The Tucson Metropolitan Chamber of Commerce invited me to present this slideshow in its Board Meeting in June 2008.

1. MEXICO : an Opportunity for Trade and Investment for Arizona Business People Bernardo Mendez, Deputy Consul of Mexico Planning Session for TMCC Board Retreat Tucson, Arizona, June 23th 2008

2. NAFTA Benefits Arizona Source: Daniel T. Griswold, associate director of the Center for Trade Policy Studies at the Cato Institute. www.cato.org -In the past 14 years, the people of Arizona have experienced first-hand the benefits of free trade with Mexico. Since enactment of NAFTA in 1994, trade, jobs, and income in Arizona have all been heading north. -Opponents of the freedom to trade have tried to blame NAFTA for a host of problems, real and imagined. But the agreement has been a great success for Arizona, the United States, and neighboring Mexico. -Opponents of NAFTA warned of a "giant sucking sound" of jobs and investment heading south if the agreement were enacted, but all the evidence points the other way. Since 1994, Arizona's exports to Mexico and Canada have doubled, including more than $1.5 billion in computer and software exports to Mexico in 2001 alone.

3. Arizona's farm exports to Mexico have also soared. -Claims that NAFTA has destroyed jobs in Arizona do not stand the laugh test. Since NAFTA was enacted in 1994, Arizona has added a net 700,000 new jobs and real wages have risen. -The state's unemployment rate today is lower than it was before NAFTA. About 25,000 mostly well-paying jobs in Arizona are directly tied to exports to Mexico and Canada, and thousands more jobs in transportation, banking, and finance are indirectly connected. -NAFTA has stimulated the of tourism in the Southwest and created investment opportunities for small and medium-sized Arizona companies to reach new markets. Mexican visitors spend more than one billion dollars every year in Arizona since 2000 and numbers are growing . -Between 2000 and 2007 the Arizona yearly economic growth was 4.1%, second in the Nation, only Nevada grew more with 4.8% in the same period. -Only construction activity had lower growth in AZ: -16.9% in 2007. “

4. Mexico’s Evolution: Source for 2007: CIA Country Study Gdp Gdp per capita Inflation Interest Rate Exports Imports Trade balance Public deficit 1987 200 1900 159 120 28 19 7.2 16.1 Billions of US dollars % of Gdp US dollars Annual % Annual % Billions of US dollars Billions of US dollars Billions of US dollars 2007 893 12800 4 9.2 271 283 -7.4 0.2

6. El Salvador Costa Rica Nicaragua Honduras Guatemala Israel Canadá United States South Korea Chile Argentina Bolivia Venezuela Colombia Portugal Netherlands Switzerland Austria Spain France Italy Greece Germany Belgium Luxembourg Finland Denmark Ireland United Kingdom Sweeden Norway Iceland Liechtenstein Mexico’s network of FTAs is one of the largest in the world Brazil Cuba Czech Rep. Australia Peru Mercosur Uruguay Japan 20 BITs 12 FTAs 6 CEAs

7. Mexico’s network of FTAs is one of the largest in the world

8. As a result of its 12 free trade agreements with 42 countries, Mexico is by far, the leading exporter of the Latin American region. The eight exporter in the world and the second largest partner of the United States. Exports of Mexico account for almost twice the total exports of Brazil and Argentina and almost equal to all Latin America. Mexico is the 10 th economy in the world. In terms of Sq. Miles is the 14 th (equals to France, Spain, Germany, Italy and UK all together)

10. ...its second largest market for US exports... Source: Ministry of Economy with data from USDOC Billions of US dollars

13. Accumulated FDI 1994 – 2005 202 billions of US dollars NAFTA Open Trade Policies have also boosted investment flows into Mexico... Source: Ministry of Economy

20. Clearly distinguish 3 clusters in Mexico CAR INDUSTRY: GEOGRAPHIC LOCATION, FORD HAS INCREASED INVESTMENTS IN SONORA (2008) COAHUILA D.F. QRO. HERMOSILLO FORD (PC) SALTILLO CHRYSLER (ENGINES & UV) AGS. NISSAN (PC & ENGINES) GTO. G.M. (UV) SANTIAGO M.BENZ (PC & UV) SILAO AGS. V.W. (PC & ENGINES) PUEBLA HONDA (PC) GUADALAJARA SONORA CHIHUAHUA G. PALACIO LINAMAR (ENGINES) MO R . NISSAN (PC & UV) CIVAC BAJA CALIFORNIA NORTE BAJA CALIFORNIA SUR SINALOA DURANGO NAYARIT ZACATECAS S.L.P. TAMPS. VERACRUZ COLIMA MICHOACAN GUERRERO OAXACA CHIAPAS TABASCO CAMPECHE YUCATAN QUINTANA ROO HIDALGO TLAX. MEX. PUEBLA NUEVO LEON RAMOS ARIZPE G.M. (PC & UV) TOLUCA G.M. (ENGINES) TOLUCA CHRYSLER (PC & UV) TOLUCA BMW (PC) CUAUTITLAN FORD (PC & UV) CHIHUAHUA GARCIA TULTITLAN MASA (TRUCKS) TOLUCA VOLVO (TRUCKS) KENWORTH (TRUCKS) MEXICALI S.L.P. SCANIA (TRUCKS) NAVISTAR (TRUCKS) JALISCO TIJUANA TOYOTA (PICK-UP BOXES OF TRUCKS)

21. THE ELECTRONIC INDUSTRY: EXPORTS Electronics & Home appliances : Our currently trade with U.S. is more than 87 billion dollars Industrial, Electro medical and Comercial (%) Computers (%) Parts and components (%) Telecommunications (%) Audio ,video ( including CD and DVD's) (%) Millions of dollars 2002-2004 39,871 38,608 42,628 33.6% 33.9% 31.7% 21.2% 23.0% 25.5% 7.4% 9.0% 10.4% 10.8% 10.3% 10.5% 23.8% 27.1% 21.9% 0 10 20 30 40 50 2002 2003 2004*

