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tv   [untitled]    April 27, 2012 12:30pm-1:00pm EDT

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consequence for mexico today. let me start with this. well, we need to remember the benefits of trade. and probably we are forgetting the lesson about that. trade is positive for economy, and we need to say that to the population. we need to say that to the media and we need to say that to the congress. trade increases competitions, trade provide access to technologies and inputs for companies but also for societies. trade increase productive efficiency and trade improves macroeconomic stability. keep inflation under control and a lot of benefits. and in particular the benefits of commerce are for all. consumers win, workers win, producers win, we all win with trade and we all win with
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commerce. but in order to preserve the benefits of trade, it is important that the economies make improvement in their competitiveness. actually, often economies provide the right incentives for governments and for society. and in order to preserve the competitiveness of the country, we made several actions or we took several decisions in order to do so. what kind of decisions we are making? for instance, we are a process of trade liberalizations with even more agreements and treaty with other countries. we started a very special process of tariff reductions in the country, even with countries with which we have not free trade agreements. a process of deregulations in
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the government. the macroeconomic stability i talk already about it. investing a lot in infrastructure and investment in education, in particular technology or technical-oriented education. starting with trade, you can see that mexico has preferential access to 44 countries. most of them through free trade agreement like nafta but also we have free trade agreement with europe, we have free trade agreement with japan and with several nations in latin america. free trade agreement with chile, peru, colombia and others. so you can see the number of countries with free trade agreements. mexico is in a very good position, as mr. donohue already say.
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and in the right side you can see the process we started with tariffs. let me tell you a tale. since the first g-20 meeting i attended here in washington, d.c., i remember, with former president bush, and in any single meeting, all the nation used to say, like words and final papers. don't allow protectionism, we refuse protectionism. we are going to conclude and so on. and exactly the day after, 15 out of 20 participants in the g-20 used to increase tariffs in their trades with the exception of mexico. right in the middle of the crisis. even without understanding of several sectors of private -- of the society of mexico, we reduced tariffs and actually we reduced from 11% on that
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reduction in 2006 to 44% today on average. and with that, mexico got a lot of competitiveness. why? because most of the trade today is not trade related with final products, is not trade related with capital products, it's a middle products trade. and with that, the companies, especially the manufacturers companies are getting a lot of competitiveness in our country. in other words, if you are able to get the cheapest inputs and the highest quality inputs for your products, for instance, for one -- i'm sorry, for this blackberry, you are able to get the best inputs for your products, you will be able to produce 65% of the blackberry in the world in got uadalajara citn
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mexico. reducing tariffs paradoxically increases exports for our country and that is the mexican case. why? because the key issue is middle products, inputs for industry. other reform we are making is reducing bureaucracy and red tape for industry. in 2010, we started a process. and in that process i asked all the members of my cabinet to think about what exactly are the lows or the regulatory framework that they really need to doing business. and we erased more than 16,000
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norms in mexico, from several conditions, and with that we eliminated more than 2,200 procedures for industry. so it's probably the most important deregulatory process in mexican government. actually we made some kind of contest, and the name of the contest was in spanish -- [ speaking in spanish ] the most useless procedure. a lot of people participated. we got a lot of suggestions to erase norms and regulatory framework and red tape. so we are increasing the competitiveness of industry. one of the issues we made is, for instance, to open a single web page in order to start a business. before this, for instance, if you went to open a company in mexico, you need to go first to
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the foreign relations secretary. in order to ask for a special permit. why? i don't know exactly why, but you need to go first to the foreign relations ministry. an then you need to go to the -- of course to the tax office. and then you need to go to social security institute. then you needed to go to the secretary of trade and commerce and so on. and you used to have several months before you could open your business. actually you need to come back, come back to the foreign relations ministry in order to ask for a special permit to get a name, the name of your company. and what is the reason for that? i don't know, but that's a fact. so today we opened a single web page and the name is www --
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[ speaking in spanish ] and with that you can open a new business in two hours by computer and internet with the full procedures at the federal level. of course we need to advance a local level today, so that is part of the problem we have, this federal system which is very difficult to align the incentives and programs, but we are moving ahead. so the outcome is that we are reducing the time required to start a business from almost 60 days to only nine days on average in the country, and that is quite important for us. macroeconomic stability, as i was mentioning, our inflation is really probably the lowest inflation in several decades for one administration.
