Economic Ties Between Texas and Mexico Luis Bernardo Torres Ruiz, Ph.D. February 6, 2015 Research...
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Transcript of Economic Ties Between Texas and Mexico Luis Bernardo Torres Ruiz, Ph.D. February 6, 2015 Research...
Economic Ties Between Texas and Mexico
Luis Bernardo Torres Ruiz, Ph.D. February 6, 2015 Research Economist International Forum TAR
Contents1. Economic Integration
2. Residential Impact
3. Concluding Remarks
Mexico is the largest export market for TexasTexas Exports by Destination
(Billion $)
Source: Foreign Trade Division, U.S. Census Bureau
(%) of Total Exports Average 2000-2014Q3— Mexico 37.8— Canada 10.1— China 3.7— Netherlands 2.8— Brazil 2.7
Exporting manufactured goods to MexicoTexas Exports to Mexico by Product
(Billion $)
Source: Foreign Trade Division, U.S. Census Bureau
Texas exporting manufactured goods directly and indirectly support jobs in the state
Jobs Supported by Manufactured Exports by State(Thousands)
Source: International Trade Administration, U. Department of Commerce
Product Sharing: U.S. (Texas) and Mexican factories work together to manufacture a good
Value of US Content in Imports from Selected Economies
Country
%
Mexico 40
Canada 25
Malaysia 8
Korea 5
China 4
Brazil 3
European Union 2
Japan 2
India 2
Source: Robert Koopman, William Powers, Zhi Wang and Shang-Jin Wei, “Give Credit Where Credit is Du: Tracking Value Added in Global Production Chains, National Bureau of Economic Research, Working Paper No.16426, March 2011, page 38.
Creating jobs in the Texas border cities when output increases in Mexican maquiladora industry
10% increase in maquiladora output leads to an increase in employment in the adjacent Texas city
City
%
El Paso 3.0
Laredo 3.6
Brownsville 1.9
McAllen 5.9
Source: J. Cañas, R. Coronado, R. Gilmer, E. Saucedo. “The Impact of Maquiladoras on U.S. Border Cities”,Federal Reserve Bank of Dallas, working paper, 2011.
Flow of goods and services create jobs in services, like transportation and warehousing
U.S.-Mexico Trade by Top 10 Land Ports in 2013
City Rank
Total Trade (Billions $)
Share of Total(%)
1. Laredo, TX 168.8 43.1 2. El Paso, TX 66.9 17.1 3. Otay Mesa-San Ysidro, CA 34.8 8.9 4.Hidalgo, TX 26.8 6.9 5.Nogales, AZ 23.5 6.0 6.Eagle Pass, TX 21.7 5.5 7.Santa Teresa, NM 19.9 5.1 8.Bronsville-Cameron, TX 15.4 4.0 9. Calexico, CA 7.3 1.9 10.Del Rio, TX 4.1 1.1 11.Other 2.9 0.7Source: Texas Center for Border Economic and Enterprise Development, Texas A&M International University
Mexican investment supports U.S. (Texas) jobs, with an annual compensation to employees around $65,465*
Mexican Foreign Companies with Operations in Texas
Company
City
Axis Pipe and Tube, Inc. (Prolamsa) Bryan
Bimbo Bakeries USA Inc.(Grupo Bimbo) El Paso, Fort Worth, Rockwall
Bio-PAPPEL International El Paso, Rio Grande City
Borden Milk Products LLC(Grupo Industrial Lala) Austin, Dallas
Cemex Cement(CEMEX) El Paso, Houston, New Braunfels, Odessa
Elamex USA Corp(ACCEL Group) El Paso
Metalsa Light Truck Inc.(Grupo Proeza) San Antonio
Mission Foods Inc.(Gruma) Irving, San Antonio
* Bureau of Economic AnalysisSource: Office of the Governor The State of Texas
Contents1.Economic Integration
2. Residential Impact
3. Concluding Remarks
Approximately 65 percent of buyers from Mexico purchased properties in Texas
Mexican Home Purchases by State(%)
Source: National Association of Realtors. 2014 Profile of International Home Buying Activity
Sales price of Mexican purchases are below all other categories, while the peso/dollar exchange rate had a negative effect in 2014
Median Sales Price($)
Source: National Association of Realtors, 2014 Profile of International Home Buying Activity and Real Estate Center at Texas A&M University
Average Sales Price ($)
Source: National Association of Realtors, 2014 Profile of International Home Buying Activity and Real Estate Center at Texas A&M University
Of the markets of greatest interest for Mexican buyers, four are in Texas: El Paso, Houston, Laredo and San Antonio
Financing by Mexican Purchase(%)
Source: National Association of Realtors. 2014 Profile of International Home Buying Activity
Type of Purchase(%)
s.a./ Seasonally adjusted. Source: Real Estate Center at Texas A&M University.
Contents1.Economic Integration
2. Residential Impact
3. Concluding Remarks
Concluding Remarks The Texas and Mexican economy are highly integrated The state’s relationship with Mexico is of complementary, not
economic rivals Texas and Mexico trade occurs in the context of production
sharing (vertical integration) Texas border is especially integrated with Mexico In addition to trade, Mexicans have significant important foreign
investment in Texas Mexican economic growth has a positive impact for the Texas
economy Possible further long-run integration can be boosted by the
recent energy reform in Mexico and immigration reform (aging labor force in the U.S.)
www.recenter.tamu.edu