New Publication | A Mandate for Mexico

June 29, 2015

By Lucy Conger

mandate for mexicoIt was not so long ago that Mexico teetered on the brink of bankruptcy following a short-lived oil boom and a wild run of government spending. And, until quite recently, Mexico, despite sharing a 2,000-mile border with the United States, kept foreign goods out and gave domestic industries nearly exclusive access to a country-sized captive market.

Free trade has made Mexico a powerful manufacturing platform, a top global automobile assembler, and has radically diversified the economy, sharply reducing dependence on oil exports. The paradigm shift that unfettered Mexico’s protected and closed economy has been highly successful in creating a stable economic and policy environment and in making Mexico a marketfriendly global super-trader. But formidable challenges remain. Economic growth has slowed and consistently falls short of the level needed to create enough jobs to absorb the expanding domestic labor force.

Mexico is at a critical juncture. The record shows that the first wave of reforms that began 30 years ago failed to deliver the desired boost to economic growth and competitiveness. The reforms now underway promise even bigger changes for the economy, particularly by opening up the long closed petroleum industry. Looking ahead, can the new wave of reforms move Mexico into a higher gear, stimulate increases in productivity and economic growth, lubricate the economy with more credit, establish and enforce genuine competition in strategic sectors, and train the work force in modern skills? Or, three decades hence will we look back and say the Peña Nieto reforms were inadequately implemented and Mexico remains a low-growth, low-productivity economy?

This is a timely moment for reviewing Mexico’s success with deep economic reforms and asking what is required from here on in to make the new wave of reforms successful so that Mexico and Mexicans can enjoy the benefits of higher growth and productivity. This study offers a qualitative analysis of the deep economic reforms undertaken in Mexico during the past 30 years, the progress made and informed opinions on what is needed today to boost economic growth, enhance competitiveness and, hopefully, increase employment. The study summarizes the views about the successes and failures of the first wave of reforms as seen by a select group of former cabinet members and other prominent policy makers, consultants to government, opinion shapers in policy centers, and thought leaders in academia.

Download the report here.


EVENT THIS AFTERNOON: NAFTA & the Strengthening of the Mexican Economy

June 29, 2015

120px-North_America_(orthographic_projection).svgWHEN: TODAY, June 29, 2:00-3:30pm

WHERE: 5th Floor Conference Room, Woodrow Wilson Center

Click here to RSVP.

A live webcast will be available here.

Two decades ago, Canada, Mexico, and the United States created a continental economy. Since the signing of the North American Free Trade Agreement, Mexico has lived through a currency crisis, a democratic transition, and the rising challenge of Asian manufacturing. Many of the dynamics of North America today, from Mexico’s reform agenda to continental concerns about competitiveness, have their roots in the conditions that produced NAFTA, in the agreement itself, and in the tremendous transformations it wrought. Looking back at that period provides context for understanding today’s reforms. Today, Mexico’s competitiveness agenda, championed by President Enrique Peña Nieto and widely supported by the Mexican Congress, includes specific actions oriented toward promoting larger inflows of foreign investment by opening strategic economic sectors to private participation. This package of reforms would bring a sweeping transformation of the economy.

The Woodrow Wilson Center’s Mexico Institute is pleased to invite you to an event on NAFTA and the Mexican economy. Jaime Serra Puche will present his book NAFTA and the Building of a Region. An Essay from the Mexican Perspective and Lucy Conger will present her paper on Mexican competitiveness, A Mandate for Mexico. Ambassador Carla A. Hills will provide commentary on both publications, in relation to the broader subjects of NAFTA and the Mexican economy.

Speakers

Jaime Serra Puche
Chairman, SAI Law and Economics

Ambassador Carla A. Hills
Chair and CEO, Hills & Company, International Consultants

Lucy Conger
Independent Journalist

Moderator

Duncan Wood
Director, Mexico Institute, Wilson Center


Upcoming Event! NAFTA and the Strengthening of the Mexican Economy

June 23, 2015

NAFTAWHEN: Monday, June 29, 2:00-3:30pm

WHERE: 5th Floor Conference Room, Woodrow Wilson Center, Washington, DC

Click here to RSVP. 

