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The Calibaja Cross-Border Business Community.
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The Calibaja Cross-Border Business CommunityThe Calibaja Cross-Border Business Community
Alejandro Díaz-Bautista, Alejandro Díaz-Bautista, Ph.D.Ph.D.
Professor of International Economics at Colefand Distinguished ResearcherNational Council of Science and Technology
Presentation for the International Diaspora Engagement Alliance – Diaspora Tour. Center for U.S.-Mexican Studies, Institute of the Americas.Monday, October 13, 2014 from 12:30 PM to 5:30 PM (PDT)San Diego, CA.
The Calibaja Cross-Border The Calibaja Cross-Border Business CommunityBusiness Community
This panel will examine the dynamics This panel will examine the dynamics of our region’s binational economy of our region’s binational economy and the role of the Mexican diaspora and the role of the Mexican diaspora in converting the border region into in converting the border region into an engine for growth.an engine for growth.
The Calibaja Cross-Border The Calibaja Cross-Border Business CommunityBusiness Community
Diaspora means “to scatter” in Greek, but today Diaspora means “to scatter” in Greek, but today we use the term to describe a community of we use the term to describe a community of people who live outside their shared country of people who live outside their shared country of origin or ancestry but maintain active connections origin or ancestry but maintain active connections with it. with it.
A diaspora includes both emigrants and their A diaspora includes both emigrants and their descendants. While some people lose their descendants. While some people lose their attachment to their ancestral homeland, others attachment to their ancestral homeland, others maintain a strong connection to a place which maintain a strong connection to a place which their ancestors may have left generations ago. their ancestors may have left generations ago. Many Americans come from mixed heritage and Many Americans come from mixed heritage and therefore can claim membership in multiple therefore can claim membership in multiple diaspora communities.diaspora communities.
The Calibaja Cross-Border The Calibaja Cross-Border Business CommunityBusiness Community
Many diaspora groups are working to achieve greater Many diaspora groups are working to achieve greater impact and a stronger voice in matters that relate to their impact and a stronger voice in matters that relate to their countries of origin. Mexican Diaspora communities make countries of origin. Mexican Diaspora communities make vital but often unrecognized contributions to the progress vital but often unrecognized contributions to the progress of the United States and Mexico. They share goals with of the United States and Mexico. They share goals with governments, businesses, and NGOs, including:governments, businesses, and NGOs, including:
Broad-based economic growth;Broad-based economic growth; A thriving civil society;A thriving civil society; Widespread participation in good governance;Widespread participation in good governance; Access to global markets for skills and financial capital;Access to global markets for skills and financial capital; Robust trading partnerships with NAFTA;Robust trading partnerships with NAFTA; Growing participation in science, technology and Growing participation in science, technology and
communication projects and innovations. (Example: The communication projects and innovations. (Example: The COLEF, UCSD, SANDAG, CaliBaja project).COLEF, UCSD, SANDAG, CaliBaja project).
Jobs Without Borders: Employment, Industry Jobs Without Borders: Employment, Industry Concentrations, and Comparative Advantage in the Concentrations, and Comparative Advantage in the
CaliBaja RegionCaliBaja Region
This study is the result of an on-going collaboration This study is the result of an on-going collaboration between the CaliBaja Mega-Region Initiative, between the CaliBaja Mega-Region Initiative, Sandag, UC San Diego’s Center for U.S.-Mexican Sandag, UC San Diego’s Center for U.S.-Mexican Studies at the School of International Relations and Studies at the School of International Relations and Pacific Studies and El Colegio de la Frontera Norte Pacific Studies and El Colegio de la Frontera Norte (Colef) with the encouragement of the United States (Colef) with the encouragement of the United States and Mexican Consulates based, respectively, in and Mexican Consulates based, respectively, in Tijuana and San Diego. This initiative consists of a Tijuana and San Diego. This initiative consists of a series of collaborative workshops and studies series of collaborative workshops and studies intended to inform investment, planning, and intended to inform investment, planning, and economic policy decisions in the region.economic policy decisions in the region.
The CaliBaja region has dozens of The CaliBaja region has dozens of industries with a high export capacity. industries with a high export capacity.
Jobs know no borders, so Baja’s labor Jobs know no borders, so Baja’s labor force plays a major role in the region.force plays a major role in the region.
CaliBaja has strongest comparative CaliBaja has strongest comparative advantage in audio-visual manufacturing.advantage in audio-visual manufacturing.
In 2008, the CaliBaja region accounted for In 2008, the CaliBaja region accounted for nearly 40 percent of all employment in the nearly 40 percent of all employment in the audio and video equipment manufacturing audio and video equipment manufacturing throughout Mexico and the United States. throughout Mexico and the United States.
