I'm the director of the undergraduate international business program

and Professor of Economics at San Diego State University.

I want to thank IBERO for the opportunity to be here today

and to speak to a audience on the border about the border.

Something that has occupied my attention and a lot of my research

and interest for a number of years.

What I would like to do first is contextualize a bit

the economy of the border and then

I have three points that I want to make

which I think are not part of the discourse about the border,

but should be part of that discourse.

So let me first start by contextualizing a little bit

the three points that I want to make.

The context I want to draw is these two extremes

that we hear about San Diego - Tijuana,

US-Mexico border region.

One extreme - nationalism, the other extreme - globalism.

We have people in both those positions,

the extreme nationalists and the extreme globalists.

The nationalists operate out of a way of thinking

that probably goes back to the 1950's or the 1960's.

The cold war, the nation state as the unit of analysis.

There is Mexico, there is the United States,

two sovereign nations, two separate independent entities.

Yes, some interaction,

but these are very different places

with very different reasons for existence,

with very different ideas, cultures, societies and so forth.

Not a lot of overlap in the nationalist view,

not a lot of need for overlap in that view.

So, I say to those people

if that's the way you think then come to Fashion Valley

and wander around a bit and listen to the people

that you hear there.

Or better yet come near where I live

on El Cajon Blv. there's a market, Pancho Villa's farmers market,

where you can get mangos and 15 kinds of chilles.

You will see that this hard fast line between the United States and Mexico

isn't quite like you might think that it is.

Now most of you are here in a border audience in some sense

and probably not many of you think like that is my guess.

I mean I do find that way of thinking quite a bit

on the other side of the border, in the United States.

But the nationalists have a point.

There is a point to what they are saying

and if you think that there isn't then do the following exercise

which is something I like to do.

It tells me a lot about the border,

go to Fashion Valley, go to Nordstrom's or Macy's

and when you go to buy, whatever it is you are going to buy,

you take out your wallet,

innocent face, very straight, and you say,

"Uh, do you take pesos?"

(Laughter)

Here is what happens, they look at you and think,

"Oh, this person is joking or something."

So you keep a straight face, very innocent and say,

"Oh OK, you don't take pesos.

I just ask because I was in Tijuana yesterday

and they take dollars so I thought you might take pesos."

(Laughter)

Then they are a little bit disgusted by that thought.

Actually, just parenthetically, let me say

I think this is a real opportunity for businesses in San Diego.

I think it would be smart of them to take pesos for a variety of reasons.

They would benefit form that.

Ok, so you continue this little dialogue

because it tells you a lot about how some people think about the border.

This should be a cautionary tale for globalists,

for the people who think the world is flat,

for people that think there is really no difference,

we are one integrated area.

You ask this person who's told you that they don't take pesos

and are getting a little bit impatient,

but you keep insisting, and you say,

"I just thought maybe because we are so close to the border

that you might take pesos."

And sometimes you get the following response:

"We are not near the border! Thats way far from here!"

You know, fifteen miles.

(Laughter)

But this tells you about how many people look at San Diego/Tijuana.

It tells you a lot.

It's a barometer of some part of the population's perspective.

OK, so we've got the nationalists, we've got the globalists,

this is the context of the border.

We're somewhere in between.

We are not 100% separate with soley national concerns,

but nor are we a flat world

in which there is no differences

between San Diego and Tijuana and everyone has the same opportunities

and the same advantages on both sides of the border.

Thats not an accurate description either.

Many people live in San Diego and never think about the border,

and the idea to them is slightly absurd to think about it.

That's just the reality that we face.

OK, that's the context.

Now, three points that I want to make about this

that I think are not part of the national discourse

either in Mexico or the Unites States

that should be part of our discourse.

The fist point is geographic, the second point is political

and the third point is social.

So geography, economic integration between

the United States and Mexico is a border phenomenon.

It's not a national phenomenon,

it's not happening uniformly, equally spread throughout the United States

uniformly equally spread throughout Mexico.

It's happening at the border.

We know this for a variety of reasons,

there are empirical measurements of this, we understand this completely.

If you look for example at how we measure economic integration.

One of the ways, trade flows.

Mexico doesn't keep statistics on the state origin of its exports.

