President Donald Trump has waged a war of words against Mexico for a year and a half. His campaign rhetoric and provocations have escalated into executive orders that include taxing Mexican imports in order to construct a wall. As a CEO, President Trump should know that a whisper from the top sounds like a shout — this time, it could result in grave consequences for Americans.
Our relationship with Mexico doesn’t have to collapse, though America seems to have forgotten the importance of this partnership. Economic anxiety and border-security fears are no reason to forget our belief in equality and every person’s right to pursue happiness. If we turn our back on our core principles, we risk losing what makes us great.
A good friend calls you out when you start to lose your way. Even as Mexico pushes back by threatening to enact tariffs against American corn imports, here is what Trump must learn about Mexico.
The Upside of NAFTA
The US Chamber of Commerce estimates that 6 million jobs in the United States depend on trade with Mexico alone.
“A lot of jobs were created in the U.S. that wouldn’t be there without the Mexico trade,” Mauro Guillen, a University of Pennsylvania management professor, told Knowledge at Wharton. Unquestionably, freer trade has led to some manufacturing jobs relocating southward, particularly away from areas like Pennsylvania and Ohio. But automation and robotics have aggravated this trend arguably as much.
Constructive collaboration led to production improvements in fields from aerospace to electronics to auto-making. Many products are no longer built in a single country. Components from Canada, Mexico, and the United States cross the border several times and include helpful contributions from multiple nations. The benefit of free trade within North America creates jobs, lowers production costs, generates more supplier options and makes goods cheaper for consumers.
NAFTA has done far more than incentivize factories to move to Mexico, it has helped to integrate two of the three largest economies in the hemisphere. In the modern global economy, they have a much brighter future as friends than as foes.
The STEM Graduation Boom
Condemning NAFTA also ignores the vast potential of two nations with a combined 440 million people who are skilled and eager to work. Nowhere is this more glaring than in our most innovative fields. While the United States continues to face a shortfall of engineers and science-minded professionals, Mexico is now producing more STEM graduates than ever.
With 114,000 college graduates each year in the engineering, manufacturing, and construction realm, the World Economic Forum ranks Mexico eighth in the world. Mexico is sixth among OECD nations for computing graduates.
Mexico’s youth are gravitating towards technology like never before and the U.S. economy can immensely benefit from their abilities. Mexico is cultivating a workforce of programmers, developers, and engineering superstars who bring innovation and add value to U.S. enterprises from M.I.T. to Silicon Valley.
This is proven by the booming startup scene in Jalisco, where the local tech sector is worth $21 billion. Add in the $1.5 billion that venture capitalists invested into Mexican startups last year alone, and there’s obvious promise to continue growing the entrepreneurial spirit.
Mexico is a populous nation full of talent. White House policy should focus on fostering ways that the tech sectors in both nations can work together to keep revolutionizing society. Casting Mexico aside now means that shutting the door on millions of young and talented professionals.
The Tireless Mexican Work Ethic
Nobody in the world works more than Mexicans. With an average of 2,228 hours worked per person in 2014 — or 42.8 hours per week — Mexico beat out every other member nation of the Organization for Economic Co-operation and Development (OECD). Combined with a renewed focus on worker productivity, Mexico stands to make huge economic gains in the coming years.
Workers in the United States, by contrast, put in 1,789 hours, or 34.4 hours each week. While that still puts U.S. employees ahead of their counterparts in Canada (32.8) and the United Kingdom (32.3), it is only a half-hour more than the OECD average of 33.9.
The Mexican Dream is the same as the American Dream. People will log long hours to provide for their families, just like their northern neighbors. Just like us, most Mexicans want only to see their children receive a good education and have access to better opportunities than the previous generation.
The Glass (Half) Full of Optimism
The New Economics Foundation’s 2016 Happy Planet Index ranked Mexico as the second happiest country on Earth. When asked, on a scale of 0 to 10, where they stand on the “ladder of life,” the average response was 7.3. Similar data also comes from the Pew Research Center. In 2014, Mexico ranked first with 79% of people saying their present life was at 7 or higher. In the United States, where per-capita GDP is more than three times higher, only 65% of citizens felt that way.
This isn’t a nation of people yearning to abandon their home to take advantage of U.S. riches. Immigration northward has declined in recent years, as more Mexicans have found economic fulfillment. And their positive, hopeful outlook is something sorely missing in American politics today.
In fact, according to Pew Research, net immigration from Mexico is now a negative number. From 2009 to 2014, more people relocated from the United States to Mexico than the number who have moved northward. The overall population is down as well. In 2007, some 12.8 million Mexican immigrants lived in the United States. By 2014, that number was down to 11.7 million.
Optimism has been essential to the United States achieving great success in all walks of life. Many believe this is an exceptionally American trait. They aren’t wrong, but they need to expand their thinking — it is a North American sentiment.
The North American Opportunity
Together, the United States, Mexico, and Canada represent nearly a third of global GDP. Moreover, Mexico is a large, young and growing market — 45% of its 123 million people are under 25. As a businessman, President Trump should recognize that opportunities for growth continue to expand when we work together. My hope is that Trump and his advisors don’t turn their back on the huge North American opportunity.
The irony is that Trump has the opportunity to learn a lot from Mexico. Rather than focusing on protectionism and posturing, the Mexican government has aggressively promoted market competition by opening up its energy sector, among other reforms. It has nurtured the conditions necessary for investment and homegrown job creation for high-skilled workers. Most important of all, Mexico has prioritized investment in education, health and bilingualism.
North America is full of promise and ongoing collaboration can push us to new heights. It will take reasoned, informed leadership and a desire to work together to achieve these results. Hopefully, for all of us who want to see this future realized, that remains possible.