Mexico and the World
Vol. 2, No 4 (Fall 1997)
http://www.profmex.org/mexicoandtheworld/volume2/4fall97/Wsintro.html

INTRODUCTION 

by Clint E. Smith*

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* Senior Research Scholar, Institute for International Studies, Stanford University. 

This book provides one of the first opportunities to examine how, some three years after the North American Free Trade Agreement went into effect, some cities and regions in North America are meeting the myriad challenges of growth and development in an e ra of growing globalization. The purpose of this book is to offer a wide range of views from leading experts in the regions under study on this exciting and emerging subject.

The authors were asked to raise critical questions and issues related to the current trend toward regional-based growth and development rather than to seek, at this early stage, any definitive answers. But they do offer rich and insightful descriptions o f the ways in which both intra-national and transboundary regions are working collaboratively to resolve regional issues in such areas as sustainable growth, the environment, improving community education and cultural values, and preparing for the future.

The phenomena described in this volume need to be observed within the context of the growing influence of NAFTA, which came into effect in January 1994. While NAFTA is not, of course, a significant factor in the giant U.S. economy, its conditions can and have had impacts, both favorable and unfavorable, on individuals, firms, and regions in the U.S. The impact of NAFTA on Mexico and Canada, while still not critical, is relatively more noticeable. It thus becomes a regional challenge to try to make glob alization a positive factor in terms of sustainable community development.

This has tended to occur with more success when these communities have been able to strengthen their roles in the world market place, often through collaborative efforts involving public and private sector policy makers and other opinion leaders, whether focused on a given region in one country (e.g. Silicon Valley, Chapter 8) or transboundary political and economic cooperation (e.g. Cascadia, Chapter 2). Each of the case studies presented in this volume is unique. However, by taking a close look at each case, the careful reader can discern an emerging pattern of how very different cities and regions in North America are facing the common problem of optimizing economic development in an increasingly interdependent global economy.

The first chapter of this volume, written by Professor Clark W. Reynolds of Stanford University, sets the broad theoretical framework for the political economy of open regionalism on which much of the rest of the volume is based. The problems of asymmetr ical integration, that is, integration amongst regions that "exhibit widely different levels of income, productivity, and social access" is addressed. Of equal importance is the chapter's analysis of changing technology, finance and investment, trade, social and administrative institutions, and politics, in the framework of what the author calls the open economic regional development model.

Three leading Canadian academics, all closely involved in the enterprise, report in the second chapter of the volume on a pioneer transboundary effort taking place in the Pacific Northwest. Professors Alan F. J. Artibise, University of British Columbia, and Bradly J. Condon and Warren Gill from Simon Fraser University, discuss the "shared visions and strategic alliances" which comprise Cascadia.

This chapter focuses, then, on ongoing integration and the potential for its intensification in the Cascadia region, which corresponds roughly to the Canadian province of British Columbia, Washington, and the northern part of Oregon. The area has retained region-wide links in spite of the nation-state boundary that has divided it since 1846. Although the pressures of nation-building in two different countries led for a while to some distancing of the two halves of the once unified region, the trend is now reversed, and there are strong pressures leading to Cascadia's economic and social integration.

It is almost natural, the authors note, that the region function as one. Its identity and unity are in part due to continuities in the environment, and its traditional frontier-like isolation--caused by a mountain barrier--has resulted in greater north-so uth communication and economic links between regional cities across the US-Canada border (e.g. Vancouver-Victoria and Seattle-Tacoma), than between those same cities and others in their respective nation-states. Together, environmental continuity and fron tier isolation have contributed to important regional economic and political similarities across the nation-state border. These include the industrial base (harvesting and processing of natural resources, mainly timber) and the pattern of unionization (B ritish Columbia and the US Pacific Northwest are the most highly unionized regions in their respective countries). In addition, there has been much cross-settlement in the region by nationals of either country. The evolving economic base centers around so ftware--computer software in Seattle (e.g. Microsoft), and entertainment software in Vancouver--as well as tourism throughout the region, e.g., regional organizations have emerged to improve regional trade and tourism linkages through collaborative rather than competitive approaches to attracting tourism to Cascadia..

