China economy hurts Mexico manufacturing employment

Mexican President Vincente Fox came to the U.S. this past summer in an attempt to bolster trade relations between the two NAFTA partners. The loss of manufacturing jobs in Mexico as U.S-based companies shutter "maquiladora" facilities—cross-border assembly plants—and shift production to China is of grave concern to Fox.

Cross-border trade between Arizona and Mexico is a case-in-point. Mexico remains Arizona's No. 1 trading partner. However, Arizona's exports to China grew 168 percent in 2002, while those to Mexico decreased by 15 percent. In 2003, exports to China continued to grow—95 percent—compared with only 6-percent growth to Mexico. Thus, China is today fourth on the list of Arizona trade partners after having been 17^th as recently as 2001. Recent loss to China of 6,000 jobs in the Mexico state of Sonora, which borders Arizona, has Mexican and some Arizona state officials working to strengthen the cross-border ties.

Michelle Pino, director of the Arizona State University Research Park and a top state economic developer, was cited in a recent news story as saying that Mexico does offer advantages to U.S. companies wherein quicker delivery and a shorter supply chain are priorities. But she and others also concede that exports associated with the state's top growth sectors—aerospace and biotechnology—are not as well suited there as elsewhere, like Europe and Asia.