TRADE AND COMPETITIVENESS IN NORTH AMERICA
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1 TRADE AND COMPETITIVENESS IN NORTH AMERICA A FOCUS ON THE CALI BAJA MEGA-REGION PRODUCED BY RESEARCH SUPPORTED BY El Colego de la Frontera Nort e
2 NORTH AMERICAN TRADE IN THE AGE OF NAFTA The North Amercan Free Trade Agreement (NAFTA) was enacted on January 1, 1994, and was the frst recprocal agreement of ts knd between ndustral and developng countres. Broadly, the agreement sought to lower trade barrers and ncrease trade and nvestment between the Unted States, Canada, and Mexco. Ths summary uses avalable data to analyze and llumnate how NAFTA has heghtened economc compettveness across North Amerca and spurred growth n Cal Baja s nnovaton economy, makng t one of the most benefcal and sgnfcant trade agreements n hstory. NORTH AMERICAN TRADE FAST FACTS $1.3T value of trade between U.S., Canada, and Mexco (2014) $3.6B daly value of trade conducted n North Amerca 40% U.S. mports from Mexco orgnally sourced from U.S. 14M U.S. jobs supported by trade wth Canada and Mexco 25% U.S. mports from Canada orgnally sourced from U.S. U.S. MEXICO TRADE FAST FACTS CALIFORNIA MEXICO TRADE FAST FACTS 5M U.S. jobs supported by trade wth Mexco U.S. states that have Mexco as #1 or #2 tradng partner workers hred n U.S. for every 10 workers hred n Mexco (multnatonal companes) 566K #1 $26.8B Calforna jobs dependent on trade wth Mexco Mexco s Calforna s largest export market (2015) value of Calforna s exports to Mexco 123K 6M jobs supported by Mexcan nvestment truck crossngs (2017) 311% growth n Calforna s exports to Mexco ( )
3 CALI BAJA: OUR BINATIONAL MEGA-REGION SAN DIEGO EXPORTS OUR BINATIONAL MEGA-REGION AT A GLANCE The Cal Baja mega-regon ncludes San Dego County, Imperal County, and the State of Baja Calforna. It s a globally unque bnatonal regon that offers one of the world s most compettve and nnovatve busness envronments by leveragng complementary resources and capabltes. AN ESTIMATED $6.2B OF CALI BAJA S TOTAL FOREIGN EXPORTS STAY WITHIN THE BINATIONAL MEGA-REGION. San Dego s top tradng partners are Mexco and Canada, respectvely. But San Dego s exports to Mexco, at almost $6 bllon per year, are fve tmes ts exports to Canada. Ths s n large part due to cross border producton wth Tjuana. One thrd of San Dego s exports to Mexco are destned for neghborng Baja Calforna. SAN DIEGO COUNTY IMPERIAL COUNTY BAJA CALIFORNIA If Baja Calforna were a country, t would be San Dego s second largest tradng partner 7.1M 2.2M TOTAL POPULATION M NORTHBOUND CROSSINGS (vehcle passengers & pedestrans) 2017 *Most recent year avalable for Baja Calforna TOTAL JOBS 2013* $24.3B TOTAL FOREIGN EXPORTS 2013* 1.4M NORTHBOUND TRUCK CROSSINGS 2017 SAN DIEGO & IMPERIAL BAJA CALIFORNIA BAJA CALIFORNIA SAN DIEGO & IMPERIAL Audo & Vdeo Equpment 11.7% Semconductor & Other Component 9.8% TOTAL EXPORTS = $2.1B Metal Producton & Processng 3.3% Transportaton 3.0% Plastcs Product 3.0% Audo & Vdeo Equpment 13.9% Transportaton 4.0% Semconductor & Other Component 4.0% Medcal Equp. & Supples 1.7% TOTAL EXPORTS = $4.1B Comms Equp. 1.5% The economes of San Dego, Imperal, and Baja Calforna are complementary, relyng on one another to supply labor. In the U.S., nearly 87 percent of manufacturng job losses from 2000 to 2010 were caused by productvty ncreases as opposed to the relocaton of jobs attrbuted to trade. $2.5 BILLION VALUE OF THE CO-PRODUCING MANUFACTURING SUPPLY CHAIN WITHIN CALI BAJA SPOTLIGHT: MEDICAL DEVICES The Cal Baja mega-regon s home to the world s largest medcal devce cluster, due n part to sgnfcant foregn drect nvestment from global frms that often co-locate on both sdes of the border. Frms lke Thermo Fsher Scentfc & BD beneft from all the mega-regon has to offer ncludng specalzed producton processes and a hghly-sklled labor force. TRADE & PRODUCTION We Make Thngs Together Wth the rse of global value chans, ctes that are hghly specalzed n specfc ndustres have been able to leverage free trade to ncrease local and global growth. The Cal Baja mega-regon s combned comparatve advantages on both sdes of the border have allowed t to emerge as a global hub for hgh-tech research and development and advanced manufacturng. A medcal devce or automoble may cross the border multple tmes before t s fnshed. Ths trade n ntermedate nputs means that 40 percent of U.S. mports from Mexco are Amercan-made (compared to 4 percent of U.S. mports from Chna). 