TUCSON, Ariz. (AP) - European investment, U.S. materials, Mexican labor ... and Tucson.

For overseas companies eyeing partnerships in Mexico, southern Arizona can be the natural meeting place - and reap benefits, experts say.

One Tucson company is actively promoting the connection by opening offices in Europe to market manufacturing in northern Mexico. The Offshore Group has about 16,500 employees at two industrial parks in Sonora and one in Coahuila state, said Steven A. Colantuoni, the company's marketing research officer. Offshore also has two offices in Germany, two in the United Kingdom, one in Sweden and one in Norway.

The company has nearly 100 employees in Tucson, and more than $1.5 billion in trade crosses through its compound in southeast Tucson each year. It is the sixth-largest maquiladora employer in the Mexico, according to new economic reports.

Offshore's European customers buy more than 90 percent of their raw materials from U.S. companies before they're shipped to Mexico _ a key benefit that manufacturing in China doesn't offer because they don't need U.S. materials. Among the products made in Mexico for a European company to sell in the United States: an 8-millimeter clip used in coronary bypass surgery.

Those who believe these partnerships equate to outsourcing American jobs don't realize the benefits, said Boris Kozolchyk, founder and director of the National Law Center for Inter-American Free Trade.

``What they're doing is very helpful to the economy of the two countries,'' he said. ``This is something that should be encouraged.''

Colantuoni pointed out that foreign companies employ thousands of people in plants throughout the United States.

``If other countries (closed U.S. plants), a lot of people who work for Toyota would be really upset,'' he said. ``I don't believe jobs have a nationality.''

The company offers European customers everything from a stable labor pool to shipping and distribution of goods back and forth across the U.S.-Mexico border, and it handles all customs-regulation matters south- and northbound.

A combination of lower labor costs, faster and cheaper shipping expenses, and immediate access to U.S. store shelves is part of the reason the Tucson company can market Sonoran manufacturing, Colantuoni said.

Those factors give Tucson an international edge, said John D. Grabo, director of marketing and international programs with the Office of Economic Development at the University of Arizona.

``It's a powerful product for southern Arizona to market worldwide,'' he said. ``There are only four border states that can play in this game. One of the advantages we have is that we know Mexico.''

Mexico entered its free-trade agreement with Europe in July 2001, and last year trade between the two rose to $42 billion, an increase of 133 percent from 2005, said Mexico's secretary of the economy, Eduardo Sojo Garza-Aldape.

Mexico has the largest network of free-trade agreements in the world _ with 43 countries _ and Tucson should consider itself a logical liaison, Grabo said.

He added that even if the labor pool is located in Mexico, Tucson could gain logistic and engineering positions that are linked to the operation.

``We get something out of the operation as opposed to nothing,'' Grabo said. ``This is about distinguishing ourselves from other markets in the U.S. The risk is getting shut out.''