Two decades ago, Canada, Mexico, and the United States created a continental economy. Since the signing of the North American Free Trade Agreement, Mexico has lived through a currency crisis, a democratic transition, and the rising challenge of Asian manufacturing. Many of the dynamics of North America today, from Mexico’s reform agenda to continental concerns about competitiveness, have their roots in the conditions that produced NAFTA, in the agreement itself, and in the tremendous transformations it wrought. Looking back at that period provides context for understanding today’s reforms. Today, Mexico’s competitiveness agenda, championed by President Enrique Peña Nieto and widely supported by the Mexican Congress, includes specific actions oriented toward promoting larger inflows of foreign investment by opening strategic economic sectors to private participation. This package of reforms would bring a sweeping transformation of the economy.

The Woodrow Wilson Center’s Mexico Institute is pleased to invite you to an event on NAFTA and the Mexican economy. Jaime Serra Puche will present his book NAFTA and the Building of a Region. An Essay from the Mexican Perspective and Lucy Conger will present her paper on Mexican competitiveness, A Mandate for Mexico. Ambassador Carla A. Hills will provide commentary on both publications, in relation to the broader subjects of NAFTA and the Mexican economy.

Speakers

Jaime Serra Puche
Chairman, SAI Law and Economics

Ambassador Carla A. Hills
Chair and CEO, Hills & Company, International Consultants

Lucy Conger
Independent Journalist

Moderator

Duncan Wood
Director, Mexico Institute, Wilson Center

Click here to RSVP. There will be a live webcast of this event.


Canada should focus on NAFTA and Mexico

June 11, 2015

6/10/15 Financial Post
NAFTA_logoMexico’s growth prospects make it the best option for Canada’s emerging market expansion and investment plans.

If Canada”s interest in the North American Free Trade Agreement was in deepening regional trade integration between our economy and the US and Mexico, then we could say it certainly succeeded — at least for about five years.

By 1999, however, Canada’s NAFTA trade had peaked, and it has since only declined as a share of its trade with the rest of the world: from 79 to 66 per cent. Truly free trade with the US has proved elusive — the number of professions granted labour-mobility concessions under NAFTA has gone virtually unchanged for 20 years — and trade irritants continue to rankle on both sides of the Canada-US border.

Read more…


Tijuana and the Future of Trade

June 8, 2015

6/7/15 The Huffington Post

tijuana photoblogSince 1928, Tijuana, Mexico, has been portrayed as the city of sin — the place that allowed “mob entrepreneurs” to take advantage of its strategic location in order to satisfy U.S. demand for all things illegal. Tijuana also became the most visited border city in the world, mainly thanks to tourism.

In 1994, when the North American Free Trade Agreement (NAFTA) came into effect, it was widely expected to be the key for Mexico to finally join leading economies in the 21st century. The agreement pushed Tijuana to evolve from a focus on tourism to one on manufacturing.

Companies like Samsung, Panasonic, Sony and others opened massive assembly plants there.

Read more…


Carstens Won’t Rule Out Keeping Mexico Rates Low After Fed Move

April 20, 2015


4/19/2015 Bloomberg Business

Mexican central bank Governor Agustin Carstens doesn’t rule out keeping interest rates at a record low even after the Federal Reserve begins to tighten, given slow growth and inflation in Latin America’s second-largest economy.

He also said the country will benefit from faster growth in the U.S., and that the peso is undervalued as investors focus on the outlook for higher U.S. rates rather than Mexico’s economic potential.

“All options are open” for monetary policy, Carstens said Sunday in an interview in Washington after the spring meetings of the International Monetary Fund and World Bank.

Read more…


NAFTA, Free Trade and Mexico’s Drug War

April 17, 2015

InSightLogo_main_24bit4/7/2015 InSight Crime

Without providing the slightest evidence, the habitual enemies of free trade have launched a new campaign of lies, insisting that the North American Free Trade Agreement (NAFTA) and “neoliberal” policies in general — which according to them the United States forced Mexico to adopt — are the causes of drug violence.

I read an excerpt from Carmen Boullosa and Mike Wallace’s soon-to-be published book “A Narco History: How the United States andMexico created the ‘Mexican war against drugs.'” The book’s thesis is that NAFTA opened the US’s door to drugs from Mexico, mixing them with legal trade, which is false.

Read more…


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