move goods more efficiently across the border through customs. So I look forward to learning more about that, but I won't be learning about sugar and corn on this visit.

MODERATOR: One quick one.

QUESTION: Yes. On another trade related issue for Latin America. Can I ask a question on another trade related issue in Latin America?

UNDER SECRETARY BOHIGIAN: Sure.

QUESTION: Okay. Can I ask -- as you know, the GSP and ATPDA act expire next December. And some sources say that despite your trying to get those acts renewed in Congress, also you are trying to take some countries out of that list. From the GSP, especially Brazil and Argentina and from the ATPDA Ecuador and Bolivia. Could you confirm that version?

UNDER SECRETARY BOHIGIAN: Well, the administration is currently reviewing the GSP program as well as all of its trade preference programs right now. When we review that we do that in accordance with the law. We don't do that for any sort of punitive reasons. While some have suggested that cooperation in Doha is a prerequisite for us to be able to extend benefits, that's not the case. There are clear mandates laid out by Congress. We intend to follow them. And the administration is still deliberating as to the best way to ensure that our trading partners enjoy the benefits of free trade.