Abstract: University partnerships are networks of knowledge, innovation, capital and human resources, with collective power to transform global development in unprecedented ways that 'flatten the world' creating leverage for the developing world, especially in rural regions. Today the fight against global poverty will be won or lost in rural areas, where 70 percent of the 1.1 billion of the world's poor live. Therefore university partnerships become the key actors in leading rural development efforts, especially bi-national partnerships, as they have the power to improve Mexico's economic and social prosperity stimulated by the transformative 21st Century environment through cross collaboration of sectors, cross fertilization of knowledge, and resource sharing to balance socioeconomic asymmetries between the U.S. and Mexico. However, university partnerships in the 21st Century knowledge-based global economy require a collaborative approach to university and partnership design that fosters a common framework for bi-national university partnerships to succeed in this rapidly changing global environment. This study demonstrates that the success of bi-national university partnerships not only depends on a 21st Century approach to university design that integrates education systems and structures, and approaches to create a bi-national institutional system that harmonizes administrative and academic programs between U.S. - Mexico universities, but also on the development of bi-national principals designed to foster synergistic collaboration based on critical success factors identified as trust, transparency, shared vision, commitment, communication, human and capital resources, and university support between two countries that have significant social, cultural, economic, and political systemic asymmetries. This study also provides recommendations and principles for university and partnership design. In this new knowledge-based global economy regionalism becomes a critical component for North America to compete with the European and Asian trade blocks by developing the new wealth of nations-knowledge. In this context, this study demonstrates that the role of higher education, university partnerships, and mission-based organizations are critical success factors for North America's regional global competition, especially with Mexico's potential to integrate as an equal partner, to strengthen regional competitiveness by narrowing the socio-economic gap between both countries through sustainable development collaborative education and research programs that access capital and human resources through various resource streams from public and private organizations.