NAFTA in U.S. campaign spotlight

08/21/2016 The San Diego Union Tribune

NAFTA_logoSince passage of the North American Free Trade Agreement more than two decades ago, U.S.-Mexico trade has risen to unprecedented levels. Trucks cross into the United States laden with shipments of medical devices, electronics, cars, fruits and vegetables, while others roll south into Mexico with loads of U.S. electronic equipment, machinery, plastics and agricultural products.

NAFTA created new jobs, brought consumers a wider range of choices, increased the integration of the U.S. and Mexican economies and enhanced North America’s global competitiveness, supporters say. A report by the Wilson Center in Washington, D.C., states that six million U.S. jobs depend on trade with Mexico. A University of Chicago survey of top U.S. economists showed a majority agreeing that Americans have been better off under the treaty.

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The Hidden Costs of a Possible U.S.–Mexico Trade War

08/05/2016 Wharton, University of Pennsylvania

mexico-usa-flag-montageIn the race for the White House, both Republican Donald Trump and Democrat Hillary Clinton have incorporated skepticism about free-trade pacts into their presidential campaign platforms. While Trump has attracted more attention than Clinton by arguing that the U.S. should seriously consider pulling out of the three-nation North American Free Trade Agreement and the 164-nation World Trade Organization, both candidates have criticized the impact of NAFTA on U.S. jobs growth, and opposed U.S. membership in the Trans-Pacific Partnership (TPP) on the grounds that the 12-nation free-trade bloc, yet to be enacted, would have a harmful impact on U.S. economic growth and job creation.

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Moody’s Sees Mexico Prepared for External Shocks

08/02/2016 The Wall Street Journal

6732357797_64d2ba3cdc_mMEXICO CITY—Mexican economic growth faces headwinds from global market volatility, government spending cuts and higher local interest rates, although the country is fairly well equipped to handle shocks such as lower oil prices and higher U.S. interest rates, Moody’s Investors Service said Wednesday.

“Gross capital flows to emerging markets have started to revert in 2016; although the trend change has been gradual in the case of Mexico, external volatility continues to weigh on growth,” the ratings company said in a report.

A flexible exchange rate, foreign reserves around $177 billion and a recently renewed flexible credit line with the International Monetary Fund leave Mexico relatively well positioned to manage external shocks, Moody’s added.

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Fitch: Mexico Better Than Brazil, Venezuela, Argentina…

06/29/16 Forbes 

Chichen_Itza_Temple_of_Kukulcan_SerpentWhen it comes to managing its debt, Mexico is better than Brazil, basket case Venezuela and Argentina, even as its new government is in the process of resuscitating the economy.

On Thursday, Fitch Ratings reaffirmed Mexico’s investment grade status of BBB+, a credit rating Brazil lost last year after getting it in 2008.

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This Man Is Brilliant. So Why Doesn’t Mexico’s Economy Grow Faster?

07/21/2016 Quarterly Americas

carstens

A great way to understand Agustín Carstens is to hear how he defines himself and his peers —“The Generation of 12.50.”

That may sound obscure to outsiders, but anyone who grew up in Mexico during the 1950s, ’60s or ’70s instantly understands.

For 22 consecutive years, the peso was fixed at exactly 12.50 per dollar — and that number was as much a fixture of Mexican life as Cantinflas, Zonda-brand TVs or the Volkswagen Beetle. “Not everybody in our generation knew how to multiply by 12,” Carstens recalled with a soft chuckle, “but many people could by 12.50.” That is, until one ill-fated day in September 1976, when President Luis Echeverría, his term coming to an end following years of fiscal mismanagement, abruptly decided to end the peg and set the peso free.

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Mexico’s Special Economic Zones: White Elephants?

By Viridiana Rios, Global Fellow, Mexico Institute

expert I (2)In June 2016, Mexico enacted a federal law to create Special Economic Zones (SEZ) in four of the poorest regions of the country. The initiative aims to reduce the markedly unequal levels of economic development inside Mexico, with a set of wealthy, internationally connected northern states, and an agricultural south that seems mired in perpetual underdevelopment.

Mexico will create its first Mexican SEZ in the Pacific port of Lázaro Cárdenas, on the border of the states of Michoacán and Guerrero, and the other three will follow at the Isthmus of Tehuantepec (Veracruz and Oaxaca states), Puerto Chiapas (Chiapas), and the Coatzacoalcos Corridor /Ciudad del Carmen (Campeche). The goal is to have at least one “anchor firm” operating in each SEZ by 2018, the last year of the current administration.

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North America’s Big Agenda

6/29/2016 The News

By Earl Anthony Wayne, Mexico Institute Public Policy Fellow

When Presidents Enrique Peña Nieto and Barack Obama join Prime Minister Justin Trudeau in Ottawa on June 29 at the North American Leaders’ Summit (NALS), they will have two big tasks: First, to explain why cooperation between the three countries is of great value; and second, to approve an action agenda that will produce good results for economic growth, mutual security, the environment and international cooperation.

Since Mexico hosted the “Three Amigos” Summit in 2014, the U.S. political debate has turned critical of cooperation across the continent, spiced with toxic rhetoric aimed at Mexico. The leaders will meet as the U.K. vote has shaken the EU’s model of deep cooperation, and as all three North American economies need more growth and better performance. At the same time, collaboration and understanding between the three governments has improved significantly, and the connectivity between the economies has deepened. Mexican, Canadian and U.S. trade totals $1.2 trillion a year, with over $850 billion invested by the three countries in their neighbors’ economies, and the non-economic cooperation is vast.

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