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(as prepared for delivery)
October 21, 2004
San Antonio, Texas
It's good to be home! I'd like to thank the World Affairs Council of San Antonio for inviting me here as part of its Distinguished Speakers Series. I really appreciate the opportunity to speak today, although I must admit it's a little intimidating talking about a topic this group knows so well.
First, Tom Frost, thank you for that kind introduction. I want to express my gratitude to you for your longstanding commitment to the U.S. relationship with Mexico, and for your recently-completed service as a board member of the U.S. Mexico-Fulbright Commission.
I also want to congratulate the National Autonomous University of Mexico (UNAM) for its 60 years of history in San Antonio. I have to tell you I was surprised to find out it's been here that long! This shows how far-sighted UNAM has been in appreciating the integration and convergence between Mexico and Texas -- and the role that a great university can play in contributing to that relationship. Not only is it Latin America's largest university, it's also the oldest -- dating back to 1551.
Early this year, I signed an agreement with UNAM’s rector, Ramon de la Fuente establishing the Henry David Thoreau Chair in Multidisciplinary Studies. Many of you know Professor de la Fuente, but for those of you who just heard him for the first time, I'm sure you'll agree he's a man of vision. I particularly applaud his leadership in advocating greater investment in education, science and technology to improve Mexico's competitiveness.
Long-time Mexico watchers will appreciate the significance of the creation of the Henry David Thoreau Chair – in many ways illustrative of how much deeper and mature the US-Mexico relationship has become. For many years, UNAM was critical of U.S. engagement in Mexico, and I've been told no U.S. Ambassador had visited UNAM's Mexico City campus since the 1960’s. Whether that's absolutely the case or not, that era has passed. Mexico and the U.S. still have disagreements and differences, but none question that our futures are linked and the path to prosperity on both sides of the border is through strengthening mutual understanding and partnership.
But I don't have to tell that to Texans. President Bush has made clear that he considers the security and prosperity of the Western Hemisphere fundamental to the national security and economic interests of the United States.
Texans also recognize NAFTA's role at the core of North American integration. NAFTA has energized and transformed our economies by promoting trade and investment, while improving quality of life, growth, and stability. And it encourages needed reforms, economic diversification, transparency and good governance.
But the fact is our connected economies are seeing increasingly intense competition from others, especially Asia and Europe, as the 21st century progresses. As we look to the future of North American integration, our vision must focus on ensuring that we remain globally competitive, while reducing asymmetries between and within our societies.
North American integration gives us a strong foundation to ensure continued prosperity. Yet NAFTA will mean little in the future if we don't institutionalize the reforms needed to remain competitive.
No doubt the U.S. economy is on the move… President Bush's pro-growth policies have resulted in the creation of over 1.9 million jobs since August 2003, our highest-ever employment in construction and financial services, and record levels of national homeownership, particularly amongst minorities.
But the U.S. record has not been perfect. We haven't moved as quickly as many would have liked on reforming our immigration policy. There are still too many people in our country who think immigration reform is about doing Mexico a favor, when in fact a policy of safe, legal, orderly and humane immigration – such as President Bush proposed earlier this year -- would make the U.S. a stronger and more secure country.
Likewise, the United States cannot make Mexico more economically competitive than it is willing to make itself. Many of you have been following President Fox's administration and the Mexican Congress as it wrestles with energy, fiscal, and labor reforms, as well as those that would result in a more effective judiciary. Americans are familiar with the occasional gridlock that results when the executive and congressional branches are dominated by different parties. This has been the case since President Fox came to power and, while frustrating, these reforms remain top priorities for Mexico's democracy.
