California has been a significant destination and origin for these trade flows. Both countries have clearly exploited their comparative advantages. The abundance of labor in Mexico has combined with new technologies and know-how from the United States and other advanced nations to allow the country to produce a host of products of increasing sophistication at low cost.
At the same time, Mexico has enjoyed a considerable degree of specialization in products such as autos. Economic engagement has been facilitated by geographic proximity, as well as two decades of life with the North American Free Trade Agreement (NAFTA). Furthermore, integration between the two countries has occurred in a context of ever-deepening globalization.