Good evening Dr. Sojo, President Bryant, Amcham leaders, members, and distinguished guests. First, Miles, thank you for that kind introduction. I want to express my gratitude to you and the American Chamber for your 88-year commitment to the U.S. relationship with Mexico.

I would also like to congratulate Larry Rubin on his recent appointment as Executive Vice President and CEO, and applaud his vision of significantly enhancing the Chamber's leadership role. The American Chamber remains a world-class organization particularly because of its commitment to being an agent for change.

On January 20, I attended the President's second inaugural address, and I want you to know how proud I was listening to him describe the march of freedom as the best hope for peace in our world. I remember the skepticism of some who believed the United States naive, even misdirected, in basing its foreign policy on support for democratic movements and institutions. Indeed, the President has had to make some very difficult decisions, but he recognizes that freedom is often hard won, and that its pursuit requires vision, courage, and uncompromised belief in the human spirit.

Increasingly the world appreciates the President’s steadfast efforts to end tyranny and recognizes that the United States and its international partners have helped the people of Afghanistan and Iraq depose of brutal regimes and find their own way. America’s national interests, and the lives of tens of millions who have achieved their freedom, are far better for it.

I also want you to know how much I look forward to continuing to serve President Bush as the U.S. Ambassador to Mexico. It’s been an exciting couple of years, and what's clear to me is that you will see a reinvigorated commitment by this Administration to our relationship with Mexico. Our new Secretary of State, Condoleezza Rice, is coming to Mexico next Thursday, and President Bush will host President Fox and Prime Minister Martin later in the month to discuss practical ways to build on the strong foundations of NAFTA.

Clearly, Mexico is integral to the President's vision of a North American continent free of terrorism, competitive with the world’s strongest economies, and supportive of vigorous democratic institutions. And unless tectonic plate movements alter our national borders, U.S. interests will remain bound to Mexico’s stability and prosperity. We share each other’s strengths, just as we share each other’s challenges. Our mission and responsibility is therefore to work together with the Mexican leadership to bolster North America’s security, economic prosperity, and democratic institutions.

Realizing the President's vision depends first and foremost on creating a border for the 21st century--one that secures our nation while facilitating the legitimate flow of people and goods. The United States and Mexico are building a robust, modern partnership that will protect our common North American home, while respecting each other's sovereignty. We enjoy strong law enforcement cooperation with Mexico, but recognize that more must be done.

And with regard to that border, I want to reiterate that we have no interest in criticizing Mexico gratuitously, but where the safety and security of U.S. citizens are at stake, I will not hesitate to speak out forcefully and unequivocally. As someone who grew up in south Texas, I recognize that the safety of that region is a shared responsibility. We are committed to doing our part, and recognize and are grateful for the strong cooperation and commitment from the Fox administration in this effort.

Migration remains one of our most challenging bilateral issues, and will remain so as the President pursues Congressional passage of a temporary worker program. As President Bush said in his State of the Union address:

“America's immigration system is outdated -- unsuited to the needs of our economy and to the values of our country."

The President made clear that he wants a rational immigration system that permits temporary guest workers to fill jobs, but rejects amnesty. The system should also allow us to monitor who is entering and leaving the U.S., ensuring that our resources are focused on stopping those who would seek to do either country harm.

I recognize the importance of this issue for Mexico. There should be no doubt, however, that immigration reform will become far more likely when the U.S. public and its leaders feel confident that the border is secure and Mexico is doing everything it can to create economic opportunities here at home.

In that regard, Mexico's government, private sector, and civil society all have a responsibility. Reliance on remittances from the U.S. is not a viable economic policy-- this only increases dependence on the United States and delays Mexico’s full participation in the global economy.

It's now clear to all of us that North America faces a significant economic challenge, from Asia in particular. Mexico has maintained impressive macroeconomic stability in recent years, but has some significant catching up to do on the microeconomic side. By not adapting to the new rules of the globalization game--which requires broad and far-reaching reforms well-recognized by Mexico's leaders--Mexico risks being left behind.

Rather than dwell on the problem, imagine for a moment what the economy might look like if there were better cooperation across the political spectrum to secure Mexico’s future. And imagine what else could be achieved were corruption less pervasive, no longer able to poison business deals, encourage illicit activity, and chill investment.

Four and a half percent growth is good, but economists here estimate that Mexico needs higher growth rates to eliminate under-employment and to absorb new entrants into the job market. Reducing corruption and implementing structural reforms that will allow this additional growth requires a close partnership between the legislative and executive branches that transcends partisan politics.

