North American Global Powerhouse
While reading the Wall Street Journal the other day, there was an article, written by George P. Schultz, which caught my eye. As professionals, many of us hear about powerhouses and economies regularly. What many may notice is how the North America Global Powerhouse is overlooked, which includes the countries; Mexico, Canada, and the United States. When President Bill Clinton ratified the North American Free Trade Agreement, it opened the doors for the three economies to excel at a sharp pace. What caught my eye is that over the years, may of our clients, are the North American Region for their global companies.
These three countries have become each other’s largest trading partners. “A 2010 NBER study shows that 24.7% of imports from Canada were U.S. value-added, and 39.8% of U.S. imports from Mexico were U.S. value-added.” Not to mention, legal traveling and movement of people totals out at 230.8 million annually for North America. This includes legal border crossings of trucks, tourism, and trips. Between the three countries, they account for $6.63 trillion in exports and imports.
The article also discusses how North America is underway to being a net exporter of energy with the use of horizontal drilling called fracking. This will provide security of oil supply, no matter what is happening in the Middle East. This will help open the doors to ideas of how to use producing and using energy more efficiently.
What will determine productivity is the quality of education. “In the U.S., Canada, and Mexico, there is a wide disparity in average K-12 achievement scores, even though in all three countries, there are plenty of examples of outstanding schooling.” Canada is the leader in math, followed by the United States and ending with Mexico. It is said that if K-12 achievements of students in the U.S. and Mexico were to rise to those in Canada, the average paycheck in the U.S. would increase of 20% per year. Mexico’s paycheck, on the other hand, would be significantly higher.
A lot of issues in North America today have a lot to do with attitudes towards immigration. It should be brought to attention that the fertility rate in Mexico is declining and economy that is now more competitive with China in new ways. Last year, net immigration of Mexicans to the U.S. was zero. Schultz continues to point out that 70% of people who work on farms in the U.S. are immigrants, whether they are legal or not.
George Shultz ends the article with a famous quote from Ronald Reagan on January 19, 1989, in his last formal statement at the White House:
“We lead the world because, unique among nations, we draw our people—our strength—from every country and every corner of the world. And by doing so we continuously renew and enrich our nation.While other countries cling to the stale past, here in America we breathe life into dreams. We create the future, and the world follows us into tomorrow. Thanks to each wave of new arrivals to this land of opportunity, we’re a nation forever young, forever bursting with energy and new ideas, and always leading the world to the next frontier. This quality is vital to our future as a nation. If we ever closed the door to new Americans, our leadership in the world would soon be lost. ”
As we plan our meeting and events, we are now seeing more audiences that have more attendees from Canada and Mexico as the North American Region is leading the way.
