Gov. Davis, Mexico’s Fox Explore New Ways to Boost Cooperation

Gov. Gray Davis and Mexican President-elect Vicente Fox brainstormed Friday on ways to leverage booming trade links between California and Mexico into solutions for problems such as Mexico’s nationwide water shortage.

Davis and Fox met for breakfast at a Los Angeles hotel and said later that they had agreed to meet twice a year after Fox takes office Dec. 1. And they promised to lead business missions to each other’s turf within months to expand cross-border trade. Mexico overtook Japan last year as California’s most important export market.

Fox said he would look to California companies with expertise in water management and technology to help address his nation’s water problems.

Fox called lack of adequate water supplies in Mexico “a question of national security; water is more important to us than oil, and certainly California is a vanguard state” in water management.

“In Mexico we are going to need a great amount of investment and a great deal of technology for city water systems, industrial water supplies and for agriculture. These will be issues for us next year,” Fox said.

The two leaders explored a range of opportunities for cross-border cooperation.

While photographers snapped pictures, Fox explained to Davis plans for a program in which the Mexican government would match investments that migrants living in the United States send back to their native communities in Mexico.

Fox told reporters he hoped to work with California on education initiatives, which he has vowed to make the cornerstone of his administration.

Davis added, “We both have the same dream, which is to improve the standard of living of our people on both sides of the border.”

A major focus was cross-border trade. Fox said he would visit Silicon Valley to look for opportunities to expand high-tech manufacturing in Mexico. Beyond the assembly plants clustered in Mexican border states, the west-central state of Jalisco has become Mexico’s technology center, with companies such as IBM and Hewlett-Packard erecting huge factories.

In eclipsing Japan as the state’s biggest export market last year, Mexico bought $14.9 billion worth of California goods. Douglas Smurr, head of the California Trade Office in Mexico City--the state’s largest foreign office--said this week that California exports to Mexico grew 34.5% in the first six months of this year over the year-earlier period and that the total should exceed $17 billion for all of 2000.

Since the North American Free Trade Agreement took effect in 1994, California’s trade with Mexico has increased 129%, Smurr said.

He also said California’s direct investment in Mexico has grown to more than $10 billion, but that total Mexican investment in California stood at just $504 million. He said the state office was pushing Mexican firms to invest in California to exploit strong brand-awareness of Mexican products.