by Antonio Garza
Texas has worked for many years to cultivate greater private sector opportunity. We’ve gotten a lot of things right, as a look at the most recent report from the Dallas Federal Reserve makes clear. But with the profound process of change now underway in Mexico, the competitive dynamics of our region, and very possibly of the global economy as a whole, will shift. That means it’s imperative that Texans look beyond the good news of today and prepare for the challenges — and opportunities — of tomorrow.
Mexico’s historic reforms, including the much talked about energy sector opening, will recast its economy. The bonds Mexico shares with Texas are sure to deepen and grow more complex, a fact that should compel state policymakers here to address issues that are important to our own economic vitality and competitiveness.
Mexico is working to implement a host of reform measures, and there’s a lot to do, from creating institutions, to developing complex regulations, to putting in place many new procedures and processes. Human capital development is also a high priority and will require collaboration across the country’s public and private sectors.
Despite the challenges, there is ample cause for optimism. The U.S. applauds Mexico’s strong move to further liberalize its economy and introduce reforms that encourage business growth and job creation. Mexico’s actions also reaffirm the values and partnership the country shares with its North American neighbors: respect for democracy and the rule of law; belief in economic and social justice and the power of a vibrant middle class; and a staunch commitment to free trade and investment.
Based on 20 years of progress under the North American Free Trade Agreement, most Texans recognize that Mexico’s reforms will support and further develop the transnational supply chains that are making North American manufacturing more competitive in global markets. They also understand that the reforms will help integrate the region’s energy markets and ensure they operate with the efficiency and certainty that can propel North America into position as the world’s energy powerhouse.
Texas will be on the front lines of the changes its neighbor’s reforms will bring. The positive spillover effects of Mexico building its economic edge and moving further up the global value chain will be significant. And progress at the federal level on immigration and trade policy also will be hugely beneficial.
Here in Texas, we also need to make headway in a number of key areas. In addition to addressing basic issues such as water and transportation, our leaders need to focus on creating an environment in which ideas and innovation flourish.
Making that happen will require that Texas leaders make education the state’s No. 1 priority. Texas’ population boom and impending demographic sea change demand that we do more to ensure that all our residents are prepared to fully participate in and contribute to the state’s economic progress. Mexico’s reforms lend an even greater urgency to that need.
Our neighbor has powered its move up the manufacturing value chain by producing engineers and well-trained technical workers. The country’s thriving automotive and aeronautics industries are proof of the success of its model. And just as Mexico has forged its path forward, Texas must move up to keep its economic synergies and complementarities with Mexico intact as well as to advance our own competitive position in the global economy.
The dynamic and knowledge-intensive economy Texas needs to maintain and nourish will require significant and sustained investments in public education. A large portion of that investment must be directed toward universities, in particular Tier One institutions that conduct cutting-edge R&D and serve as engines of innovation as well as magnets for human talent.
Texas is engaged in a national, regional and global competition for innovation and competitive advantage. More than ever, economic progress and social advancement depend on education and research. Only by focusing on these issues will we be able to marry the very best of what’s transpiring in Mexico with the very best of what’s possible in Texas.
Antonio Garza is a former U.S. ambassador to Mexico under George W. Bush.
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