Engagement and Pragmatism: Towards an Enduring Canadian Strategy in Latin America

Paper by Eric Miller, Canadian Global Affairs Institute Fellow
Canadian Global Affairs Institute, January 2016

canada mexicoExecutive Summary

With a majority government and a different world view than his predecessor, Prime Minister Justin Trudeau is re-making Canada’s foreign policy priorities and approaches. This paper offers some suggested approaches for engagement with Latin America. In the area of trade, the paper recommends seeking associate membership in the Pacific Alliance while continuing to strengthen linkages with Mexico within the North American commercial policy framework. It also suggests exploring the scope of what is possible with countries with which Canada does not have free trade agreements, especially Brazil and Ecuador. On the security front, the paper suggests that Canada needs a strategy for the Colombian peace process and to step up support to Mexico in strengthening the integrity of the southern border of North America. With regards to foreign policy, Canada needs a serious strategy for the new Cuba and needs to expand its diplomatic representation, namely in Paraguay and Bolivia. Finally, on the institution-building front Canada needs to secure senior positions at the Inter-American Development Bank and Organization of American States in order to help to drive institutional reform. Canada further needs a coherent strategy to attract in-bound foreign investment from Latin America. The region is rich with possibilities and a coherent engagement strategy can deliver much.

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The “bridge to nowhere” now connects the United States and Mexico

2/4/2016 Mexico Institute via Forbes.com

By Christopher Wilson and E. Anthony Wayne

On February 4, Mexican President Enrique Peña Nieto and U.S. Secretaries of Homeland Security and Commerce are scheduled to inaugurate the new border crossing just south of El Paso, Texas and Ciudad Juarez, Chihuahua. Once called the “bridge to nowhere” because the U.S. half was completed before the Mexican portion was built, the international bridge and port of entry facilities at Tornillo-Guadalupe will now help manage the massive legal flows of goods and people across our border.  Over $1 million dollars of trade per minute crosses our common border and an estimated 950,000 people legally cross the border each day to study, visit family members, do business and go shopping.

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Publication | The Impact of Crime and Violence on Economic Sector Diversity

By Viridiana Rios, Mexico Institute Global Fellow
December 21, 2015, Harvard University

Abstract:

Literature has focused attention on identifying whether crime and violence impact growth via changes in economic factor accumulation, i.e. reducing labor supply or increasing capital costs. Yet, much little is known as to how crime and violence may affect how economic factors are allocated. Using a unique dataset created with a text-analysis algorithm of web content, this paper traces a decade of economic activity at the subnational level to show that increases in criminal presence and violent crime reduce economic diversification, increase sector concentration, and diminish economic complexity. An increase of 9.8% in the number of criminal organizations is enough to eliminate one economic sector. Similar effects can be felt if homicides rates increase by more than 22.5%, or if gang-related violence increases by 5.4%. By addressing the impact that crime has on the diversification of production factors, this paper takes current literature one step forward: It goes from exploring the effects of crime in the demand/supply of production factors, to analyzing its effects on economic composition.

Download the paper here.

VIDEO | Mexican Mayor Assassinated: Implications for the Debate Over the Organization of Police Forces

duncan wilson center trendingMexico Institute Director, Duncan Wood believes the assassination of Mayor Gisela Mota could have implications for the ongoing debate over how to organize Mexico’s police forces.

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Duncan Wood is the director of the Mexico Institute at the Wilson Center. Prior to this, he was a professor and the director of the International Relations Program at the Instituto Tecnologico Autonomo de Mexico (ITAM) in Mexico City for 17 years. He has been a member of the Mexican National Research System, an editorial advisor to both Reforma and El Universal newspapers, and is a member of the editorial board of Foreign Affairs Latinoamerica. In 2007, he was a non-resident Fulbright Fellow and, between 2007 and 2009, he was technical secretary of the Red Mexicana de Energia, a group of experts in the area of energy policy in Mexico. He has been a Senior Associate with the Simon Chair and the Americas Program at the Center for Strategic and International Studies (CSIS) in Washington, D.C. His research focuses on Mexican energy policy, including renewable energy, and North American relations. He studied in the UK and Canada, receiving his PhD in political studies from Queen’s University, Canada, and is a recipient of the Canadian Governor General’s Visit Award for contributions to the Mexico-Canada relationship.

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New Publication: Now for Public Debt in Mexico: Policy Lessons for the Effective Oversight of State and Municipal Government Finances

mexican pesosBy Heidi Jane M. Smith

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While Mexico has a very low debt-to-GDP ratio that is slightly above forty percent, its state and municipal portion hovers around 2.5% (IMF, World Economic Outlook Databases, 2012). Subnational governments have consistently been accused of taking on too much debt, allowing irresponsible repayment plans and consenting to outright political corruption. Especially since 2001, the first full year since the country revised its laws governing subnational borrowing rights, Mexico has experienced a significant rise in the indebtedness of its states and municipalities. During the past decade, total subnational debt went from $990 pesos per capita in 2001 to $3,450 pesos per capita in 2011 (ASF 2011). Although Mexico’s overall subnational debt is still at reasonable levels compared to other countries, this nation’s high vertical fiscal imbalances and de facto soft subnational budget constraints could continue to fuel observed trends unless national legislation governing the rights and responsibilities of subnational governments are made. One can argue that the pace of increasing debt has been constant, but it accelerated during the 2009 economic crisis when National GDP decreased substantially (around -6%). Actual proposals to harmonizing accounting standards among state and local governments, increase transparency and improve reporting requirements by the Mexican Ministry of Finance (Secretaría de Hacienda y Crédito Público, SHCP) are only a few steps towards improving fiscal policy at the local level. Reviewing policies to understand debt sources and improving bankruptcy laws to cope with moral hazard issues will help to maintain strong sustainable fiscal balances into the future.

This policy paper argues that alternative revenue sources are necessary for economic growth at the local level, but continued soft budget constraints and lax regulatory environments may also put Mexico’s future into jeopardy. Lessons learned from the United States’ state and municipal financing could provide valuable policy options for Mexico–thus, the paper provides policy recommendations for future public financial management considerations.

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Keynote Speech: Opportunities and Challenges for Mexico Today

10/29/2015 The International Trade Journal

By Diana Villiers Negroponte

Abstract

Since its pre-colonial history, Mexico has demonstrated two contrary tendencies: the outward-looking, global trader and the protective, nationalist instinct. Today, the seven major constitutional reforms of the PRI government reflect the former. However, the teacher’s union, some presidential advisors, and the criminal justice system reflect a preference for the latter. The more progressive sectors of Mexican society assert the need to participate in the global economy, but latent protective and nationalist tendencies throw up challenges. This article examines several contemporary examples of each tendency and demonstrates how they coexist uneasily in modern Mexico.

This article was published by our Advisory Board Member Diana Villiers Negroponte in the International Trade Journal (Volume 29, Issue 5, 2015). Click here to read the full article

 

Drugs, Human Rights, Trade, and Distrust: The Evolution of U.S.-Mexican Relations

11/10/2015 By Tom Long, War on the Rocks

President Obama visits Mexico President Enrique Pena NietoLast month, citing human rights concerns, the United States quietly withheld about $5 million in counternarcotics assistance for Mexico. The State Department declined to certify that Mexico met conditions imposed on the aid by Congress under the Leahy Amendment, triggering the 15-percent reduction in funding for Mexican security agencies. Though more than $140 million of other U.S. funding will continue to flow, the decision — first reported by The Washington Post and confirmed by a deputy spokesman at the State Department — was cheered by human rights advocates. A senior official at Human Rights Watch told The New York Times that the cut was “unprecedented.”

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