February  28, 2017

Keeping you up-to-date on the North American news and studies of today, helping you explore new opportunities for North American competitiveness. Please send us articles that may be of similar interest to your NASCO Network!  
Billionaire Wilbur Ross is sworn-in as Commerce Secretary. The U.S. Senate voted 72-27 on Monday evening to confirm Ross as President Donald Trump's Commerce Secretary.
Billionaire Wilbur Ross is sworn-in as Commerce Secretary. The U.S. Senate voted 72-27 on Monday evening to confirm Ross as President Donald Trump's Commerce Secretary.
The Latest: Ross sworn in as Commerce Secretary 
President Donald Trump has a Commerce secretary.
Vice President Mike Pence has administered the oath of office to Wilbur Ross on Tuesday, a day after the Senate voted 72-27 to confirm him.
Ross will help promote American business interests in the U.S. and abroad. He'll also oversee agencies that manage fisheries, weather forecasting and the Census Bureau, which will conduct the next national headcount in 2020.
Ross has said the administration will work quickly to renegotiate the North American Free Trade Agreement with Canada and Mexico.

The 79-year-old Ross is worth an estimated $2.9 billion and has extensive business ties around the world. He has promised not to take any action as secretary that would benefit any company in which he has a financial interest.

Read more.

NAFTA under Trump-the myths and the possibilities
From Ross Perot's 1992 claim that the North American Free Trade Agreement would generate a "great sucking sound" as jobs moved from the U.S. to Mexico to President Donald Trump's claim that the agreement is a job killer, it has been good politics to blame trade with Mexico (and more recently with China) on job losses, particularly in the manufacturing sector.

This might look like a fulfilled prophecy given that the increasing trade deficit of the U.S. between 2000-2010 coincided with the loss of close to 6 million manufacturing jobs (yet, since 2010 the manufacturing sector has added over 800,000 new jobs). But the truth is that all advanced economies have been steadily reducing the share of employment in manufacturing, regardless of trade deficits or surpluses.

So how much of the job losses from trade can be attributed to NAFTA, and in particular to Mexico? While it is difficult to assess, it is estimated that U.S. trade with Mexico led to little over 100,000 manufacturing net job losses-equivalent to about 0.1 percent of the U.S. labor force.

Read more.
Ricardo Anaya - The George Washington University 
The new challenges for the bilateral relationship between Mexico and the United States 
Ricardo Anaya explains the new challenges for the bilateral relationship between Mexico and the United States. 
U.S. Secretary of State Rex Tillerson and Mexico's Foreign Minister Luis Videgaray shake hands after a joint news conference at the foreign ministry in Mexico City, Mexico February 23, 2017.
Statements to the Press
Rex W. Tillerson
Secretary of State
Secretary of Homeland Security John Kelly, Mexican Foreign Secretary Luis Videgaray Caso, and Mexican Government Secretary Miguel Angel Osorio Chong 
Foreign Ministry 
Mexico City, Mexico 
February 23, 2017
SECRETARY TILLERSON: "Although our two nations share a long history, our visit was forward-looking, focusing on common interests that would advance security and economic well-being.
In our meetings, we jointly acknowledged that in a relationship filled with vibrant colors, two strong, sovereign countries from time to time will have differences. We listened closely and carefully to each other as we respectfully and patiently raised our respective concerns. Our conversations covered the full range of bilateral issues. We reaffirmed our close cooperation on economic and commercial issues such as energy, legal migration, security, educational exchanges, and people-to-people ties. We agreed that our two countries should seize the opportunity to modernize and strengthen our trade and energy relationship... 
There's no mistaking that the rule of law matters along both sides of our border. We recognize the existing U.S.-Mexican cooperation to curtail irregular migration, both by securing Mexico's southern border and by supporting efforts of Guatemala, Honduras, and El Salvador through the Alliance for Prosperity to reduce violence and stimulate economic opportunity in the region. On this issue, we discussed the importance of fair treatment of all of those in this transit.
Finally, we universally agreed on the importance of strengthening existing institutional mechanisms. The meetings were the continuation of a purposeful and productive exchange that is setting our two countries down a pathway to greater security and long-term prosperity. And we look forward to further meetings - perhaps in Washington, D.C. - to continue to progress our important discussions on these issues. Both Secretary Kelly and I look forward to and are honored with - by the opportunity to meet with President Pena Nieto"

Read more.
  The Rivard Report; Three-part series


Part I: Distant Neighbors Again?  
The United States and Mexican flags stand side by side at the Mexican Consulate of San Antonio.

"Distant neighbors" - That's how Alan Riding, then-New York Times bureau chief in Mexico, labeled the relationship between the United States and Mexico 32 years ago. While not yet strategic partners, the binational levels of interdependence and cooperation achieved since then have been unprecedented in the history of both countries. We have come a long way - or so we thought until recently. Read more.

Part II: Beyond NAFTA: Building North America Together

A massive level of economic activity is taking place with a country right next door, 17.5 times smaller than the U.S. in nominal economic terms. Mexico purchased $236 billion dollars of U.S. goods in 2015, plus an additional $31 billion in services. We export twice as much to Mexico than to China, and yet our deficit with Mexico is more than six times smaller than our deficit with China.

Our deficit with Mexico is the equivalent of 3/10 of 1% of U.S. GDP, an amount that hardly qualifies as a "catastrophe," as stressed by President Donald Trump. On top of this, close to 40% of the products we import from Mexico is U.S. content. Mexico incorporates an estimated 9.5 times more American components in relative terms than China in its exports to the U.S., and 1.6 times more than Canada. A visit to the Toyota plant in San Antonio will give the reader a good tasting of this. Read more. 

NAFTA Initialing Ceremony, October 1992. From left, standing Mexican President Carlos Salinas de Gortari, U.S. President George H. W. Bush, Canadian Prime Minister Brian Mulroney., seated Mexican Secretary of Commerce and Industrial Development Jaime Serra Puche, U.S. Trade Representative Carla Hills, Canadian Minister of International Trade Michael Wilson.

Part III: Our Demographic Tsunami is a New Reality 

Children wave American flags as they are granted citizenship during a naturalization ceremony in January 2016.
Every country has the sovereign right and duty to protect its borders and enforce its immigration laws and interests. The United States, arguably the most welcoming nation for immigrants at our scale in history, has almost four times as many foreign-born residents as the next country on the list today. To give an example: relative to total population, the U.S. has 16 times as many foreign-born residents as Mexico and 42 times as many in absolute numbers.

Controlling our borders is a must. That does not mean that a full-length wall makes sense, especially with an elusive budget in the billions. Beyond geopolitical, environmental, and humanitarian considerations - from a merely pragmatic standpoint - the cost-effectiveness of such a huge investment is in serious question. Read more.

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