PERSPECTIVE ON FREE TRADE : Mexican Businesses Are Coming : The capital flight of the 1980s has given way to entrepreneurship with an international outlook.

The year was 1985 and the subject of the interview, a wealthy Mexican resident of the infamous “Taco Towers” that line the Coronado Peninsula shores, summed up the prevalent mood among Mexicans living in San Diego in one sentence: “We want to buy back California.”

He was one of many Mexicans who, fearful of the economic uncertainty pervasive during the 1970s and early ‘80s and stung by severe devaluation of the peso, had taken between $30 billion and $60 billion out of the country.

That money came mostly to the United States, much of it to the Southwest. Los Angeles and San Diego; Tuscon; Albuquerque, N.M.; Vail, Colo.; El Paso, Dallas, Houston, San Antonio, Padre Island and Brownsville in Texas--all experienced an economic bonanza that was due in part to the infusion of Mexican capital. The “post-devaluation exiles” were moving money into real estate and border banks. They were buying little stores and mini-malls. In San Antonio, there was a law firm that represented about 2,000 wealthy Mexicans who invested more than $15 million in the United States in just two years, from 1983 to 1985.

By 1986, Mexico’s financial crisis was getting worse. To encourage capital return, bank interest rates went ridiculously high and credit got very tight. Mexican money began to return home, economic activity slowed, and both sides of the border experienced the impoverishing effects.

Many experts have suggested that a resurgence of economic activity in the Mexican side is good news on the U.S. side of the border, and the hope is that the free-trade agreement could give Mexican prosperity a big boost.

With the radical transformation of the Mexican economy, begun in 1983, exporting goods became a priority. From 1982 to ‘89, exports of non-petroleum products increased 20% annually. Mexico now exports automobiles, chemicals, engines, iron and steel, mining and metallurgic products, glass, cement and--more important for its effect on Mexican-Americans--subsidiaries of Mexican firms.

Since 1989 there has been virtually no capital flight from Mexico. There is, however, a very interesting new trend that we should consider within the framework of discussion on the effects of the free-trade agreement: More and more Mexican companies are creating or expanding their businesses in the United States. From communications to tortillas, from beer to road-building, from chiles to sophisticated technology to preserve food, the Mexicans are coming!

Back in 1984, Corona’s share of the U.S. imported-beer market was 1.6%; three years later it was 19.2%. Corona is now the second-ranked imported beer in the United States, first in Canada, Australia and New Zealand; third in Japan. And Corona is not alone in this bonanza; the sales of Tecate beer in 1990 improved 17% over 1989 and it is now the eighth imported beer in sales here.

ICA, Associated Civil Engineers, is a complex of 140 Mexican companies that employs more than 70,000 people to build bridges, industrial complexes, airports, antennas for NASA, oil-drilling platforms, hotels and tourist centers. It has offices in Europe, the Middle East, Latin America, China and Florida. It is a prime example of today’s Mexican entrepreneurship, which already has a global outlook and would be enhanced by a North American free-trade zone.

However, the best example of the possible effects of the expanded trade is in the food sector, and no other product illustrates the point as well as the tortilla. Less than 10 years ago the tortilla market here was very small, primarily covering East Los Angeles. Now, I doubt there is any supermarket south of Bakersfield that doesn’t carry tortillas. As one businessman explained to me, “In the old days, we made money selling 10 tortillas very expensively; now, the business is to sell cheaply more than a hundred.”

The enormous growth of this market is due to a few Mexican entrepreneurs who opened the market for the tortilla and for Mexican food in general, nationally. In 1980 there were about six Mexican restaurants in a Mexican neighborhood like Huntington Park. Try to count them now.

These are only three examples of the dozens of Mexican businesses that are expanding into the United States. They are demonstrating new levels of intelligence, audacity, guts and education, and they bring a modern version of Mexican nationalism that buries the traditional resentment against the United States and Mexican-Americans, and substitutes it with a new spirit of understanding and cooperation.

Here, close to the border, we know that the traditional stereotypes no longer apply. Just imagine what will happen if the partnership between Mexicans and Mexican-Americans is nurtured through a free-trade agreement. Can anyone not profit?