Jobs Without Borders: Employment, Industry Jobs Without Borders: Employment, Industry Concentrations, and Comparative Advantage in the Concentrations, and Comparative Advantage in the
CaliBaja RegionCaliBaja Region
NAFTA at 20 YearsNAFTA at 20 Years
The North American Free Trade Agreement The North American Free Trade Agreement marked a fundamental change in the marked a fundamental change in the regional and global trade scheme.regional and global trade scheme.
NAFTA is an example in economic NAFTA is an example in economic integration, and it helped the North integration, and it helped the North American region grow larger and together American region grow larger and together for the last 20 years. for the last 20 years.
Trade within the three NAFTA countries Trade within the three NAFTA countries has quadrupled, with a combined GDP of has quadrupled, with a combined GDP of $18 trillion dollars. $18 trillion dollars.
NAFTA at 20 YearsNAFTA at 20 Years
NAFTA at 20 YearsNAFTA at 20 Years
During the NAFTA era, FDI in North America has During the NAFTA era, FDI in North America has risen from $110 billion per year in 1992 to $650 risen from $110 billion per year in 1992 to $650 billion per annum in 2010. billion per annum in 2010.
Strong macroeconomic policies have contributed Strong macroeconomic policies have contributed confidence to further investment in Mexico, as confidence to further investment in Mexico, as well as Mexican investments in the United States well as Mexican investments in the United States and Canada. and Canada.
Mexico attracted a record $35.2 billion in foreign Mexico attracted a record $35.2 billion in foreign direct investment (FDI) during 2013, according to direct investment (FDI) during 2013, according to the Secretariat of Economy, nearly double the the Secretariat of Economy, nearly double the level seen in 2012. level seen in 2012.
United States - Mexico Border States
10 border states along the border.
• Nearly 2,000-mile (3,169 km or 1,969 miles) of international border.
•The four U.S. border states (California, Arizona, New Mexico, Texas) include 23 counties that touch the border
•The six Mexican border states (Baja California, Sonora, Chihuahua, Coahuila, Nuevo Leon, Tamaulipas) include 39 municipalities that touch the border.
United States - Mexico Border States
The U.S.-Mexico border region is one of
the most important trade corridors for
North American businesses, representing
a $461 billion economic relationship
between the two countries in 2012.
The border region, defined as the 10 U.S.
and Mexican border states, represents a
combined population of nearly 100 million
people and as the world’s fourth largest
economy.
Economic Impacts and Expenditures
Shopping is the primary reason to cross into the U.S. for Baja California residents. Depending on the study, 42 to 68% of border crossers identify shopping as the primary reason for the visit into Southern California. Other reasons are social in nature, like visiting family and friends, or are work related.
During 2010, around 74 percent of crossers entered California in their private vehicles, since a car allows them freedom of movement between different shopping locations in the U.S. as well as enough room to handle the volume of their purchases.
The estimated average daily expenditures reported by Baja California visitors into San Diego County and California in various studies ranges from US $140 per trip to $300 per trip. The current estimation uses an average amount of expenditures per trip of $240 per trip as the base case scenario.
Economic Impacts The annual retail sales to Baja California Cross Border
Visitors are estimated considering an annual rate of economic growth in Baja California of 2.3%, with a base case spending of $178 per trip, a high case spending of $300 per trip and a low case spending of $140 per trip.
The estimation considers that 42% of border crossers identify shopping as the primary reason for the visit into Southern California.
The implementation of el “Buen Fin” program is estimated to have a reduction of 2% on annual retail sales to Baja California Cross Border Visitors. While the Border Economic Zone (BEZ) is expected to reduce annual retail sales by Baja California CrossBorder visitors by al least 8% during the first few years of the program.
Annual Retail Sales in California by Baja California Border Crossers (Economic Growth Scenario)
0
1000000000
2000000000
3000000000
4000000000
5000000000
6000000000
7000000000
8000000000
9000000000
2010 2011 2012 2013 2014
year
Dolla
rs
Low Spend. Case
High Spend. Case
Base Spend. Case
El Buen Fin Program
BEZ
California Baja California Economic Integration
The California and Baja California border region remains an example of social and economic integration in North America, where cross-border shopping is only one aspect of that economic reality in the border region.
Mexican citizens cross frequently into the U.S. to shop, work, dine, vacation, and visit friends and family. What they spend on those visits results in a key contribution to local border economies in California.
The results reveal annual retail sales by Baja California Cross Border Visitors in the range of 5.9 to 6.8 billion dollars along the U.S.-Mexico border, depending on the complete implementation of the Border Economic Zone (BEZ) in Baja California and the “El Buen Fin Program”.
The base case scenario shows that Baja California consumer and economic drain into the U.S. market is estimated at around 5.9 billion dollars in 2012 and 6.2 billion dollars in 2014, with the implementation of the Border Economic Zone (BEZ).
Mexican diasporaMexican diaspora
Migration between Mexico and the United Migration between Mexico and the United States represents a powerful factor of States represents a powerful factor of economic and social integration between economic and social integration between countries. countries.
