Opinions Worth Sharing, Trade in North America

Project or Fantasy?

Image: Getty Images in collaboration with Unsplash+

Federico Reyes Heroles

The discussion was intense. Ignorance and fears, real and mythical, lurked. Commercial partners of the US? But they are our historical enemy; they want to appropriate our natural wealth.

Image: Dom Fou on Unsplash

But the world transformation was undeniable. With all the hatreds inherited from the Second World War, Europe had taken the first steps immediately. R. Schuman spoke out in 1950. Together with J. Monnet and A. de Gasperi, they were the pioneers. Adenauer and Churchill were behind. De Gaulle distrusted England. Germany and France, with deep mutual wounds, knew of their economic potential and called for the Treaty of Paris (coal and steel). Italy, the Netherlands, Belgium, and Luxembourg shook up their national priorities: first, prosperity for a devastated area. Another world was born. Kissinger would flirt with China. The USSR would disappear. The Wall would fall.

Image: PopTika on Shutterstock

But Mexico remained tied to what Samuel Ramos called “artificial destinies”, those we invented to deny change: without corn, there is no country. Miguel De la Madrid (MMH) gave the rudder blow, correcting the disastrous course of the inherited populism. Deficit of 16%, brutal dependence on oil -85% of exports- and a closed economy. The consumer did not exist in the calculations. MMH took the first step: joining GATT. He stayed the course: sound finances, curbing inflation, openness—state regulation, not ownership. But there was more on the way. Carlos Salinas de Gortari, surrounded by solid economists, put fears aside. They invoked “comparative advantages”. Mexico could become a middle power within a reasonable time.

Photo: Tomas Martínez/ Cuartoscuro on politica.expansión.mx

There was resistance, especially from productive sectors that only survived in a closed environment, such as household appliances, for example. The opening forced them to modernize, or they would succumb. There were both. But in addition to the commercial potential, behind it was a scaffolding of agreements between countries -Canada included- that could serve as a civilizing pact for North America. That was exciting. Think about the panel discussions. In its original version, NAFTA presupposed cross-observation, denunciation of trade alterations, and, implicitly, political freedoms and the rule of law. How much we needed them! But the fears did not stop: we would only eat McDonald’s hamburgers. Our culture would be devastated. Today, avocados and Mexican food have pierced the north. We came out of the cultural greenhouse.

Photo: AP on cdn.britannica.com

Thirty years later: first trading partner of the US; twelfth world power; 83% of GDP comes from exports, the main ones, automobiles 14.3%; processing machines, 6.7%; auto parts, 6.5%; monitors, projectors, screens, etc., manufacturing. We are no longer the “oil country” many mocked in the eighties. And then came the surprises, the agro-products: avocado, tomato, citrus, strawberries, berries, cattle, and lots of… beer. Growing fast: mollusks, garlic, seeds, and spores for planting, peanuts, coffee, and even some wheat. On this side, tens of millions of consumers benefited. What would Mexico be today without its exports?

Chart and data: on ourworldindata.org

In 1994, Mexico did not bet on intuition. It believed in economic science, and the transformation has been astonishing. There were no compensatory investments or migrant flow pacts. There was resistance there, too. But there are novelties; the new CUSMA/USMCA/T-MEC obliges us to be green, more vigilant about labor conditions, and several additions. Industrial production has been modernized. Productivity increases are mainly due to the export sector. It produced more poor people, they say. False, deprivation decreased: health, housing, water, electricity, household goods, etcetera—more than 130 million cell phones. Poverty today is very different. Openness has raised standards. But without Seguro Popular (Public Health Insurance), more than 50 million are now new poor.

Photo: Stefan Doncean on Pexels

There was a real project; there are many results, so even the fantasy of the 4T has followed it.

Image: Hasanov Jeyhun on Shutterstock

Further Reading: