Now that the United States is loudly breaking up with Mexico on social, Mexico is suddenly on the prowl for hot rebound trade with other markets. This is how it looks from here anyway, with Mexican officials popping up all over the media saying some country or other is going to be a big new market for Mexican exports. The new U.S. administration’s threats to dismantle the North American Free Trade Agreement (NAFTA) are currently stoking the flames of economic terror in Mexico, but we all know that Mexico’s dependency on the U.S. export market has been the stuff of economists’ nightmares for decades. To put it in perspective, the share of Mexico’s annual exports shipped to the USA has not dropped below 79% since some time before 1993, if it ever has. From 1998 to 2001, the concentration of Mexican exports destined for the U.S. market hovered near a truly bloodcurdling 89%. So it’s not like we didn’t know we were exposed to risk from overdependence on one market, but after 25 years of trade-loving U.S. governments, we became accustomed to living in denial. Read the rest of this entry »
Posts Tagged Brazil
When images of violent protests began streaming out of Brazil last month, some partisans here in Mexico may have felt a silent temptation to gloat. Certainly no one wants to see people hurt, or property destroyed, in any country. But considering the free ride Brazil received in international media in recent years – while Mexico was flogged like the family mule – a little tarnish on the South American giant’s reputation at least might be worth a dab of schadenfreude. We, however, are not feeling it, and the quicker Brazil recovers the path to peace and prosperity, the better for all concerned.
Brazil and Mexico are presented as rivals at times, considering their role as Latin America’s two largest economies and emerging-market stars. Readers of this blog know that we seize every opportunity to whinge about Brazil’s glamor-puss image while it plays dirty on trade policy. Read the rest of this entry »
In March 2012, Brazil insisted on putting artificial curbs on imports of Mexican-made automobiles, contrary to the long-standing pact governing vehicle trade between Mexico and the Mercosur trade bloc comprised of Brazil, Argentina, Paraguay and Uruguay. We’re in a snit about this, because the move creates problems for Mexico and in general adds to the list of alarming actions coming out of Mercosur countries lately that are undermining the environment for trade and investment.
The Economic Complementation Agreement No. 55, known as ACE 55, was negotiated between Mexico and Mercosur in 2002 as a means of reducing tariffs on vehicles and auto parts to facilitate trade in these goods between the five countries. It worked; automotive trade surged and the deal seemed to suit Brazil just fine as the South American giant racked up a trade surplus in cars with Mexico year after year. Read the rest of this entry »