US-Mexican business relations tested by Trump presidency

Comments by President Donald Trump on the campaign trail and during the first days of his presidency have tested the diplomatic relationship between U.S. and Mexico as Trump promises to build a wall between the two countries.

Amy Glover, director of the Mexico Practice at global market consulting firm McLarty Associates, says the strongest ties between the U.S. and Mexico remain its economic and cultural ones.

“Mexico has been a great ally to the U.S. in many ways, both economically and in terms of security,” Glover said. For example, “several terrorist attempts have been thwarted precisely because of Mexican intelligence,” a fact that few Americans know, she said.

Mexico also understand that the illegal drugs are a joint problem for both itself and America.

“Issues related to the drug trade are very complex because they’re also related to demand for drugs in the United States,” said Glover.

For companies doing business in Mexico, this is a critical moment.

“A lot of education has to be done about the critical importance of our neighbors and how they help us, as Americans, be a competitive region,” Glover told What’s Working in Washington.

Under NAFTA, Mexico and Canada are our partners economically, and this agreement is relied on by 14 million U.S. jobs, she added.

“Mexico is the second-most important market for U.S. exports. So we have a lot at stake here,” said Glover. “North America — the three countries — we are the most competitive region in the world.”

Despite claims that U.S. manufacturing jobs are moving to Mexico where it’s cheaper to operate, the reality is much different. “From 2000 to 2010, 87% percent of the manufacturing job losses [in the U.S.] were due to productivity increases, only 13% percent to trade,” Glover said. The vast majority of the jobs were not moving, but rather being replaced by robots.

The advantages of the free trade allowed by agreements like the EU and NAFTA have been obscured recently by politics, said Glover.

“A lot of people feel that they haven’t been included in globalization. But to solve that, what we need to do is not protectionism, but rather help by providing training, education, health, to those populations that feel that they haven’t been a productive part of this new economy,” she said.

Glover believes that D.C. has the ability to become a strong part of this new economy through exports. “You really have to research, understand your market, understand the dynamics of that market,” she said.

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