Mexico: Current Situation and Prospects

On June the 7th, INCIPE organized a working breakfast titled Mexico: Current Situation and Prospects, presented by Roberta Lajous, ambassador of Mexico to Spain. In the last years Mexico has steadily advanced towards becoming a large middle power with considerable influence in the world. Mexico is already among the top 15 world economies, and the country expects to continue to grow economically- largely thanks to its demographic bonus- to make it the top 10 by 2050. Although there is still much to be done with social issues, inequality, and security, Mexico is aware that the next few years will be especially important in tackling these problems.

Mexico is a country open to the world and with a long tradition of multilateralism that dates back to the interwar period. The country is a proud member of international economic forums such as the G-20 and a defender of free trade. Mexico has currently signed 11 free-trade agreements that give them access to the markets of 40 different countries. The NAFTA (North American Free Trade Agreement) is still undergoing negotiations for its renovation, despite the new tariffs on steel and aluminum imposed by President Trump’s administration. Mexico is especially satisfied with the new free trade agreement that was reached with the EU in April 2018, for which Spain acted as the main interlocutor between Mexico and the EU.

The relationship between Spain and Mexico is at a high point. The communication between the two states has been constant and fluid for the last 40 years- regardless of the parties in government -, and the two countries share the same positions at the different international gatherings. Cooperation and interactions with the Spanish government, businesses, and well-educated immigrants have historically proven very useful for Mexico’s development and the implementation of the recent structural reforms. Spain and Mexico also cooperate in promoting the teaching and learning of Spanish in the world. Regarding Mexico’s neighbor to the north, despite the new US administration hostile stance towards Mexico, the cooperation in security matters between the two countries remains very strong. The common border and the large volume of commercial exchanges force the two countries to cooperate in their fight against drug-trafficking and have created a situation of strong economic interdependence. However, there is a growing number of Mexican politicians who want to strain Mexico’s relations with the US in response to President Trump’s attitude towards their country. Migration-wise, Mexico’s net migration to the United States has dropped to 0, and Mexico has become a transit country for Centro American migrants in their journey towards the US. These migrants frequently decide to stay in the booming south eastern states of Mexico such as Yucatán. This new pressure on the southern border of Mexico requires an integral response focusing on the economic development of Central America to reduce the migration flow.

In the last term, Mexico has passed a series of structural reforms with a view to promote sustained economic growth that have begun to be implemented. The most transcendental one is the education reform, which aims at increasing the country’s human capital. For the first time teachers will have to pass public examinations, and students will be evaluated regularly. In the economic realm, the labor market has been made more flexible, the traditionally low taxes have been increased to fund more public programs, and the sectors of telecommunications and energy (especially oil) have been liberalized and their monopolies broken. Regarding the political reforms, Mexico is trying to increase the transparency of its public institutions, and it has imposed fiscal discipline over the local and state governments, which used to be able to indebt themselves without any regulation. Finally, the new electoral law facilitates the vote from abroad and allows, for the first time, the reelection of senators, representatives, and mayors.

The next elections have no precedents: Eighty-nine million voters have to renovate 18 000 political positions at the federal, state, and local level. The logistics effort is going to be very large. These are the most competitive elections in Mexico’s history, and, although the results are hardly predictable, there is a chance that power shifts hands to the antiestablishment party of Andrés Manuel López Obrador.

Luis Enrique Moya Cánovas

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