Mexico and the United States have spent the last 25 plus years developing more interdependent economies. Investing in integrated North American supply chains has enhanced our economic resilience. During this pandemic, our interdependence is our strength.
The transition to an integrated region has not always been easy. I have a vivid memory of watching the asparagus fields in my hometown of Gonzales, California (sister city to San Jose de Tateposco, Jalisco) shift out of production partly because of the enactment of NAFTA. At the same time, I observed almost instantaneous movement of capital across borders to invest in Mexico’s food and agriculture industry and to build an integrated fresh produce supply chain. The benefits are well-proven for both our nations.
Job creation has resulted on both sides of the border from integration. For agriculture and food, the industry in the US has become broadly dependent on a skilled labor force from Mexico, and temporary migrant workers and immigrants comprise over 70 percent of U.S. farmworkers and 40 percent of U.S. food packers. Our citizens and businesses continue working to feed people on both sides of the border during this pandemic.
The soon-to-be-implemented USMCA reinforces the realities that our countries cannot afford to unravel our connectivity. Yet with the pandemic taking its toll on our economies, there are vocal critics of having essential supplies such as healthcare products and food produced across borders. Companies come under attack for not considering the national security implications, including health risks, of foreign production.
The ability of our supply chain to deliver in times of crisis is not a question of whether the product is produced in Mexico or the US, it is one of: Can our governments work together to ensure greater coordination? Uncoordinated actions such as shutting critical production facilities without discussion of the cross border implications, putting up walls, limiting legal immigration, and unduly hindering cross border movement of goods and services only exacerbates the crisis.
For example, just last week some in the U.S. Congress called for action to stop food coming into the US from Central America because these imports compete with domestic production. Simply shutting down food trade from Central America will not help the U.S. or Mexico economically, or regarding migration. Both countries have a shared interest in advancing short and long-term economic prosperity and security in Central America. When their economies provide opportunities for their people, they have no need to migrate to Mexico or further into the United States for a better life. We should coordinate now on keeping those trade flows moving and on problem-solving for diverting excess production to food banks in both the United States, Mexico and Central America. We can move excess supplies across borders, in both directions, in times of crisis. We simply need to work together.
I offer we should review our past successes at addressing our supply chain. Those who call for action to halt supply chains are not asking what the situation would look like if we had not worked to integrate those chains, deliver just-in-time (JIT) inputs, achieve scale, and lower the overall cost of production for critical supplies. Where would we be now without these investments across borders? While we have much more work to do to incorporate local supply into the system, address outstanding social justice issues in the supply chain, and produce strategic stock reserves for crisis preparedness beyond JIT, we would be in an extremely vulnerable situation had we not linked across borders.
Instead of looking at our bilateral situation as one of a quid-pro-quo on a product-by-product basis, we need to take a holistic approach to creating cross border supply networks and planning for the longer term. We need government, industry, and civil society to envision competitive North American industries that create resilience on both sides of the border. Coordinating before a crisis happens is a big part of the solution to avoid supply chain bottlenecks.
From my many years of observation and participation in these critical areas, I suggest the formation this month of a Mexico-US cross-border readiness task force composed of key members of the Mexican and US private sector, academia, labor, non-government organizations, community leaders, and of course federal and state government that jointly addresses the continued preparedness of the Mexico-US supply chain to external shocks.
COVID19 is a crisis like we have not experienced before. Unfortunately, it will not be our only crisis. Let us use this pandemic wisely by reinforcing our economic interdependence. Through this interdependence, both countries can sustainably raise standards of living across the region and build more resilient societies, societies that can be strong and continue to advance in the face of any crisis.
* Devry Boughner Vorwerk is the CEO of DevryBV Sustainable Strategies and a Board Member of The US-Mexico Foundation. She is former Corporate Vice President and Head of Global Corporate Affairs at Cargill. The US-Mexico Foundation is a binational non-profit organization dedicated to fostering bilateral cooperation and improving the understanding between the United States and Mexico by activating key people in the relationship that once were dormant. Twitter: @usmexicofound
