Now is the Time for the U.S. to Embrace Mexico
Now is the Time for the U.S. to Embrace Mexico
It’s time to reignite a vision of a more competitive, economically united North America, writes COA’s Eric Farnsworth for Financial Times’ beyondbrics.
In office barely a year, Mexico’s president Enrique Peña Nieto is pursuing aggressive reforms for breakout growth through greater competitiveness. Washington should do all it can to help him succeed, because Mexico’s expansion is good for the US.
Already our second largest export market after Canada, US imports from Mexico contain some 40 per cent of US content (from China it’s 4 per cent). In many industries, joint production and supply chains have developed to such an extent that we don’t just trade things together, now we design and make things together, in high value-added products like aerospace, automobiles, and sophisticated medical equipment. Production in Mexico and a growing middle class creates good jobs in the US and vice versa, increasing economies of scale and building North American competitiveness in the face of continued competition from China and elsewhere.
Much of this is due to Nafta, which set the terms of economic engagement while promoting a vision of open market democratic governance that has undergirded Mexico’s subsequent global outreach. Emerging market watchers, including rating agency Moody’s, now recognise that Mexico is investment grade and is breaking away from the traditional emerging markets paradigm which is weighing down other countries across Latin America. Peña Nieto is even on the cover of Time this week in recognition of the reform agenda that includes energy and education, communications and competition policy, and labour and the legislature, among others. This trend will only accelerate once the reforms are fully implemented, particularly in Mexico’s closed energy sector....
