Reopening the Camino Real

New Mexico Business Journal, Dec, 1995 by John M. Garcia

New Mexico and the NAFTA connection.

Almost two years have passed since the North American Free Trade Agreement (NAFTA) was approved and signed into law in 1994. At first, it seemed that business men and women were primed to begin their new ventures into the Promised Land of opportunity in Canada. Yet, many chose to do business in Mexico.

Some have the impression that NAFTA was written to solve Mexico's problems. The full economic benefit of the agreement on Mexico, however, will not be felt for another five to ten years. The passage of NAFTA created a level economic playing field for the three nations. NAFTA also reduced trade tariffs, which allows small and medium sized companies to compete on common ground.

In many respects, Mexico is the most promising and opportunistic market for New Mexican companies. Despite the problems created by the recent devaluation of the peso, Mexico remains a prime candidate for investors and exporters. Indeed, with the peso so low, there will probably never be a better time to invest there.

Trade data from 1994 confirm that U.S. businesses capitalized on NAFTA with Mexico. The Massachusetts Institute for Social and Economic Research (MISER) data show that U.S. exports to Mexico grew more than 22 percent from 1993 to 1994 - $41.6 billion to $50.8 billion. In that time, Mexico went from the United States' no. 4 trading partner to no. 1, with a 151 percent increase in exports ($80 billion).

Texas and California are still the largest exporters to Mexico. Texas exports climbed 17 percent from 1993 to 1994 - from $20.4 billion to $23.8 billion. California exports jumped 16.5 percent - from $6.5 billion to $7.6 billion.

New Mexico also saw trade grow with Mexico. The state's export dollars climbed from $76.7 million to $101.9 million from 1993 to 1994. New Mexico ranks 32nd for overall volume of trade with Mexico, although the state leads all others in export growth for 1989 to 1994, according to the New Mexico Trade Division.

Travel Distance in Miles between Albuquerque NM and Selected Cities
in Mexico