It is estimated that in 2012, Mexicans in It is estimated that in 2012, Mexicans in the United States, including first, second the United States, including first, second and third generation, contributed to 8% of and third generation, contributed to 8% of the GDP of the United States.the GDP of the United States.
Mexican diasporaMexican diaspora The population of Mexican origin in the U.S. is an The population of Mexican origin in the U.S. is an
important engine of economic growth in the important engine of economic growth in the United States. The $ 11.7 million first-generation United States. The $ 11.7 million first-generation Mexicans residing in the United States in 2011 Mexicans residing in the United States in 2011 represented 29% of immigrants and 4% of the represented 29% of immigrants and 4% of the total American population. Most Mexicans in the total American population. Most Mexicans in the United States live in California and Texas, the two United States live in California and Texas, the two largest state economies. largest state economies.
The number of people of Mexican origin in the The number of people of Mexican origin in the United States totaled 33.6 million people, United States totaled 33.6 million people, including 11.7 million who were born in Mexico, including 11.7 million who were born in Mexico, according to official statistics released by the according to official statistics released by the Bureau of the Census.Bureau of the Census.
Mexican diasporaMexican diaspora
Mexican immigrants make up 12% of Mexican immigrants make up 12% of immigrant small business owners in immigrant small business owners in the United States. the United States.
While close to 570 thousand While close to 570 thousand companies in the United States, companies in the United States, more than 1 in 25, are owned by more than 1 in 25, are owned by Mexican immigrants annually and Mexican immigrants annually and generate 17 billion dollars in generate 17 billion dollars in revenue.revenue.
Mexican diasporaMexican diaspora
The Hispanic and Latino economic market is The Hispanic and Latino economic market is critical to the prosperity of the United States. critical to the prosperity of the United States. Hispanics are the largest minority market in the Hispanics are the largest minority market in the country. country.
We estimate more than 700,000 veterans of We estimate more than 700,000 veterans of Mexican origin. Also, approximately 1.65 million Mexican origin. Also, approximately 1.65 million people of Mexican origin over 25 with a college people of Mexican origin over 25 with a college degree, including 450,000 masters and Ph.D. degree, including 450,000 masters and Ph.D. degrees. degrees.
We observe Mexican diaspora communities in all We observe Mexican diaspora communities in all states of Union, with important presence in states of Union, with important presence in California, Texas, New Mexico, Arizona, Nevada, California, Texas, New Mexico, Arizona, Nevada, Colorado, Florida, Illinois, New York and Colorado, Florida, Illinois, New York and Washington.Washington.
ConclusionsConclusions U.S.-based ethnic diasporas have long been U.S.-based ethnic diasporas have long been
involved in the domestic affairs of their countries involved in the domestic affairs of their countries of origin. Their involvement has been encouraged of origin. Their involvement has been encouraged by elements in home countries for a variety of by elements in home countries for a variety of reasons, including economic, political, financial, reasons, including economic, political, financial, and cultural. and cultural.
The growing empowerment of ethnicity in the The growing empowerment of ethnicity in the United States and the improved connection of United States and the improved connection of ethnic groups to their ancestral homelands ethnic groups to their ancestral homelands through modern transportation and through modern transportation and communication have rendered some diasporas, communication have rendered some diasporas, like the Mexican diasporas truly transnational.like the Mexican diasporas truly transnational.
The Mexican diaspora is converting the border The Mexican diaspora is converting the border region into an engine of growth.region into an engine of growth.
ConclusionsConclusions
The U.S. and Mexican economies have integrated The U.S. and Mexican economies have integrated since the passage of the North American Free since the passage of the North American Free Trade Agreement (NAFTA) in 1994. Trade Agreement (NAFTA) in 1994.
In 2009, the U.S. provided up to 80% of all In 2009, the U.S. provided up to 80% of all inputs for Mexico’s maquiladora manufacturing inputs for Mexico’s maquiladora manufacturing and assembly firms, and nearly 90% of all and assembly firms, and nearly 90% of all exports from Mexico’s maquiladora industry went exports from Mexico’s maquiladora industry went to the U.S., with an estimated $114 billion in to the U.S., with an estimated $114 billion in bilateral U.S. and Mexico trade. bilateral U.S. and Mexico trade.
By 2010, the United States was Mexico’s largest By 2010, the United States was Mexico’s largest trading partner and largest foreign investor. trading partner and largest foreign investor.
The Calibaja Cross-Border Business CommunityThe Calibaja Cross-Border Business Community
Alejandro Díaz-Bautista, Alejandro Díaz-Bautista, Ph.D.Ph.D.
Professor of International Economics at Colefand Distinguished ResearcherNational Council of Science and Technology
Presentation for the International Diaspora Engagement Alliance – Diaspora Tour. Center for U.S.-Mexican Studies, Institute of the Americas.Monday, October 13, 2014 from 12:30 PM to 5:30 PM (PDT)San Diego, CA.
