Monterrey vs America: A Tale of Two Cities' Economic Symbiosis

Monterrey, the manufacturing and export powerhouse of Mexico, and the United States, one of the world's largest economies, have a profound economic relationship.

The North American Free Trade Agreement (NAFTA)

While the ongoing debate surrounding the 2017 rebranding of NAFTA as the United States-Mexico-Canada Agreement (USMCA) dominates headlines, it's essential to examine the historic context of trade between Monterrey and America.

Origins & Early Years

The geographical location of Monterrey on Mexico's northeast border made it an attractive gateway for importing and exporting goods to and from the United States. By the mid-20th century, Monterrey had become a hub for international trade, thanks to the presence of U.S.-owned factories, such as General Motors, which began manufacturing cars in the city in the 1930s.

GM's investment in Monterrey accelerated the growth of the Mexican manufacturing sector, particularly in the automotive and electronics industries. As the North American economy expanded, Monterrey's strategic location allowed it to capitalize on the increased demand for goods and services.

NAFTA, signed into law on January 1, 1994, solidified Mexico's position as a significant trade partner with the United States, Canada, and, subsequently, with Central American countries. The agreement aimed to eliminate trade barriers and streamline border crossings, empowering companies like Dell, Ford, and Whirlpool to reorient their production strategies to Monterrey.

**Benefits for Both Sides: What Sources Say**

According to a study by the Perryman Group, for every dollar invested in U.S. jobs and infrastructure related to trade with Mexico, the U.S. economy gains three more dollars. One side-effect of NAFTA was the rise in bilateral trade: U.S. exports to Mexico increased over 400% between 1994 and 2005, while U.S. imports from Mexico grew by over 250% in the same period. Sources indicate that for every dollar invested in U.S. jobs and infrastructure related to trade with Mexico, the U.S. economy gains three more dollars.