22. Electronic Industry location ……(700 + companies) growing now in Nogales, Hermosillo and Culiacan Querétaro  VISTAR  VITROMATIC (2) Cuernavaca  NEC Torreón  THOMSON Monterrey  PIONNER  DANFOSS COMPRESSORS  VITROMATIC (3)  MABE (2)  KODAK  NIPPON DENSO (Automotriz)  AXA YAZAKI (Automotriz) Mexicali  SONY  DAEWOO (SLRC)  MITSUBISHI  GOLDSTAR Aguascalientes  WHITE  WESTINGHOUSE  MEX*  TEXAS INTS.  XEROX  SIEMENS Querétaro  CLARION  DAEWOO  BLACK & DECKER  MABE (2)  SINGER  SIEMENS Estado de M e xico  MABE  BRAUN  ELECTROLUX  SUNBEAM  KOBLENZ  ERICSSON  ALCATEL/INDETEL  AMP Puebla  GESTAR  SINGER  VITROMATIC Saltillo  MABE  HAMILTON BEACH* Reynosa  VITROMATIC  NOKIA  DELCO (Automotriz)  PHILIPS  SONY  MATSUSHITA (Automotriz)  LUCENT TECHNOLOGIES  FUJITSU (Automotriz)  CONDURA (Automotriz)  DELNOSA (Automotriz) San Luis Potosí MABE GE  MABE SANYO  Chihuahua  MOTOROLA  ALTEL  KIOCERA  JABIL Juárez  KENWOOD  ELECTROLUX  ACER  TOSHIBA  PHILIPS  THOMSON  ELAMEX  PLEXUS Tijuana  SANYO  SONY  HITACHI  MATSUSHITA  JVC  SAMSUNG  PIONNER  SANYO ELECTRODOMÉSTICOS  PHILIPS  CASIO  KODAK  CANON  KIOCERA  INTERNACIONAL RECTIFIER  MITSUBISHI  SHARP Guadalajara  I.B.M  H.P.  NEC LUCENT TECHNOLOGIES   MOTOROLA  KODAK  CUMEX  SIEMENS  SOLECTRON DE MEXICO  FLEXTRONICS  JABIL CIRCUIT  MTI ELECTRONICS  SCI SANMINA Estado de M é xico  ELECTROLUX  FILTER QUEEN  HOOVER  IMAN  KOBLENZ  MABE  PHILIPS  SUNBEAM  OLIVETTI  PANASONIC  OLIMPIA  AUDIO Y VIDEO  ELECTRODOMESTICOS  EQUIPO DE COMPUTO  TELECOMUNICACIONES  OTROS

24. Mexico: a World of Economic Opportunity: Hermosillo and Culiacan, two logical destinations for Arizona Investors Tijuana Population: 750,000 Key Industries: beverages, processed foods, metalworking, radio and television manufacture, electrical machinery Hermosillo Population: 8 00,000 Key Industries: automotive, meat, cement and derivatives, electrical machinery Culiacán Population: 8 00,000 Key Industries: food processing, cereal milling, sugar, beverages, edible oils and fats Aguascalientes Population: 500,000 Key Industries: electronics, automotive, dairy, textiles, carpets León Population: 1 million Key Industries: refining, footwear, leather and tanning, bakery goods, beverages Guadalajara Population: 4 million Key Industries: high-technology, edible oils and fats, plastic products, chemicals, dairy products, processed foods, textiles, footwear Mexico City Population: 20 million Key Industries: retail, financial services, food, automotive, plastic products, paper and cellulose, chemical derivatives, basic chemicals Puebla Population: 1.5 million Key Industries: automotive, textiles, iron and steel, bottled water, chemicals, meat processing Veracruz Population: 450,000 Key Industries: petrochemicals, refining, basic chemicals, iron and steel, sugar, beef, processed foods, tourism, transportation services (maritime) Ciudad Juárez Population: 800,000 Key Industries: electrical machinery, transport equipment, meat, electronics, dairy products Mérida Population: 600,000 Key Industries: beverages, edible oils and fats, processed foods, cement and derivatives, plastic products Chihuahua Population: 650,000 Key Industries: electrical machinery, automotive, meat, electronics, dairy products, timber Torreón Population: 880,000 Key Industries: automotive, bricks, clay, refractory, general machinery, cement and derivatives Toluca Population: 850,000 Key Industries: automotive, plastics, paper and cellulose, chemical derivatives, basic chemicals Monterrey Population: 3 million Key Industries: oil refining, iron and steel, electrical machinery, glass and derivatives, breweries, meat products, cement, banking San Luis Potosí Population: 670,000 Key Industries: iron and steel, non-ferrous metallurgy, tobacco products, electrical machinery, automotive, livestock Querétaro Population: 460,000 Key Industries: automotive, paper and cellulose, synthetic fibers, general machinery, electrical machinery, processed foods, dairy products Tampico-Madero-Altamira Population: 340,000 Key Industries: chemical, industrial machinery, electronic & electrical equipment, oil and refinery, agriculture, cattle, fishing Source: SE-NAFTA.

29. Thank you and thanks to John Brown! Remember: Arizona exported globally to 202 foreign destinations in 2007. The state's largest market was NAFTA member Mexico. Arizona posted exports of $5.2 billion to Mexico, over one-quarter (27 percent) of the state's total export shipments in 2007 . Bernardo Mendez Deputy Consul Consulate of Mexico in Tucson, Az 553 South Stone Ave Tucson, Az 85701 Tel. 520-882-5595 ext. 115 [email_address] [email_address]