economics and trade...
molly
how to spur more and better trade with Mexico. The main point seems
to be, forget about relations in the border state of Sonora and go to
Mexico City and Monterrey where the real money is... The piece from
El Paso focuses on the upper and middle-class Meicans who can get
investors' and tourist visas to come to the US and live in El Paso and
thus escape the violence... The comments on the El Paso article are
instructive, especially this one:
"Oh my God, rich people are invading our country and giving us
jobs!"
Perhaps the Arizonans who are enduring a severe economic collapse
could figure out a way to inspire a similar exodus from Sonora in
which the rich people along that border will stream into Tucson and
Phoenix and buy up all the depressed real estate. That would get the
Arizona economy moving I believe, as real estate is a very important
part of that state's economy.
I would also draw attention to another commenter in the EPTimes:
"I do not believe these people improve the quality of life for El
Pasoans. The don't pay federal, property or state taxes yet the drive
on on streets, use public facilities and the abuse their visitor
visas..."
So, I am curious how this El Pasoan thinks these folks buy houses and
businesses in El Paso without paying property taxes, or how they shop
in malls and stores here without paying sales taxes? The sad fact is
that these folks probably managed to avoid paying taxes in Mexico for
generations and thus starved legitimate government services (education
for instance) there. Why should the rich pay for schools for the poor
in Mexico? Of course, now they find that the costs of paying
extortion, protection money and other kinds of "taxes" in the current
crime-based economy in Juarez, make it a better deal for them to leave
and pay taxes in the US. And of course, as even President Calderon
seemed to realize in his recent visits to the border, social
investment is the only way to even begin to rebuild Juarez society.
The statistic often cited in the papers in Juarez and nationally is
that 40-60 percent of teenagers neither work, nor go to school. They
are left with crime as their only way to survive economically. molly
http://www.azcentral.com/arizonarepublic/news/articles/2010/02/26/20100226az2020-mexico.html
February 28, 2010 |
News
Mexico holds potential for rebuilding Arizona economy
by Chris Hawley, Dennis Wagner and Sergio Solache - Feb. 26, 2010
09:33 PM
The Arizona Republic
MEXICO CITY - Arizona borders a country that is the world's 13th-
biggest economy. But sometimes you'd never know it because of the
missed opportunities.
Eighty percent of Arizona's trade in Mexico is with only one of its 31
states, Sonora. Few Mexican companies have set up offices in Arizona,
and Arizona businesses are so apathetic about selling in Mexico that
the state Commerce Department couldn't get a single one to go on a
recent trade mission to Mexico City. Tourism by Mexicans, meanwhile,
has been mostly flat for the last decade as the state fails to draw
many of the nation's wealthier visitors.
The North American neighbors, it sometimes seems, hardly know each
other.
"There's just not much knowledge of Arizona in our country," said
Sergio Garcilaso, an international business professor at Panamerican
University in Mexico City. "You think about Arizona and you think of
the desert. What can the desert offer us?"
It's a fair question. And as Arizona tries to retool its economy for
the next decade, experts say the state must become much smarter about
doing business with Mexico.
That means focusing attention beyond border cities such as Nogales and
selling Arizona harder in places such as Mexico City and Monterrey,
where the deals are struck and the money is made. It means going after
Mexican tourists instead of taking them for granted. It means luring
Mexico's best and brightest to Arizona universities to raise the
state's profile among that nation's future economic leaders. And it
means getting behind immigration reform, once and for all.
Perhaps most importantly, regular Arizonans need to change their
attitudes toward Mexico, said Erik Lee, associate director of the
North American Center for Transborder Studies at Arizona State
University. Instead of looking at Mexico as a source of drugs and
illegal immigrants, Arizonans should embrace their neighbor as a
source of economic opportunity and investment, he said.
"We tend to view Mexico as a poor country, but it's not," Lee said.
"Mexico is a middle-income country, and we tend to get outcompeted
(for Mexican investment) by California and Silicon Valley and Texas.
"You don't want to be California's truck stop."
Beyond Sonora
When former Gov. Janet Napolitano went on a rare trip to Mexico City
in February 2007, she boasted that she was the first border governor
to meet with the new Mexican president, Felipe Calderón.
That was true. Sort of.
The governors of Texas, California and New Mexico had all beaten
Napolitano by months, traveling to the Mexican capital to meet with
Calderón back when he was still a candidate or before he was sworn in.
California Gov. Arnold Schwarzenegger even attended his inauguration.
The gaffe was typical of Arizona, which often has trouble seeing
beyond its immediate border.
For years, Arizona has tied its economic development with Mexico to
that of neighboring Sonora, a sparsely populated state that accounts
for only 2.3 percent of Mexico's 103 million people and 2.6 percent of
its gross domestic product.