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you can compare this with the inflation in the region or with other countries. we are below china, we are below brazil, russia, india, very close to chile and not close, but close enough to the inflation here in the united states. so talking about public finances, i was telling that we are facing right now a deficit of 2.5 of gdp, including investment. and we are far below the ocd average, talking about fiscal deficit. so that is the lesson we learned from the past, from the past mexican crisis in the '70s, in the '80s, in the '90s. we need to preserve fiscal deficit. actually we are reducing even more of the fiscal deficit in the country.
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i'm talking about public debt. you can see that the average ocd -- i'm sorry, i made a mistake but the average is like 62.5% of gdp. mexico has now 32% of gdp in public debt depth by the last year so we are in good shape in macroeconomic stability and public finances. that is a very important point, investing in infrastructure in the country. on average, we were spending like 3% of gdp, which is actually very close to the average of oecd countries. in the oecd, the average investment in infrastructure is 3.4% of gdp. we increase the investment in mexico from 3% to almost 5% of gdp a year, which implies to invest roughly like more than
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$50 billion a year in infrastructure in mexico, public and private. and with that, we are increasing in a very important manner the capabilities of the country and the competitiveness of the industry. let me tell you, for instance, this figure that is to january, but probably we are building or rebuilding almost 20,000 kilometers of highways, country roads and roads in mexico. which is more than the whole railroads, highways or country roads built in the last administrations combined. probably we will increase, because we are expecting to finish my administration with 22,000 kilometers of new
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highways or rebuilding highways and roads, which is the highest effort in infrastructure in several decades in mexico. but it is not only highways. for instance, in some cases in terms of airports, some new airports we are building in sonora or rebuilding others in the country. and the same is, for instance, in terms of help infrastructure. we have built in the last five years more than 1,000 new hospitals or clinics in the country. and we have rebuilt 2,000 more. so in total, more than 3,000 new or renewed hospitals or clinics in the country. and with that, we are improving dramatically the condition of health services in mexico. actually we are arriving today
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this year to universal health coverage in the country, which means that any mexican people have a doctor, medicines, treatment and hospital if they require it. we need to improve a lot, quality and other factors, but part of the effort is in the infrastructure sector and the same is education, infrastructure in education. of course this is increasing the competitiveness of the economy as well. now, as long as we are investing in higher education, because we have created 105 new universities, public and free tuition universities in these years, and we have built 52 new campuses for another public universities in the country, today we are graduating 121,000 new engineers a year. so mexico today is graduating
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more engineers than germany, united kingdom, more than double than brazil, which actually has almost the double of our population, more engineers than italy, than spain, than canada and several, several countries. and we are improving the condition and competitiveness of our industry. we were talking a few minutes ago about the experience and a quite interesting tale about aerospace industry. for instance, we established some years ago a new university especially oarriented towards aerospace industry. and the goal at that time was to provide well-trained workers and technicians for our projects in aerospace industry. and in fact mexico during this year has been the most important receiver of aerospace industry
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in the world. the most important destination. but i was mentioning that one of the companies that went to mexico, for instance, ge, general electric. and today the mexican engineers coming from that university are not only working for ge and other aerospace companies. some of them are designing the new engine for the 380, the biggest airplane in the world. so we are passing from manufacturers to factories, if i can say that. and that is important because investing in people, investing in human capital or human value, i do prefer, is crucial to improve the condition of the people but also to improve the
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condition of the economy. so the reforms have yielded valuable results for the country. competitiveness, increased trade and development of high value-added industries. and a result of that, mexico has become a stable partner and source of economic growth for the whole north america and the world region. let me tell you some figures about competitiveness. plea please, the movement of mexico from 2006 -- this is the business index from the world bank. so mexico passed to be in the place 73rd five years ago to be in the place 53rd today. so we surpassed a lot of countries, and today we are
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ahead of, for instance, for the rest of economies, so brazil, china, india, we are above them. and russia. and we are almost reaching -- well, better places in the region. so we need to advance much more, but we are doing very well in this index. you could have said the same in the world economic forum. the economy that advanced the most in terms of competitiveness, according to the world economic forum, was the mexico -- mexican economy, advancing eight places in the last year. i want to make a point in terms of the benefits of trade, and in particular the benefits of inputs into trade for total exposure, especially for