This is a lesson those of us from the U.S. have learned the hard way: Major reform of any kind takes cooperation across party lines and both branches of government. It’s work, but the leaders who make that happen are the ones that history remembers as the great statesmen.

None would argue about the fact that education is the key to ensuring that more people share in the prosperity that reform and growth can bring. In order to compete in the information age, we must educate our young to produce knowledge by becoming technologically literate. Mexico can no longer rely on cheap labor as its comparative advantage. The collective North American future lies in developing the creative brain-power of the inventor, the entrepreneur, and the skilled worker who will then bring innovation and technical competency to the modern marketplace. While there is no doubt in my mind that education is key, we should all be doing more.

Governments can lead, negotiating free trade agreements and creating more friendly investment climates. But to ensure sustained growth, the private sector must also step up, helping to find ways to overcome development barriers, promoting sound government economic policies, and resisting corruption.

One of the best examples of successful public-private cooperation is the Partnership for Prosperity (P4P as it is also known). As Miles discussed a few moments ago, we have created a novel quadripartite committee within the P4P framework that brings together the U.S. and Mexican governments and private sectors. AmCham has been participating actively in this and has ensured that the views of the U.S. private sector are heard as the Mexican government considers steps to spur competitiveness and make this country more attractive to foreign investors.

Last week, the U.S. Government announced $570 million in financing for new investments in Mexico. The latest projects being supported by the Overseas Private Investment Corporation include a $200 million credit guarantee framework with Banamex, a $250 million revolving credit facility with ICA-Fluor for PEMEX contracts, plus two investment funds of $60 million each with Baring Latin American Partners and Conduit Capital. These investments will fuel private sector growth in Mexico for small and medium-sized businesses--especially those in the energy sector.

Programs like these are enabling the private sector to generate economic growth in those regions that have been neglected in Mexico’s development. Nearly 50 percent of this country remains impoverished. Think about it: Half of Mexico represents an enormous untapped market-- a vibrant economic opportunity as Mexico’s wealthier markets mature.

But establishing a profitable foothold in Mexico’s poorest areas may well require a new conceptual framework for doing business, one that includes new types of partnerships—particularly those known as social entrepreneurship. Through innovative solutions to social problems, many social entrepreneurs have developed strong local networks, market knowledge, service delivery mechanisms and even revenue models to serve low-income communities. By partnering with social entrepreneurs and learning from their innovations, companies have an opportunity to reach new consumers while making a difference in their communities.

In a pilot program to encourage this type of partnership between business and social entrepreneurship, an international non-profit organization called Ashoka has facilitated a commercial partnership between two social entrepreneurs--who work with large networks of small farmers in Oaxaca and Guerrero--and a leading water solutions company called Amanco. Together, Ashoka, social entrepreneurs, and Amanco are developing a new business model to sell needed irrigation equipment to small farmers whereby the parties involved generate revenue while contributing to the development of Mexico’s farmers.

I am encouraged by the kind of corporate stewardship shown by forward-looking companies that balance responsibilities to their employees and shareholders with responsibilities to the communities in which they operate. I particularly applaud the work of the fourteen companies that compose the National Business Council on HIV/AIDs that--with the support of the U.S. Government and key AIDS prevention organizations in Mexico--recently joined forces to eradicate discrimination against HIV/AIDS in the workforce. These companies recognize they’re doing this not just for the public relations value, but also for their bottom lines. Businesses simply cannot succeed in communities that fail.

We need to be honest about what can happen if markets fail to deliver to the poorer half of Mexico, or of any society. If people lose economic hope, they can also lose faith in their public institutions, turning away from both markets and democracy and towards the sort of demagoguery that has too often plagued other countries and limited their horizons and freedoms. This has been the recent misfortune of Venezuela, where democracy now faces a severe test. And it has been the tragedy of Cuba for the past 45 years.

As we consolidate our modern partnership with Mexico, we are seeking new initiatives to promote the security and prosperity of all of North America. Security, prosperity, and competitiveness are key components of our efforts to build on the remarkable success of NAFTA by expanding our relationship with each of our North American partners.

Mexico is well-positioned to become competitive with the world’s strongest economies as the century marches forward, and its northern neighbor is committed to seeing Mexico succeed. Because we all share in a common cause in moving North America forward, our responsibility is to action--a commitment I know each of you take seriously.

Thank you for the opportunity to be with you here tonight. And I’ll close as I always do, with a simple prayer that God bless both Mexico and the United States.

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