If Arizona can help Sonora attract industry, the thinking has gone,
some Arizona companies may benefit by providing consulting,
engineering, equipment, or shipping services, said Vera Pavlakovich-
Kochi, a University of Arizona economist who has studied the
relationship. Furthermore, some Sonorans will share the wealth by
shopping in Arizona.
Arizona officials say the strategy must be working; Arizona exported
$5.9 billion in goods and services to Mexico in 2008, the most recent
annual figures available. However, much of that was parts that are
assembled in Mexico and then sold back to the United States as
finished products, so it's hard to know how much of that money
Arizonans gave back, Pavlakovich-Kochi said.
And while those exports accounted for 2.4 percent of Arizona's
economic output, Texas' exports to Mexico accounted for 5 percent of
its output.
To increase its exports, Arizona needs to broaden its focus to other
parts of Mexico, especially the Mexican capital, Garcilaso said.
Of the 24 U.S. states with economic development offices in Mexico,
only Arizona, Idaho and Kentucky do not have offices in Mexico City, a
metropolis of 20 million people and the country's business hub. Since
taking office in January, Gov. Jan Brewer has not traveled in Mexico
beyond Sonora.
It's not just state officials who have trouble seeing beyond the
border.
Small and medium-size Arizona companies have shown a stubborn lack of
interest in selling in Mexico, said Fernando Jiménez, international
trade director at the Arizona Department of Commerce.
After years of struggling to find companies to attend its twice-yearly
trade tours to Mexico City and Guadalajara, the Commerce Department
finally stopped doing them last year, Jiménez said. Of the more than
110,000 employers in Arizona, only one signed up for the last trip to
Guadalajara. None wanted to go on the trip to Mexico City.
The lack of interest by companies is the main reason Arizona doesn't
maintain an office in the capital, Jiménez said. He said the economic
slump has made companies wary of taking risks in new markets.
The tenuous business relationship
between Arizona and Mexico is costly in other ways.
In the last decade, many Mexican conglomerates have chosen Texas or
California instead of Arizona for their first inroads into the United
States.
Mexican bank Banorte opened a U.S. division based in McAllen, Texas,
in 2006. Azteca Milling, a branch of Mexican food conglomerate Grupo
Maseca, is based in Irving, Texas, and is expanding its Madera,
Calif., plant.
Grupo Bimbo, the baked-goods giant that makes Entenmann's pastries and
Thomas' English muffins, has five of its 34 U.S. bakeries in Texas,
three in California - and none in Arizona.
Arizona's main prize, meanwhile, has been La Costeña, a Mexican maker
of soups and sauces that opened its U.S. headquarters in Tucson in
2006.
"Arizona needs better promotion," Garcilaso said. "It needs to get
across what it can offer, not only to business leaders but also in
terms of fun and tourism."
So here are some ways Arizona can raise its profile throughout Mexico
and help Arizona companies do more business there, based on Republic
interviews with economic experts and academics:
• Arizonans need to urge their employers to sell in Mexico. The
state's trade office offers free market research and will organize
meetings with potential customers.
• Gov. Brewer needs to visit Mexico City more often, meeting not only
with Calderón, federal cabinet officials and political party
officials, but also with business groups, airlines and powerful media
like the Televisa and TV Azteca television networks. The goal: Drum up
investment and tourism in Arizona.
• The state should consider opening a trade office in Mexico City.
States as far away as Washington and Wisconsin have offices in the
Mexican capital; Arizona is noticeably absent.
• Arizona should expand efforts like the TechBA business incubator at
Arizona State University, which helps high-tech Mexican companies
start operations in Arizona. TechBA incubators in Austin, Texas, and
California's Silicon Valley have successfully brought jobs to those
states.
• Arizona should also seek out smaller Mexican companies on the
border, such as restaurants, that might want to open branches in the
United States. Many Mexican entrepreneurs want to invest in the United
States but don't know how, said Felipe Garcia, vice president of the
Metro Tucson Convention and Visitors Bureau.
Boosting tourism
To draw more tourists from Mexico, Arizona needs to make itself more
hospitable to Mexicans.
Long waits at the border, a lack of cheap airline flights and a sense
that Arizona is unfriendly to Mexicans has helped keep the number of
travelers to Arizona mostly flat in the last decade, even as Mexicans
have become more affluent in general.
Their buying power is impressive: Every day, Mexicans spend some $7.3
million in Arizona, helping to employ some 23,400 Arizonans, a 2008
University of Arizona study found. And they're spending more every
year: The average Mexican family spent $91.75 during each trip to
Arizona in 2001; by 2008 it had doubled to $201.11.
But the rewards could be even bigger if Arizona could draw people from
Mexico's bigger or more prosperous cities.