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manufacturers. and that is there is a clear correlation. this graph represents the relationship between manufacturing growth and tariff reductions. you can see tariff reductions means if you are more to the right, you have more tariff reductions or almost zero tariff for those products. and you can see in the vertical axis, the real growth for that industries. and you can see in the right side, all these industries with almost zero tariffs, like manufacturing, like you can see above in the graph transportation, equipment, you can see basic metals, rubber and plastic, metallic products and so on. so all those are growing the most, despite the fact -- or probably due to the fact that
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they have zero tariffs. and on the other side of the graph, you can see the industry that are more protected still in mexico, like clothing, leather, editorial industry and others. so they are losing competitiveness but they are keeping or preserving tariffs. and the same with this graph right now, this is a clear correlation, direct correlation between the middle products, imports, and manufacturing exports. the more intermediate goods we import, the more manufactured goods we export. so that is a clear correlation. more trade is more benefits for everyone. and that is crucial for the success of mexico in terms of exports of our country. look at this. beginning nafta, we used to export only -- well, only, $52
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billion. today we are exporting $350 billion last year, which means,. which means, it is crucial for our country. and equality of you are exports you can see those pies in which by the 80s. 60% of mexican export used to be oil. but today oil represents only 16% of our export. the rest is nonoil products which is another expression of mexican competitiveness. lat lal trade of the united states you can see in the year
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2009, it's increasing dramatically. you can see the pretrade agreement and you can see it dramatically increase in american and mexican by lateral trade. i wanted to point this out, today, for instance, mexican manufacturers, if you observe this figure, you are exporting 60% of manufacturers. now another way to see the mention and increasing competitiveness is our market share in the american economy.
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but mexico is winning market share because we are passing from almost 70% in 93 to almost 12% in 2011. with that it's clear that we are not only increasing our export, but we are increasing the proportion of mexican products here in the united states. that implies that a lot of mexican jobs, a lot of american
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jobs, i'm sorry, depends on mexican imports. actually mexico is the second largest buyer of american products. we love american products. and if you -- i received a beautiful document hands in the mexico u.s. partnership. it's the report of the u.s. mexico leadership initiative that we started with the u.s. chamber. if you have time to review, you can see in the last page, this beautiful map about the states of america or the united states and for each one you can observe the size of the export of that specific states and the number of american jobs that depends on the exports to mexico. so i strongly recommend to read these later. i don't want to lose your
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attention on this. the united states export almost $200 billion to mexico every single year. somebody say is china is quite important. it's crucial. a lot of american exports used to go to china. yes.
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than china and japan together or the rest of latin american countries or europe. we are really fans of american products that is important to talk to the people here in the states when we were facing these blocks against free trade and other important issues. well, that is more or less -- your document is by far more clear. and you can see for a lot of states here mexico is the first or second most important market for american products.
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of course we are in favor and we express the gratitude to the u.s. chamber for support to comprehensive mie kbrat in the united states. for the people to serve, the hard workers who used to pay a lot of taxes and so on it's comprehensive reform. but not only -- [ applause ] >> not only the people businesses here in the united states need workers. our sector in the united states is losing a lot of competitiveness and opportunity due to restrictions. you can see the numbers like
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it's very important difference between migration towards mexico. and immigration coming from mexico. but today we are tying the flows. what that means that today we are reducing mie brags to the united states almost to zero in net terms. why? somebody tole me that today appears an article in "the washington post." i didn't read that. but the fact is that due to several factors because we are creating job opportunities in mexico, educational opportunities for young people.
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the fact is that migration is probably one of the most important news that we need to consider about this quite important debate. actually a lot of people the fact is it's a swing in terms of opportunities. you can see how this year we are observing year after year how the net rate of migration has
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been reducing and today. >> the world needs more trade not less trade. the world needs more freedom and not less freedom and more investment. that is the reason why protectionism is excessive nationalism, studies in exprop ration procedures are against what the world is needing today. we need more trade. more investment and more freedom. more private companies with trade. today we want mo.


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