Although recent political rhetoric has drawn a dark cloud of uncertainty around Mexico's manufacturing industry and related U.S. trade, research studies have shown that free trade with Mexico provides overall net benefits for both nations in terms of material value and increased efficiencies.
Today, Mexico is the 3rd largest overall trading partner with the U.S.—only a small margin behind China and Canada. Post-NAFTA trade data analysis shows significant growth in imports and exports of both goods and services. In fact, Mexico has quickly gained ground as the 2nd largest destination for U.S. exports while maintaining the position of 2nd largest origin of imports. This translates positively for the U.S., considering that 40% of the value of imports from Mexico originates in the U.S. compared to 4% of imports from China and 25% from Canada.
The resurgence of manufacturing in Mexico, which now comprises 5,060 operations and a total employee base just under 2.5 million workers, has been driven by its competitive labor force, business-friendly environment and proximity to a growing U.S. consumer market. These factors have drawn firms across diverse industries to collectively invest more than $208 billion in Mexico operations since 1999, where the automotive sector is a clear leader, having accounted for $30 billion of investment since 2010. The revival of manufacturing in Mexico positions Texas, and its industrial markets, for continued expansion given the state's strategic location and ample infrastructure to handle the cross-border flow of goods and services.
Comprehensive estimates show that approximately 5 million U.S. jobs depend on trade with Mexico. California leads the pack with 566,000 trade-dependent payrolls, followed by Texas with 382,000 workers. More importantly, 30 U.S. states, ranging from Washington to Florida, each have more than 50,000 jobs supported by this bilateral trade.
Texas stands to benefit greatly from trade both directly and indirectly because the state accounts for 36% of all international trade with Mexico. Plus, Texas handles an additional 34% through its inland, air and sea ports, creating enhanced economic synergies for its industrial occupiers and logistics supply chain real estate and labor markets. CBRE Research estimates that trade with our southern partner supports roughly 200-270 million sq. ft. of occupied industrial space in Texas, representing a vital 13% to 18% of the 1.5 billion sq. ft. statewide market.
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