Mexicans make some 24 million visits a year to Arizona, but nearly 96
percent of those visitors live on the border, the study found.
The states encompassing Mexico City, Guadalajara and Monterrey - the
country's largest and most affluent cities - each contributed less
than 0.04 percent of visitors.
One obstacle to drawing tourists is the lack of affordable flights to
Arizona, said Garcia, of the Tucson visitors bureau. A round-trip
flight from Guaymas, Sonora, to Phoenix can often cost upward of
$1,100.
"It's cheaper to go to London than it is to come to Arizona from
Guaymas or Monterrey or other cities in Mexico," Garcia said.
Arizona also doesn't advertise enough in Mexico, said Ignacio Vázquez,
director of the Retail Commerce Center at the Sonora campus of the
Monterrey Institute of Technological and Advanced Studies.
"Arizona hasn't exploited that (interior) market or tried to solidify
it," Vázquez, said.
A new public-private national effort, following U.S. Senate approval
last week, should help. It calls for the creation of a Corporation for
Travel Promotion.
Other states have used sales-tax refunds to help attract Mexican
visitors.
Texas runs newspaper ads advertising tax-free shopping for Mexican
shoppers at more than 2,500 retailers. In Louisiana, officials used
their tax-refund program to help persuade Aeromexico to start daily
flights from Mexico City to New Orleans last year, said Sam Ortiz,
marketing director of the Louisiana Tax Free Shopping program. Its
booth at the New Orleans airport now opens three hours earlier, at 5
a.m., so that Mexican tourists can get cash refunds before the flight
to Mexico City at 6:15 a.m., he said.
So how to lure more visitors to Arizona? Here are some ideas,
according to experts interviewed by The Republic:
• The state should consider offering incentive packages to Mexican
airlines to increase the number of direct flights from Mexico to
Arizona.
Major airlines in Mexico now have competition from discount carriers
Interjet, Volaris, and Viva Aerobus - airlines that might be willing
to begin routes to underserved airports like Phoenix Gateway, if they
were given a break on taxes or fees.
• Boost advertising for Arizona tourist attractions, especially in the
major cities of Mexico City, Monterrey and Guadalajara. Hotels,
restaurants and retail stores need to run coupons and vouchers in
Sonoran newspapers, Vázquez said.
• To reduce waits at the border, Arizona should consider a public-
private partnership to build new border ports, Lee said. California
has such a port at Otay Mesa near San Diego, and Texas has one at
Laredo. Private companies help build these ports, in exchange for the
right to collect tolls.
• The state should also consider starting a sales tax refund program
for Mexican shoppers.
• Arizona should also encourage "medical tourism," or attracting
Mexican patients to Arizona hospitals for elective or cosmetic
surgery, Garcia said. Well-heeled patients in Sonora and Sinaloa
states might be persuaded to come to clinics in Phoenix or Tucson
instead of Dallas or Miami.
Equipped to compete
Arizona also can use its border to strengthen its economic
competitiveness: by attracting Mexico's best and brightest engineers
and scientists to its colleges, launching more business incubators
aimed at helping Mexican companies settle in Arizona, and using
student exchange programs to ensure that the state's future workforce
is bilingual.
"Arizona has not incorporated itself into the knowledge economy in
terms of taking advantage of these advantages that it could have,"
said Germán Palafox, a professor of international business at the
University of Sonora.
So here are some possible strategies, based on interviews with
experts:
• The University of Arizona, Arizona State University and Northern
Arizona University should recruit top Mexican students.
Foreign students are a boon to state universities because they pay out-
of-state tuition, Lee said. They also serve as ambassadors for the
state and may someday bring investment back to Arizona.
• The Arizona universities should consider sending their football
teams to play exhibition games in Mexico City, Monterrey or
Guadalajara to raise their profile in Mexico.
• Arizona should also start a placement program to keep highly trained
foreign engineers in the state after graduation, the Milken Institute,
a California-based think tank, said in a December report. Their
presence can keep Arizona on the cutting edge of science and
technology industries, it said.
• Arizona schools and parents should encourage students to participate
in study-abroad programs in Mexico so that they have the foreign-
language skills needed to compete in the global economy.
• Arizonans need to become united behind efforts in Washington to
reform the slow, complicated U.S. visa system that has encouraged
illegal immigration. If Arizona companies could depend on legal "guest
workers" from Mexico, and get them quickly when needed, they might not
be tempted to move their operations to Mexico, Pavlakovich-Kochi said.
Untangling the illegal immigration problem would also ease some of the
tensions, such as immigration raids and border vigilantes, that have
given Arizona a bad name in Mexico and discouraged visitors.
http://www.elpasotimes.com/juarez/ci_14486059
Drug war: Laser, investors' visas allow many to live, work in El Paso
By Adriana Gómez Licón / El Paso Times
Posted: 02/28/2010 12:00:00 AM MST
EL PASO -- They are not your typical undocumented immigrants.
