WACO, Texas – There would be substantial benefits if border states enhanced economic integration, according to The Perryman Group.
“Millions of jobs can be gained if integration can be enhanced, improving quality of life on both sides of the border,” the group’s study states.
The Perryman Group is an economic and financial analysis firm based in Waco, Texas. Its study notes that the U.S.-Mexico border region “is facing both enormous opportunities and unprecedented challenges, many of which are political and institutional in nature.”
Details of the group’s study are contained in The Perryman Report & Texas Letter. The study was conducted on behalf of the Mexican and Americans Thinking Together (MATT) Foundation.
The feature is titled: Bordernomics: Enhancing Prosperity by Increasing Integration in the US-Mexico Border Region.
The Perryman Group said it studied the economy of the U.S.-Mexico border region “in order to improve understanding of regional dynamics and identify actions which could generate meaningful improvement in prosperity and quality of life on both sides of the border.”
The study points out that the U.S. and Mexico are already major trading partners. However, The Perryman Group argues that there is still substantial potential to increase trade to the benefit of both sides of the border.
“There is substantial unexploited trade potential within the border area which may be captured without any adverse impact on trade with other areas and would only occur if it were economically efficient,” the group states.
For the 10 U.S. and Mexican states along the border as a group, The Perryman Group estimates that incremental business activity from a one-unit improvement in the Economic Integration Index would lead to gains in business activity including an estimated $175.1 billion in annual expenditures, $75.1 billion in annual gross product, $42.8 billion in annual personal income, and nearly 798,400 jobs.”
The benefits of a two-unit improvement would be more than twice as large.
Gains to the four U.S. border states (as a group) from enhanced integration could be expected to include annual benefits of $164.9 billion in expenditures, $69.3 billion in gross product, and $39.8 billion in personal income.
The study’s conclusion states:
The U.S.-Mexico Border region is a vibrant community of people and businesses with strong ties and deep connections dating back centuries. Increasing economic integration (and therefore trade and the resultant economic benefits) involves taking advantage of potential synergies and working together to resolve shared problems.
Key opportunities for and challenges to enhancing trade between the US and Mexico were identified based on both the qualitative and quantitative aspects of this assessment. Research revealed common themes in studies of trade potential and barriers to further growth, and focus groups provided additional information. The Perryman Group’s modeling efforts also identified industries where trade could more readily be enhanced based on export potential and import requirements.
Future growth is possible in both traditional areas of trade and new arenas. Challenges include, among others, uncertainty over the future of NAFTA and the need for infrastructure improvements. By working together to address challenges faced by both nations, outcomes can be improved for all.
Cooperation and enhanced integration has the potential to create jobs, increase opportunities, and provide resources needed to deal with challenges. Future prosperity depends on a proactive approach and the realization that optimal economic growth in both the United States and Mexico can only be achieved through integration.
For more information about the study, contact Irene Oquendo at [email protected]