Mexico measures exports,

but you don't really know if they were produced in

Sonora or Durango or what state.

Ciudad de Mexico or wherever.

But the US has those statistics and what we know is this,

over 60% of all US exports to Mexico originate in the four border states.

Texas, California primarily, but also Arizona secondarily,

and a tiny amount in New Mexico.

So our trade, at least as measured by US exports, is coming from border states.

This is the origin of these goods,

not just that these goods pass through those states,

but its the origin of where those goods are produced

and then sent to Mexico. So that's trade.

Migration.

We know that 1 in 10 Mexicans, approximately, lives in the United States.

They are spread out,

but 2/3 of them live in the four border states.

They are still highly concentrated,

your compatriots are highly concentrated

in California, Texas, Arizona and New Mexico.

A border phenomenon,

movement of people is one of the ways

in which we understand this degree of integration

between two nations.

And that movement is a border phenomenon.

It's mirrored, we don't have good statistics,

by what I like to jokingly refer to as "the anti-re-conquista."

Which is all the Americans that are buying condos in Baja and elsewhere

and this is mirror image of that.

The same phenomena is happening

there is a concentration of Americans who are not migrants, not tourists,

they don't really fall into any social science category,

but they have property

and they are allocating an important part of their lives in the border region.

Foreign direct investment is something else we can look at

when we talk about economic integration.

In most US foreign investment into Mexico

goes to Mexico City.

It varies by year, but it's about half sometimes as much as 60% Mexico City,

most of it goes there.

So if you take that 40-45% that's left,

the vast majority of that goes to the border states.

To the six Mexican sates on the border.

So investment, foreign investment is consistent with these other facts

about integration.

Integration has a place,

it's not a general national phenomena.

It has a place, the place is the border.

This is a reason why we border residents should be quite concerned about.

It effects us far more than it effects the rest of Mexico

or the rest of the United States.

That's the geography.

Ok let me talk a little about the politics.

This integration that we are seeing is not the result of national agreements

signed between the United States and Mexico,

it's not due to NAFTA.

It's not due to these pieces of paper

which have the signatures of important people

in the United States and Mexico.

It's due to the activities and actions

of everyday people living in the border region.

Business people, students, families, citizens

going about their daily lives

in what seems to them a reasonable normal way,

that's what's creating this integration.

If you look at the growth of the maquiladora industry, for example

or the growth of trade between the United States and Mexico.

There is no structural break,

that is, there is no change in the trajectory,

in the pattern that happens after NAFTA.

NAFTA didn't suddenly create this,

it was going on before that

and it's continued to go on after that

in spite of a number of very serious difficulties that stand in our way.

Jeffery Davidow was the US ambassador to Mexico from the United States

under the last two years of the Zedillo administration,

which was the last two years of the Clinton administration.

And the first two years of the Fox administration

which was the first two years of the Bush administration.

He wrote a book about his experiences

the book is a fun read, it's called "The Bear and the Porcupine."

You guys are the porcupine we are the bear.

(Laughter)

I'll leave it to you to unravel that metaphor a little bit.

But I decided one year I was going to use this book

in a class I teach.

So I am looking at the chapters and I am trying -- Ok, so what's this chapter about and

I am writing next to each chapter what the dominant theme is.

There is, I dont know, 15 chapters or something like that

and I get down and I look at my list and there is two subjects,

that is it.

Every chapter was on one of two things: drugs, migration.

That is what the national governments are thinking about!

This is the US ambassador to Mexico,

this is where he spent his time,

these are the issues that he worked on.

This reflects US actions, thoughts,

attitudes towards Mexico.

What is important?

What does the national political scene have to deal with?

What's its focus?

It's not all of this integration that's going on in the border region.

It's not that.

It's drugs and migration,

those are the two things.

So this migration is really the result of all kinds of --

or this integration is the result of all kinds of actions

by individuals, by organizations.

You can name your own favorites,

but there is civil society organizations like VIA International

or the International Community Foundation --

There are universities that have dual degree programs.

The program I direct has dual degree programs

with CETYS and UABC in Tijuana.

So we have students two years here two years there,

they get degrees from both places.

It's the result of churches which have --

a church in San Diego and a church in Tijuana, it's quite common.

It's the result of families which live on both sides of the broder.

This is what is driving this integration.