Thousands of middle-class Mexican citizens, under the guise of being
commuters or visitors, may be manipulating the U.S. immigration system
to escape the violence of Juárez.
More than 4,600 murders occurred in Juárez in 2008 and 2009, and the
fallout is apparent in the city's decay. More than 110,000 houses have
been abandoned, 75,000 people have lost their jobs and more than
10,000 businesses have closed.
Now a white-collar segment of Juárez's population may be streaming to
El Paso by misusing tourist visas, then renting houses or apartments
or even opening businesses.
Living in the United States may be illegal for these immigrants who
flee the epicenter of Mexico's drug war by moving right across the
border to one of the safest cities in the country.
El Paso had 12 murders last year compared to 2,643 in Juárez. New York
City, with eight times the population of Juárez, had 466 homicides in
2009.
Most people who cross international bridges from Mexico into El Paso
hold tourist or "laser" visas. This visa entitles Mexicans to visit
the United States, but they cannot work legally in the country.
The U.S. government issued almost 1.5 million visas from 2000 to 2009
at the Consulate of Juárez. Some were for students and temporary
workers, but most were laser visas, which expire after 10 years and
cannot be used for visits longer than six months.
Not just any Mexican citizen can get a tourist visa to enter the
United States. To qualify, one must prove he or she has a steady
income, a residence in Mexico and bank and utility statements to help
demonstrate that he or she is not intent on working in the United
States.
Obtaining a tourist visa also is contingent on the applicant's
background, such as whether he or she has an immigration violation or
criminal history in the U.S., said Lisa Rios, an immigration lawyer in
El Paso.
Mexican nationals apply for the visa at one of the 12 U.S. consulates
in their country. The cost is $130, plus the cost of the Mexican
passport. The screening process usually takes weeks.
Customs inspectors at bridges verify the authenticity of the document
and ask more questions about the purpose of the travel in the United
States. But once foreigners are in the United States, it is difficult
if not impossible to keep track of them.
Customs and Border Protection has a system to record people
overstaying their visas, but it is not as sophisticated as it is in
airports.
Mexicans entering with a laser visa who stay less than 30 days and
near the border do not need a form that allows CBP to maintain a log
of arrivals and departures.
The form is not collected at international bridges in El Paso when
Mexicans are traveling back to Juárez. That leaves CBP without an
accurate record of who is violating the terms of the visa.
So staying in El Paso may provide a way for Mexican nationals to slip
under the immigration radar and justify their presence in the country
as commuters.
Grace Gomez, a Customs and Border Protection supervisor in El Paso,
said the agency documents cases in which people overstay their visit
and notifies Immigration and Customs Enforcement.
A sweep last week by ICE agents in El Paso County led to 33 arrests of
people who were living in the United States illegally. But all of
those people had criminal convictions in the United States, making
them targets of law officers.
Sergio Ramirez, a real estate agent, said most Juárez residents moving
to the United States do not run the risk of being deported because
they have no criminal record.
"If they were criminals, it would be foolish for them to come here,"
Ramirez said. "Here, they get caught."
Another way Juárez residents are moving to El Paso is through
investors' visas.
To get the document, an applicant must show that he or she will invest
at least $500,000 opening a business and hiring at least 10 full-time
employees.
Ana Gonzalez of the El Paso Hispanic Chamber of Commerce said the
agency last year counseled more than 200 business people from Mexico
looking to start operations in El Paso. When the business owners were
not permanent residents or U.S. citizens, an investor's visa was a
possible avenue.
New businesses rooted in Mexico were not necessarily opening in El
Paso be cause its owners were trying to leave Juárez, Gonzalez said.
Some were looking to expand.
Attorney Rios said she had seen an increase in people from Juárez
looking to apply for the investor's visa in the past two years.
The number of these visas granted to foreign nationals went from about
800 in 2007 to nearly 1,400 in 2008, the last year documented by the
United States Citizenship and Immigration Services.
Rios said the number, not broken down by country, indicates more
businesses are moving to El Paso because their owners faced threats of
kidnapping and extortion.
Gomez of Customs and Border Protection said anecdotal evidence shows
that fewer people are crossing into El Paso. An annual immigration
report is still months away.
Nonetheless, more people detect a greater presence of Mexicans in El
Paso.
"If you go to restaurants or malls, you see license plates from
Chihuahua, Chihuahua, Chihuahua," Ramirez said.
Adriana Gómez Licón may be reached at ago...@elpasotimes.com; 546-6129.
Susan
I totally agree with you about Arizona's needed attitude change.
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