NAFTA at Twenty: Trade,

Transformation and the China Factor

By

Flavio Olivieri, CEcD

CEO, Tijuana EDC

Nafta 20 year anniversary

• US Exports to Mexico have

increased 400%

• Over $200 Billion

• NAFTA Trade: Represents

14 Million Jobs.

• Supply Chain Integration,

US Content of Imports:

• 40% from Mexico

• 25% from Canada

• 4% from China

• < 4% from Europe

Mexico´s NAFTA sectors

3 million units.

8th producer and 4th

largest exporter of

lightweight vehicles

6th manufacturer of heavy

vehicles

80,000 employees

270 companies, 32,000 employees

6th exporter to U.S.

Exports of $5 billion and

$12 billion by 2021.

Baja California represents

28% of country exports 2,349 companies, 115,000 employees

Exports of $8 billion and $5

billion by 2020.

Baja California represents

50% of country exports

Mexico´s Free Trade

Agreements Network

1994 Mexico’s pro-international trade policies have created a world-wide network of

free trade treaties with 44 countries, including:

Alianza del

Pacifico

TPP

Where is the Cali Baja Mega-Region?

Cali Baja Mega-Region: Where is it?

• Combines bi-national region of San Diego County, Imperial County, and Baja California…

By the Numbers: Mega-Region Overview – the People

Population of the Mega-Region

• 6.6 million population (2013 est.)

• 3.2 million labor force (2013)

• High educational levels in each of respective countries:

• Over 34% of San Diego County residents 25+ y/o have Bachelor’s degree or higher

• Baja California ranked 4th in Mexico for average years of education

• Over 60,000 combined Mega-Region High School graduates in 2011-2012

• Over 400,000 Mega-Region students enrolled in university and post-grad studies

Five Strategic Industries

• Advanced Manufacturing: aerospace, automotive, biotechnology, electronics, defense, medical devices, shipbuilding and telecom

• Agribusiness: agricultural crops, livestock & aquaculture

• Applied Biotech: bio/pharma/medical devices

• Cleantech: renewable materials and energy

• Logistics: customs brokers, freight forwarders, 3PLs and other advanced logistics providers

By the Numbers: Mega-Region Overview – the Economy

Scale of the Mega-Region Economy

• $214.3 billion: combined GDP (2012-2011)

• 3.0 million: total employment (2013)

• 50 years of experience in manufacturing

• #1 Medical device manufacturing employment in North America

• #1 in Export manufacturing companies in Mexico

• 50+ Industrial Parks

Tijuana: Mexico´s manufacturing hub

565

171,950

•114 Companies • 55.000 employees •43 Companies

• 34,000 employees #1 North America

• 40 Companies • 18,000 employees

• 29 Companies • 7,600 employees

Electronics

Aerospace

Medical

Automotive

Tijuana’s Key Industrial

Sectors

Education

•35+ universities

•15 technical schools

•57 high schools

•3 R&D Centers

Workforce profile

• Total cost to U.S. market

• Stable economy

• Ease of doing business

• Speed to market logistics

• Strong IP protection

Mexico´s Global Competitiveness

“Mexico is in a strong position to be a significant

winner from shifts in the global economy.” Boston

Consulting Group June 2013

Why Mexico by the numbers

750,000

Engineering

students

115,000 graduates

every year

Key Low Cost Countries Total

Landed Cost to U.S.

OECD

Latin America

Mexico

Brasil

Argentina

Chile

2.96

2.16

3.25

2.49

2.06

1.58

Technological Sophistication Index

Source: Promexico, Perspectives on Global Development 2010,

OECD, Based on Woo (2010).

Co-Innovation Success Stories

Contract Manufacturing

80+ companies offering

world-class manufacturing solutions

Silicon Valley´s

traditional format

"Suppliers List 2013" major manufacturing

locations of suppliers who provide raw materials

and components, or perform final assembly for

Apple.

14 Manufacturing Plants in China

World Intellectual Property Organization, 2013

The Shift of Innovation to Asia

Co-Innovation Calibaja Style

Co-Innovation success stories

Estimate Investment $750 Billion

Otay II POE

Key Projects

Bi-national Airport Terminal

Estimate Investment $14.5 Million

525-foot pedestrian bridge linked to a 45,000-square-foot terminal in Otay Mesa. 2.5 million U.S. travelers The project is expected to be completed by 2015.

The first binational airport in America

Key Projects

Conclusion

• CaliBaja offers a unique business platform for U.S. small

and medium companies to do business in emerging

markets: Mexico, Latin America and the Pacific

• CaliBaja combined capabilities include a well-developed

innovation ecosystem. Integrating engineering and design

with advanced manufacturing in one region, without going

overseas

Thank you!

www.tijuanaedc.org

folivieri@tijuanaedc.org

Flavio Olivieri, CEcD

CEO, Tijuana EDC