Mexico also realizes that it must move quickly to improve its investment climate. Recently, there have been worrisome indications that Mexico has fallen in its attractiveness to investors and overall competitiveness. This concerns not just Mexico, but the wider North American community whose economies are increasingly connected. Capital is cynical and will go where it’s rewarded. More investors will come to Mexico when they know they can operate in a secure, transparent environment, with rational regulations, a more efficient infrastructure, and a lower cost of doing business…
But before you get the impression all is not well, let me tell you about those areas in which Mexico has enjoyed considerable success. In recent years, Mexico's macroeconomic policy has been sound. The country recovered in an impressive fashion from the 1994-95 peso crisis in large part because of its fiscal discipline. In 2003, Transparency International ranked Mexico second only to Chile out of 10 Latin American countries in budget transparency. In 2003-04, the World Economic Forum raised Mexico from 11th to 5th position out of 21 Latin American countries for the quality of its public institutions.
But we cannot ignore that large segments of society are being left behind. Education is the key to assuring that more people share in the prosperity that reform and growth can bring. It begins with primary education and continues through vocational training, higher education, and scientific research and development. In order to compete in the information age, governments must educate their populations to produce knowledge by becoming technology-literate. North America's future lies in developing the creative brain-power of the inventor, the entrepreneur, and the skilled worker who will then bring innovation and technical competency to the modern marketplace.
I’d like to acknowledge a few of those who are working hard to reinforce the promise of education. For example, the State of Texas has more Mexican nationals studying in its universities than any other state, with many enrolled right here at UTSA. It's also great to be able to announce that the North American Development Bank, which has strengthened relations between Mexico and the United States through infrastructure and environmental projects, is also in discussions with the US-Mexico Fulbright Commission to sponsor graduate level Fulbright scholarships for Mexicans and Americans.
But, in order to ensure that our citizens are able to use their educations and realize their dreams, it is critical that we show continued resolve in our fight against terror. What we did by freeing Afghanistan and Iraq was the right thing to do. This doesn't mean we're there yet, but we are working closely with partners to help Iraq transition from years of oppression to democracy and prosperity. And today Afghanistan not only has the most enlightened constitution in the Muslim world, recently it held historic presidential elections. Who was not moved by the sight of a 19-year old Afghan woman casting the first vote?
We are building strong, lasting partnerships that will secure our common North American home against those who would harm our institutions, our economies, our people... Mexico has been a steadfast ally in our day-to-day counter-terrorism and law enforcement efforts and an important partner in the broader War on Terrorism. The events of these past two years serve as a reminder that evolving North American integration extends beyond trade and economics into areas such as law enforcement and counter-terrorism.
The United States is safer when our Hemisphere works together. In Mexico City last year, members of the Organization for American States agreed on a comprehensive approach to address the multi-dimensional threats of the 21st century. Through the OAS as well as bilateral agreements, we are working closely with our hemispheric neighbors to protect our homelands and our citizens against terrorism and organized crime. Our programs are about fighting narcotics, dismantling gangs, combating human smuggling, enhancing border security, and most of all bringing criminals to justice.
Our security is also linked to Latin America's prosperity, and the United States is leading the way to expand economic opportunities across the Hemisphere. One of the best ways to increase prosperity is by breaking down trade barriers, which creates more competitive jobs and lowers prices for consumers. In recent years, the United States has negotiated free trade agreements with Chile, and with the nations of Central America and the Dominican Republic. And an accord with Panama is nearly complete.
Negotiations toward an Andean accord are under way with Colombia, Ecuador, and Peru-- and Bolivia may not be too far behind. We are committed to the ideal of a comprehensive Free Trade Agreement of the Americas (FTAA), and I’m encouraged by a recent compromise reached at the WTO on ending protective subsidies on agricultural products in developed countries; a compromise which could bring enormous benefits to poorer countries and open the way to further regional integration.
The United States has also assisted Latin American economies in trouble. In 2002-03, the U.S. supported a $37 billion IMF package during a turbulent period in Brazil. We secured a $1.5 billion bridge loan to Uruguay while it prepared to restructure its debt. We rallied international support for Colombia, Bolivia, and the Dominican Republic, and also backed Argentina's efforts to stabilize its financial situation. Don't let any one tell you that this Administration hasn't been engaged in Latin America.
