Mexico’s multiplying problems threaten to undermine Nafta talks

5/8/2017 Financial Times

NAFTAWhen President Enrique Peña Nieto called Donald Trump and persuaded him not to scrap the North American Free Trade Agreement on his 100th day in office, it was a reminder that Mexico has not lost its touch in managing international crises.

Debt default, devaluation, hyperinflation and bank nationalisations — Mexico has coped with them all in the past four decades. As Mr Trump was building his business empire, officials in Latin America’s second-biggest economy were cutting their teeth on catastrophe.

The issue for Mr Peña Nieto and his deeply unpopular administration is that Mexico’s record on handling domestic travails is much less impressive than its long history of dealing with international problems.

While Mr. Trump was debuting on the Forbes rich list in 1982, Mexico was trying to resolve the first debt default of Latin America’s “lost decade”. By 1994, the year Nafta came into force, a savage devaluation sparked the “Tequila crisis” and prompted an emergency US bailout.

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