Texas-Sized Trade With Mexico Sends Signal to Wary Californians

The Lone Star State sends Mexico nearly half of all US exports, reaping the rewards of historic border ties. Now more Californians want to get their state into the game.

'TEXAS,'' says Neil Whitely-Ross, ''has set an example that California needs to follow.'' Those would normally be fightin' words for anyone from the progressive Golden State. But when the topic is trade with Mexico, and when the speaker is not only president of a major border trade organization but a Californian to boot, then perhaps it's time the bellwether state took notice.

Mr. Whiteley-Ross, vice president of the San Diego Economic Corp. and president of the Border Trade Alliance, says he is merely acknowledging the statistics: Texas has been much more successful at developing trade with Mexico than has California.

He adds that Texas is also ahead of California when it comes to relations with Mexico, thus paving the way for growing commercial ties with Mexico as the world's 13th-largest economy pulls out of last year's deep slump and develops under the North American Free Trade Agreement (NAFTA).

''Californians will always be 50-50 on any issue at any given time, and that includes Mexico,'' Whiteley-Ross says. ''The Texans know how to come together on something, and they've shown it in their relationship with Mexico.''

Nearly half of all US exports to Mexico - now the second-biggest trade partner of the US - are from Texas. California only provides about 15 percent. And although US exports to Mexico fell by about 9 percent last year through September, Texas trade with Mexico was down less - about 7 percent. The state's third-quarter trade figures show trade with Mexico coming back.

Part of the explanation for the Texas-Mexico connection is historical. Texas border counties, with 60 percent Hispanic populations or more, have maintained close ties to their southern neighbor. Those ties have filtered out to the rest of the state.

In California, on the other hand, San Diego developed as a military town that looked west and north, but not south.

The differences are not just historical. Texas governors have long paid special attention to Mexico, and Gov. George W. Bush is no exception. He invited five Mexican governors to his 1995 inauguration, and his first official meeting as governor was with the governors from the four Mexican states bordering Texas. He visited Mexico three times in his first year in office, including an afternoon spent with President Ernesto Zedillo Ponce de Leon.

In addition, Governor Bush has worked to head off attacks on immigrants' rights and affirmative-action programs, in part because he felt they would tarnish Texas's international image. He was also a strong supporter of the $51 billion financial rescue package for Mexico, put together by President Clinton with $20 billion in US funds.

Bush has ''been out front on point issues involving Mexico,'' says Texas Secretary of State Tony Garza, appointed by Bush to focus on border and Mexico issues. ''It's part of seeing Mexico not just as a market and certainly not as an adversary, but as an important partner in developing our future.''

California Gov. Pete Wilson, on the other hand, is best known in Mexico for his support of Proposition 187, the successful 1994 ballot initiative which calls for cutting off the access of illegal immigrants to social and educational services. (In fairness to Mr. Wilson, California has always received far more illegal aliens than Texas.)

''Feedback from [Mexican] officials and business people alike tells us the difference is noted,'' says Bill Kean, international research coordinator for the Texas Department of Commerce.

Economic development officials in Texas say job growth last year in traditionally high-unemployment El Paso taught them again the value of working with Mexico. Much of that job growth came in manufacturing connected to the maquiladora plants that have boomed across the border in Juarez, in Mexico's Chihuahua state, following the peso's devaluation in December 1994. Half of all jobs created in Mexico in 1995 were in Chihuahua state, with El Paso benefitting from a ripple effect.

What opened the eyes of Texans to the possibilities of working with Mexico was the competition for the first Mercedes-Benz auto plant in the US a few years ago. ''Alabama eventually won, but what even had us in the running was the way we looked at things regionally, including Mexico in the supplier pool,'' says Susan Tully, senior Texas Department of Commerce economist.

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