In their chapter, the authors analyze each of the cities and sub-regions which comprise Cascadia in terms of economic and cultural characteristics, with special emphasis to intra-regional and international trade links. This is followed by a discussion of how trade within the region, and the international competitiveness of the region as a whole can be improved. State and provincial trade barriers, the impact of NAFTA, and the Canadian Agreement on Internal Trade (CAIT), are all examined.

Whereas the initial thrust for cooperation in Cascadia was for solving environmental, physical, and man-made infrastructure issues, economic cooperation and development, including tourism, soon followed as objectives. To quote from a report by the Intern ational Center for Sustainable Cities, "In recent years the concept of closer cooperation within the Cascadia region has become increasingly popular. As nations have responded to the restructuring of the global economy, natural regional alliances ha ve been stimulated . In a North American context for example, the U.S. Pacific Northwest/Alaska is a small player. If that regional market is expanded to include British Columbia and Alberta, however, it then ranks as one of the largest in North America . On an international scale the same principle applies. The two nations and the two regions can bring complementary strengths to the international marketplace."

Chapter Three provides a rich contrast to the preceding chapter on Cascadia. Professor Paul Ganster, San Diego State University, is the senior author of this chapter, which includes as co-authors academics and policy analysts from his own institution as well as the Universidad de Baja California and El Colegio de la Frontera Norte, both located in the Tijuana region.

This chapter focuses on the San Diego-Tijuana region. Where the different areas that comprise Cascadia are characterized overwhelmingly by their "symmetry" (similar standards of living, comparable effects on each other's economies), the Mexican and American sides of the San Diego-Tijuana region mostly exhibit "asymmetry". As a region, it is embedded in the larger economic area that is the Ventura-Ensenada corridor, that is, stretching from the southern Los Angeles suburbs to the develo ping region south of Tijuana in Baja California. This corridor is becoming increasingly integrated economically and culturally, as well as developing similar problems related to urban management, environmental protection, and transportation that are incr easingly shared across the border. While this integration might not be accepted by xenophobic elements in either country, it constitutes a clear, present, and growing reality.

There are considerable challenges to the effective integration of this economic region. The chapter examines the asymmetries across the international border: differences in the labor market, in the patterns of urbanization, and in the economic bases and p erformances.

At the same time, there are key similarities, for example, high rates of economic and urban growth, a dollarized economy even south of the border, and common transportation and environmental dilemmas that would benefit from region-wide solutions. The com plementarities are interesting and important: Tijuana is a source of cheap labor--both legal and illegal--for San Diego; San Diego is a source of jobs and quality education for Tijuana; Tijuana is a source of cheap housing for San Diego; and so on.

Finding region-wide solutions is a challenge because two very different political systems and cultures meet at the border. Given the vagaries of the Mexican political scene, there is too much administrative turn-over at the local level in Tijuana for the effective crafting of long term policies that efficient transboundary cooperation requires. Moreover, Mexico is highly centralized whereas the US has a well-functioning federal system with greater local autonomy. This means that local responsibilities in the San Diego area are sometimes state or even federal responsibilities south of the border. Another problem stems from the fact that decisions concerning the border region are often made arbitrarily in Mexico City, making Tijuana a political pawn. The chapter concludes with an examination both from U.S. and Mexican perspectives of an examination of efforts so far at transborder cooperation, and explores the possibilities for the creation of more effective transborder institutions.

The following chapter addresses a region located entirely within Mexico: essentially, the Mexican state of Oaxaca. The authors, Professor Raul Livas from the Instituto Autonomo de Mexico and Rafael Gamboa from U.C. Berkeley, analyze the likely effects of the decentralization of expenditures in Mexico from the federal to the state level. Decentralization is likely to lead to a shift from social to productive investments given the different priorities held by federal and state administrative bodies. The so uthwestern state of Oaxaca serves as a particularly illuminating case given that the changes will likely be more dramatic here than in other states.

This is because Oaxaca is very poor, and hence enjoys disproportionate social investments of the kind that wane when state-level administrative bodies become able to allocate funds as they see fit.

The chapter further examines the problem of