Draft of: When the USA sneezes Mexico catches Pneumonia

When the USA sneezes Mexico catches Pneumonia

What does this mean and why is there so much resentment on the part of many Mexicans towards the United States of North America?

Well, let’s see:

…, over 150,000 U.S. citizens venture into Mexico on a daily basis, according to the Arizona Dpt. of Real Estate.

Mexico is the United States’ third-largest trading partner, while the United States is, by far, Mexico’s largest trading partner. Mexico ranks third as a source of U.S. imports, after China and Canada, and second, after Canada, as an export market for U.S. goods and services.

The United States and Mexico have strong economic ties through the North American Free Trade Agreement (NAFTA), which has been in effect since 1994. Prior to NAFTA, Mexico had followed a strong protectionist policy for decades until it began to unilaterally liberalize its trade regime in the late 1980s.

The United States is the largest source of foreign direct investment (FDI) in Mexico:

Foreign direct investment in Mexico is reported to have recorded a 21% increase in the year 2007. It amounted to $23.2 billion usd. This was the second highest in the country's history. It was only next to the $29.5 billion usd investment made in 2001.

Analysts have considered that since 2008 the US economy is suffering from multiple effects of recession. It may be noted that, Mexico is highly dependent and interlinked with the US economy through various trade relations.  For instance, and with regards to;

Transnational Companies:
In this era focus has been on foreign direct investment normally executed through the engine of Transnational Corporations (such as; Wal-Mart, McDonald’s, Ford, and others, to name a few). And, according to the Global Investment Trends Monitor dated January 24, 2012-, Mexico received 19.6 Billion usd in Foreign Direct Investment for 2010, and 17.9 Billion usd in 2011 for a -8.8% decrease.   Most of this FDI (foreign direct Investment) coming from North American Transnational Companies.

It may be noted that FDI inflows are crucial for the modernization of the Mexican economy. It is also considered to be one of the employment generating avenues for the Mexican economy.

Mexican Workers USD Remittances:
The Bank of Mexico reported $21.271 billion usd in remittances in 2010, the bulk of which originated from the United States.

Remittance income into Mexico has seen significant fluctuation since 2008 as its remittance income remains highly dependent on the economic cycles within the United States. Historically, Mexico’s overseas workers’ remittances averaged an 18.78% compound annual growth rate from 2000 to 2007. However, remittances reported an overall 3.5% decline in 2008 as the United States suffered from the global economic crisis, hence restricting the demand for Mexican labor.

The Real Estate Industry:

Since the early 1960s, Mexico's coastal communities have been marketed as desirable retirement alternatives for American retirees seeking beach access and oceanfront views at prices more affordable than comparable beachfront communities in California or Florida.

The Mexican market research firm, SOFTEC, reported that during the last quarter of 2009, there were 957 new vacation and retirement focused development projects across Mexico with the majority being located in coastal areas. Of these projects, there was a total inventory of 49,983 new homes on the market. The firm expected sales of less than 7,000 new vacation homes in Mexican coastal communities during 2010 and into 2012, or approximately 14% of the total inventory product.  SOFTEC also reported that sales of beachfront property had dropped by over 20% (when compared to sales prior to 2008) and a recovery was not expected for another 4-5 years.

According to the Mexican Secretariat of Foreign Relations, nearly 37,000 properties were purchased by foreigners in the restricted zone under a Fideicomiso between 2000 and 2008.   An estimated 5,200 properties were purchased in 2009, accounting for over 42,000 properties sold to foreigners in the restricted zone in the past ten years. While such statistics are one measure of the level of U.S. real estate activity in Mexico, these numbers do not tell the whole story. The exact number of real estate purchases by Americans is much harder to track since there is no limitation on Mexican corporations, even those wholly controlled by U.S. citizens, owning non-residential real estate in the “restricted zone” or even residential real estate in the interior of the country.

Transportation:

By all modes of transportation, U.S.-Mexico trade accounted for 16.2% and 12.8%, respectively, of the total U.S.-world trade in January 2012.

U.S.-Mexico surface transportation trade has now increased compared to January 2011 with U.S.-Mexico trade reaching $31.4 billion, a 14.3% increase.

The bilateral economic and trade relationship with Mexico is of interest to U.S. policymakers because of Mexico’s proximity to the United States, the high level of bilateral trade, and the strong cultural and economic ties that connect the two countries.

Also, it is of national interest for the United States to have a prosperous and democratic Mexico as a neighboring country.

These and other important trade policies and economic troubles by the USA, prove the dependency of Mexico’s Economy to the USA. 

Let’s also not forget that the USA’s economic stability also affects the rest of the world’s economic stability, not only Mexico’s.  As it was proven through the recent Global Financial Crisis, which started with the subprime mortgage induced financial crisis.  Lehman was the fourth-largest U.S. investment bank at the time of its collapse, with 25,000 employees worldwide. Lehman's collapse was a seminal event that greatly intensified the 2008 crisis and contributed to the erosion of close to $10 trillion in market capitalization from global equity markets in October 2008, the biggest monthly decline on record at the time.

These facts and the one presented by another popular saying; “Poor Mexico too far from God, and yet to close to the USA”.

Which I can interpret as the Mexican citizen’s reaction of resentment towards the way the annexation of Texas and the states of California, New Mexico, Arizona, and parts of Utah took place during the Mexico-USA war.  Which in reality was the result of the USA’s Ideology of the USA being the “beacon to the world”, or American exceptionalism Theory.  The Theory for freedom and democracy, or “manifest destiny” expansion, as carried by the U.S.of A, to the point where, even though Mexicans are surrounded by all sorts of companies and products of American manufacturing, follow all traditional USA sports (American football, Basketball and Baseball, to name a few), crave for American products and the American way of life, have a close relationship to the USA through our Mexican relatives living in the USA, as it is in many cases, some of us, Mexicans, still reject the fact of how much the United States of North America culture has an influence on Mexicans, and the Mexican economy as a whole.

This I have experienced first-hand in my constant interaction with my con-nationals, whenever I try to mention how things are done differently in the states, always getting the common response, “But this is Mexico”.  Which is an apparent effort many Mexicans to try to excuse the erroneous practices and attitudes we sometimes have towards our own culture and daily interaction with our own people in our country.  But that radically changes when it comes to foreigners we come into contact with.

And although that is a cultural issue, it is also a determinant factor in the way things get done in Mexico; politically and socially.

Therefore, we must come to understand that our co-dependency in the USA economy and cultural influence may not be such a bad thing, but on the contrary, learn to take advantage of our close relationship with the USA and despite our differences, take the best of their culture, and apply it to our best interest.  Primarily in the economic sectors.

The only way Mexico may decrease the present co-dependency to the American economy, is by becoming a 1^st world nation.  And that can only happen by continuing growth and following growth trends provided by 1^st world nation countries.

In May 2010, Mexican President Calderón made a state visit to the United States in which he emphasized the need for increased cooperation in North America to increase the competitiveness of the region. In a meeting hosted by President Obama, the two leaders reaffirmed their shared values and the need for focusing on economic growth. They vowed to enhance and reinforce efforts to create jobs, promote economic recovery and expansion, and encourage prosperity across all levels of society in both countries. President Obama underscored his commitment to comprehensive immigration reform in the United States while President Calderón stated that his administration was committed to creating more job and educational opportunities in Mexico.  The actual implementation of this mutual agreement might be a good first step.

Furthermore, the culture clash between Mexican Nationals and Mexicans residing in the USA must also be overcome.  For when that occurs, Mexico will have the best of both worlds.  A richer Mexican culture, and the basis for an economic upspring for its people.