MEXICO CITY — When the governor of Colorado came to Mexico on a trade mission this year to see the sights, “one of the most amazing” was a Costco.
“It was as big, clean and modern as any in America,” recalled Gov. John Hickenlooper (D), who found the aisles filled with shoppers bearing “nothing but positive feelings toward the United States.”
Especially toward U.S. stuff.
The Costco was stocked with products stamped “Made in U.S.A.,” including some of the $755 million in goods that Colorado exports to Mexico each year: marbled slabs of steak from Greeley, cans of pinto beans from Holyoke and sacks of russet potatoes out of Monte Vista.
Trade between the United States and Mexico is surging, up 17 percent in 2011 to a record $461 billion, as Mexico vies with China to become America’s second-largest trading partner after Canada. China and the United States did $502 billion in trade last year.
The growing middle class that is fast becoming Mexico’s majority is buying more U.S. goods than ever, while turning Mexico into a more democratic, dynamic and prosperous American ally.
“We are obsessed with China when we ought to seriously focus, for our own benefit, on our neighbor Mexico,” said Robert Pastor, a professor of international relations at American University and author of “The North American Idea.”
While news about headless torsos, drug barons and illegal immigration dominates the headlines, and much of the Obama administration agenda south of the border has focused on law enforcement, economists say another story is one of roaring trade.
“Not only is Mexico doing better, macroeconomically speaking, than the false stereotypes would have us think, Mexico is actually doing better than the United States,” said Richard Fisher, president of the Federal Reserve Bank of Dallas, who applauds Mexico for controlling inflation, balancing budgets and managing debt.
Fisher grew up in Mexico City in the 1950s and remembers a Mexico that “was our soft underbelly, a country of tremendous poverty and horribly bad governments.”
Now Fisher and his peers praise Mexico for pouring billions of pesos into infrastructure, including ports, railroads, refineries and highways.
In the same breath, investors worry about everything Mexico still needs to do: enforce the rule of law, reduce poverty, bust wasteful telephone and media monopolies, open the national oil industry to foreign investment and curb endemic corruption, the kind that exposed Wal-Mart to allegations the company paid $24 million in bribes to speed permits for construction.
In the World Bank’s 2012 annual report “Doing Business,” which measures benchmarks such as enforcing contracts, paying taxes and protecting investors, Mexico finished a middling 53rd among 183 countries, an embarrassing rating for the pro-business government of outgoing President Felipe Calderon.
But the trend lines are up.
“The better off Mexico is, the better off we are,” Fisher said. “And all these Wal-Marts, Sam’s Clubs and Costcos are for the emerging middle class.”
Trade with the United States has increased sixfold since the North American Free Trade Agreement went into effect in 1994, according to Bank of Mexico and U.S. Commerce Department data. The trade agreement eliminated tariffs for goods and made it easier to invest across the border.
In the United States, NAFTA is still often used as a pejorative shorthand for outsourced jobs, particularly in Rust Belt states where manufacturers have closed plants and moved south. The torrid expansion of auto manufacturing in Mexico, for instance, is viewed by some industry experts as a long-term threat to much-touted U.S. job growth in the sector.
But NAFTA today generates far less controversy in Mexico. The last large protests, by farmers angry about cheap corn imports from Canada and the United States, occurred in 2008.
During Mexico’s presidential campaign this year, none of the candidates — not even leftist challenger Andres Manuel Lopez Obrador — campaigned against NAFTA or threatened to revoke it. The winner, President-elect Enrique Peña Nieto, said he wants to expand it.
And there is little wonder why. Mexican exports to the United States have soared from $42 billion in 1993 to $263 billion in 2011, according to the Commerce Department. Almost 80 percent of Mexico’s exports go to the U.S. market, led by crude oil, fruits, vegetables, televisions, cellphones, computers and passenger vehicles.
“Before NAFTA, we had a slight trade deficit with the United States,” said Daniel Chiquiar, a Bank of Mexico statistician. “Now we have a huge trade surplus.”
U.S. exports have also multiplied, especially as the consumption tastes of the growing Mexican middle class increasingly resemble those of U.S. shoppers.