In 2002, President Bush announced the Millennium Challenge Account, which substantially increases U.S. development assistance and helps reward sound policies and prevent crises. Bolivia, Honduras, and Nicaragua have been among the first countries to qualify. The United States has also led the global effort to encourage debt relief—which allows countries to better manage debt by making grants, rather than loans, available to responsible democratic governments.
Democracy is the central pillar of security and prosperity in the Americas, which the United States has consistently championed. Today Cuba is the sole, lonely exception in a hemisphere of democracies. Regrettably, the Cuban leadership has stubbornly resisted any movement toward openness, respect for human rights, or fundamental freedoms for its people. In May, President Bush announced his Initiative for a New Cuba, a comprehensive U.S. strategy to assist the Cuban people in hastening the day of freedom.
Throughout the region, U.S. policy aims not only to generate economic opportunity, but also to advocate political and institutional reforms that will more equitably distribute those opportunities. If economic growth is to be lasting and just, the poor must have access to those tools needed to improve their lives. And let me repeat: While there is no doubt in my mind that education is the key, we should all be doing more.
Governments can lead, negotiating free trade agreements and creating more friendly investment climates. But to ensure sustained growth, the private sector must step up, helping to find ways to overcome development barriers, promoting sound host government economic policies, and resisting corruption. One of the best examples of successful public-private cooperation is the Partnership for Prosperity in Mexico, launched by Presidents Fox and Bush in September 2001.
P4P, as it is also known, is a strategic alliance in which the U.S. and Mexican governments act as facilitators to leverage private sector expertise, resources, and commitments to further deepen the ties that connect both countries. P4P has focused attention on developing housing and mortgage markets and led to dramatic reductions in the cost of remittances. From 1999 to 2003, the cost of sending an average $200 remittance from major cities in Texas to Mexico fell by more than half -- from over $30 to less than $15.
In addition, an important U.S.-Mexican agreement now allows the Overseas Private Investment Corporation to offer major programs in Mexico, including fostering investments in education, infrastructure, and the environment, by lending support to Mexican and U.S. businesses with financing and insurance of up to $250 million per project, and supporting Mexican entrepreneurs with an innovative $120 million private equity fund.
If companies wish to remain welcome in the communities in which they work, then they need to actively embrace their responsibilities. For example, in an effort to combat hunger and malnutrition, a local company—HEB--provides time, food, and money to food banks and food rescue organizations not only across Texas but in northern Mexico, as well. This is exactly the kind of corporate stewardship that we need throughout Latin America. Companies that balance responsibilities to their employees and shareholders with responsibilities to the communities in which they operate should recognize that they're doing this not just because it’s good public relations, but because it's good for their bottom lines. Businesses simply cannot succeed in societies that fail.
Markets work when they are allowed to respond to the demands placed on them. As leaders in the public and private sectors, we need to educate our people and continue to remove obstacles to investment and labor mobility. We must fight corruption, arbitrary policies, and the uneven application of the rule of law, which undermines confidence in the marketplace and remains all too common across Latin America.
We also need to be honest about what can happen when markets fail to deliver. If people lose economic hope, they can also lose faith in their public institutions, turning away from both markets and democracy and towards the sort of demagoguery that has too often plagued Latin American countries and limited their horizons and freedoms. This has been the story in Venezuela, where democracy faces a severe test. And it has been the tragedy of Cuba for the past 45 years.
As I stand before this audience, I see current and future leaders in politics, business, and academia. Together, we have a special responsibility to ensure that markets across the Western Hemisphere fulfill the aspirations of all our citizens, and that governments facilitate this effort… and not stand in its way. I know this can be the century of the Americas. I believe that by making the right choices all of our citizens--not just privileged groups within our societies--can enjoy the opportunities of expanded growth.
The President’s vision is of a Hemisphere that is secure, prosperous, and democratic. A Hemisphere that is competitive with the world's strongest economies for as far as we can see into the future. I know that you, too, believe this.
Thank you, and I’ll end as I always do when I’m in this great state by asking that God bless Texas, the United States, and Mexico.
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