50% share of U.S. Mexco trade attrbuted to ntermedate nputs $136B value of U.S. ntermedate nputs consumed by Mexco $132B value of Mexco ntermedate nputs consumed by U.S. TRADE & MANUFACTURING Jobs Know No Borders Cal Baja s manufacturng sector has emerged as one of the world s strongest cross border supply chans. The compettve advantage resultng from ths ntegrated, co-producng sector fuels the nnovaton economy and fosters compettveness, all whle supportng hgh-payng jobs on both sdes of the border. Cal Baja specalzes n advanced manufacturng, producng many hgh-value goods, ncludng medcal devces, semconductors, aerospace parts, and audo and vdeo equpment. MANUFACTURING EMPLOYMENT SHARE BY INDUSTRY 55.8% 13.7% 10.3% 4.9% 8.4% 6.9% BAJA CALIFORNIA Navgatonal, Measurng, Electromedcal, & Control Instruments Manufacturng Aerospace Product & Parts Manufacturng Medcal Equpment & Supples Manufacturng Pharmaceutcal & Medcne Manufacturng Shp & Boat Buldng Other Medcal Equp. & Supples Manufacturng Semconductor & Other Electronc Component Manufacturng Audo & Vdeo Equpment Manufacturng Plastcs Product Manufacturng Motor Vehcle Parts Manufacturng Other TOTAL MANUFACTURING JOBS = 418.3K SAN DIEGO & IMPERIAL 64.8% 10.1% 6.8% 6.3% 6.0% 6.0% Note: Data reflects 2013, the most recent avalable for Baja Calforna
4 THE FUTURE FRONTIERS OF TRADE Aganst the backdrop of rapd changes n global producton, Cal Baja must dentfy and mantan the sources of ts compettveness n the 21st century nnovaton economy. Cross border producton sharng has made North Amerca more ntegrated, more reslent, and more compettve; t has also served to nsulate our economes from other global compettors, such as Chna. By 2020, however, more than half of all U.S. exports wll be n servces, not goods. KEY TRADED SERVICES IN CALI BAJA S INNOVATION ECONOMY $7.6M COMPUTER SYSTEMS DESIGN & RELATED SERVICES $3.5M SCIENTIFIC RESEARCH & DEVELOPMENT SERVICES 51% of total trade wthn Cal Baja s n the servce sector $3.1M $2M $2M OTHER PROFESSIONAL, SCIENTIFIC, & TECHNICAL SERVICES SOFTWARE PUBLISHERS DATA PROCESSING, HOSTING, & RELATED SERVICES The future of North Amercan trade s not about avocados and dary, or even automobles and medcal devces, but about the ways n whch hgh value servces cross borders, and the framework for IP protecton, data transfer and prvacy, and sustanablty that wll govern and secure tomorrow s global economy. Note: Data reflects 2013, the most recent avalable for Baja Calforna
5 KEY TAKEAWAYS FREE TRADE BOOSTS JOBS AND STRENGTHENS NORTH AMERICA S ECONOMY Nearly $3.6 bllon n trade occurs daly between the U.S., Canada, and Mexco, and 14 mllon jobs n the U.S. are supported by North Amercan trade. WE DEPEND ON EACH OTHER Mexco s Calforna s largest export market, wth annual exports totalng $26.8 bllon. Today, trade wth Mexco supports more than 566,000 jobs n Calforna. WE MAKE THINGS TOGETHER The Cal Baja mega-regon s globally compettve because of the complementary nature of our economes. In fact, the mega-regon s co-producng manufacturng supply chan accounts for $2.5 bllon n trade. WE SPECIALIZE IN HIGH-VALUE GOODS AND SERVICES Globally recognzed as a leader n advanced manufacturng, Cal Baja produces commodtes ncludng medcal devces, semconductors, aerospace parts, and audo and vdeo equpment. Together, the mega-regon s manufacturng sector drectly employs 418,300 workers. HIGH-VALUE SERVICES ARE THE FUTURE OF TRADE IN NORTH AMERICA Today, more than 51 percent of total trade wthn the Cal Baja mega-regon s n the servce sector. Establshng a robust framework for IP protectons, data transfer, and prvacy wll be essental n ensurng that North Amerca remans compettve n the global economy. IN PARTNERSHIP WITH UNDERWRITTEN BY RELEASED JUNE 2018 Sources: Baja Calforna, COPLADE ; Bureau of Labor Statstcs; Bureau of Transportaton Statstcs; INEGI; State of Calforna, Department of Fnance; UC San Dego Center for U.S.-Mexcan Studes; U.S. Chamber of Commerce; Wlson Center Mexco Insttute.
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