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Mexico and Arizona joined trade ties

Mexico and Arizona joined trade ties

Posted by Ricardo Vázquez on October 08, 2014

Rebooting commercial ties older than Arizona, the state formally re-opened a trade office in Mexico Tuesday in an effort to grow business by the billions of dollars.

Government officials from Arizona and Mexico agreed the state's outreach is timely and likely will help small and medium-sized businesses on both sides of the border find opportunities to reach new markets.

"While this office represents the future, it is important to remember it also reaffirms the longstanding commitment to trade and economic development efforts here in Mexico," said Sandra Watson, president and CEO of the Arizona Commerce Authority, the agency that opened the office.

"We are just scratching the surface of our potential partnership with Mexico."

The office opens as Arizona seeks to move past the rifts created in recent years over illegal immigration and border-control efforts by the state. Last year, Mexico launched wide-ranging economic reforms intended to help the company better compete in global markets.

"This is not just a symbol. This is well beyond that," said Ana Luisa Fajer, director general under Mexico's secretary of foreign relations.

She said the trade office is the kind of effort at fostering innovation and entrepreneurship envisioned by President Barack Obama and Mexican President Enrique Pena Nieto, who met last year to discuss economic-development plans.

Anthony Wayne, the U.S. ambassador to Mexico, similarly cited the office as a way to build on already strong economic ties.

The office, formally known as the Arizona State Trade and Investment Office in Mexico, features an Arizona flag hanging above the doorway.

Opening the facility is the capstone of an effort that has been in the works almost since Arizona closed its trade office in Guadalajara three years ago as state lawmakers wrestled with continuing budget shortfalls.

The office is intended to connect Arizona businesses wanting to trade in Mexico and to seek Mexican investors looking for opportunities in Arizona. The role is similar to what the U.S. Commerce Department offers, but with an Arizona focus.

"An office here and now is substantive and symbolic," Phoenix Mayor Greg Stanton, who was in Mexico City for the event. "We understand how important this relationship is. We haven't always sent that message."

He said larger companies have more resources to expand globally, but smaller operations could find valuable assistance from the office.

"Small- and medium-sized companies are the target," Stanton said. "The big companies are doing fine," he said. "Small business needs to think of themselves as part of the international economy as well."

Mexican officials seemed receptive.

Enrique Carlos Ugarte Dornbierer, a representative of Mexico's economy secretary, announced Tuesday that Mexico's equivalent of the commerce authority plans to open its 12th office in the U.S. in Phoenix in the coming months.

"We are going to work very hard … and push a lot of businesses together here and in Arizona," he said.

An Arizona trade delegation that arrived Sunday has spent the past three days in talks with Mexican business and government officials, with participants expressing their interest in working cooperatively to boost trade heading in both directions on the border.

Advanced education, bioscience and aerospace expertise are among the things Arizona hopes to export more.

During one of the meetings Monday, Carlos Duarte Munoz, a deputy director for Mexico's equivalent of NASA, told the Arizona delegation his agency's budget "is ridiculously small."

That means he is looking for businesses to help put satellites aloft and help make Mexico at least 1 percent of the world's space industry.

This year Arizona lawmakers approved $300,000 in the state budget for the office. The cities of Phoenix and Tucson and the Maricopa Association of Governments and Visit Phoenix also kicked in a total of $75,000.

The office has three full-time employees and initially will get part-time help from at least one other person initially, Watson said.

Victor Aguilar, who will head the trade office, said that in some ways Arizona is starting from scratch.

"We have to re-establish those relations. That's the initial goal," he said of outreach to Mexican business groups. "There are a lot of changes in Arizona. What the state wants to do is send out a message that we're open for business."

The state first opened a trade office in Mexico City in 1992, at a time when the United States was crafting the North American Free Trade Agreement.

In 2000, Arizona moved the office to Guadalajara, in part to be closer to an area characterized as Mexico's equivalent to Silicon Valley, but also because of concerns of violence in the capital.

The state closed its Guadalajara office in 2011.

Arizona has maintained a joint office in Hermosillo with the Arizona-Mexico Commission, but its diminished presence symbolized the low ebb in relations with its foreign neighbor best embodied by the controversy over Senate Bill 1070, the state's immigration-enforcement law.

These days, business interests on both sides of the border are looking to the future.

The Hermosillo office will serve as a satellite for an area closer to the border, while the trade office in Mexico City will look for trade and investment opportunities throughout the country.

If the office reflects a change in thinking and approach in Arizona, it also is a nod to the rapidly growing Mexican economy. Mexico rebounded sharply after the global downturn in 2009 and last year implemented wide-ranging reforms, from education to tax policy to energy and oil.

It was a restructuring Mexicans say was both jarring and overdue.

Mexico is already the world's 14th-largest economy and is expected to become the fifth-largest by 2050.

Last year Arizona and Mexico divided $14 billion in trade, a figure both sides expect to grow.

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