Figure 1: Map of Mexican and other Trade Agreements Source: Adapted from http://www.wsj.com/articles/why-auto-makers-are-building-new-factories-inmexico-not-the-u-s-1426645802 Figure 2: Map of Mexican States Source: https://commons.wikimedia.org/wiki/File%3AMapa_pol%C3%ADtico_de_M%C3%A9xico_a_ color_(nombres_de_estados_y_capitales).png 13 https://azmex.eller.arizona.edu/az-trade/exports-nafta-markets 14 http://www.wired.com/2016/02/startups-can-escape-their-cash-crunch-by-going-to-mexico/ 23 • <strong>ARIZONA</strong> & <strong>MEXICO</strong> • <strong>ARIZONA</strong> TOWN HALL • APRIL 2016
Table 1: Mexican States and Population Rank State Population 2015 1 México 16,187,608 2 Distrito Federal 8,918,653 3 Veracruz 8,112,505 4 Jalisco 7,844,830 5 Puebla 6,168,883 6 Guanajuato 5,853,677 7 Chiapas 5,217,908 8 Nuevo León 5,119,504 9 Michoacán 4,584,471 10 Oaxaca 3,967,889 11 Chihuahua 3,556,574 12 Guerrero 3,533,251 13 Tamaulipas 3,441,698 14 Baja California 3,315,766 15 Sinaloa 2,966,321 16 Coahuila 2,954,915 Rank State Population 2015 17 Hidalgo 2,858,359 18 Sonora 2,850,330 19 San Luis Potosí 2,717,820 20 Tabasco 2,395,272 21 Yucatán 2,097,175 22 Querétero 2,038,372 23 Morelos 1,903,811 24 Durango 1,754,754 25 Zacatecas 1,579,209 26 Quintana Roo 1,501,562 27 Aguascalientes 1,312,544 28 Tlaxcala 1,272,847 29 Nayarit 1,181,050 30 Campeche 899,931 31 Baja California Sur 712,029 32 Colima 711,235 Increased trade between the United States and Mexico generates new business opportunities and creates wealth and jobs in both countries. For example, as nearshoring fuels Mexico’s manufacturing sector growth, opportunities are created for inputs and services suppliers in the United States and Arizona to capture new markets. Arizona’s manufacturing exports to NAFTA markets grew to $7.81 billion in 2015, accounting for an impressive 7.32% year-to-year increase from 2014 to 2015. 13 Still, Arizona is actually only capturing a very small share of the manufacturing export market. Arizona’s total exports to NAFTA markets as a share of all southern U.S. border states combined was 6.43% in 2015 (the vast majority of exports come from Texas at 69.0% 14 ). Arizona engagement with its traditional Sonora and Sinaloa trading partners can be expanded to other regions of Mexico – Baja California, Chihuahua, Jalisco and Nuevo León for example – where manufacturing has a larger presence. Of indirect benefit to Arizona, Mexican middle class growth creates increased demand for American consumer products -- both through export from the U.S., and in the case of Arizona, through increased retail sales to Mexican visitors. Another area of opportunity for Arizona is the emerging technology innovation sector in Mexico, which is further leveraging Arizona’s robust ecosystem for technology innovation and entrepreneurship -- resulting in joint venture and research collaboration development with emerging tech enterprises in Mexico. The forces of globalization and a commitment to free trade, coupled with the demographic transition in Mexico have enhanced Mexico’s global position for advanced manufacturing. Additionally, as Mexico’s production sector and higher education system evolve and its capacity for technology innovation grows, new opportunities arise for Arizona businesses to provide inputs and services to the global value chain cutting across the trans-border region. Arizona’s value proposition, from logistics, to research and development, to a strong ecosystem for innovation and entrepreneurship, make it an ideal partner for participating in shared growth opportunities with Mexico. Beyond a revived cyclical interest in Mexico, a sustained dialogue and targeted engagement are critical to capitalizing on these opportunities for both Arizona and Mexico. ABOUT THE AUTHORS Justin Dutram is the Director of Business Development for Tech Parks Arizona, The University of Arizona’s Research and Technology Parks. He holds a Master of Education in Bilingual and Multicultural Education from Northern Arizona University and a Bachelor of Science in Geography from New Mexico State University. Jennifer Columbus is an Associate in Program Development at the University of Arizona’s Office of Global Initiatives. She holds a Master of Fine Arts in Poetry from Goddard College, and a Bachelor of Arts in English from Michigan State University. APRIL 2016 • <strong>ARIZONA</strong> TOWN HALL • <strong>ARIZONA</strong> & <strong>MEXICO</strong> • 24
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