Author Archives: carmenrobledo

PEÑA NIETO’S CHALLENGE: CRIMINAL CARTEL AND RULE OF LAW IN MEXICO

International Crisis Group (ICG) recently published a report on criminal cartels activity in Mexico and the government’s strategy against them. The document presents an analysis of the situation and revises the strategies implemented by previous PAN government and the challenges and opportunities to the current administration.

crimenThe report highlights the participation of the three main political parties in the Pacto por Mexico proposed by Peña Nieto’s administration. The pact allowed the government to pass several major reforms, but in this particular case, the three parties backed up the security plan launched by Peña Nieto. ICG notes that the former PAN administration implemented a strategy to “fight a war” but if Peña Nieto wishes to finish with the violence in Mexico, his government needs to include additional actions, such as institutional capacity building, reinforcing police and justice systems and improving social inclusion programs.

The violent situation in Mexico is not only a challenge for the country, but also for Mexico’s Northern neighbour. The report indicates that the violence escalated after the US legislative ban in assault weapons ended in 2004. Mexico is confronted to domestic pressure to finish with criminal activity and externally to stop the flow of narcotics. Furthermore, Mexico’s situation seems relevant for other countries around the globe facing similar circumstances.

To download full report click here.

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Aztec tiger begins to sharpen its claws

The Financial Times published an interesting article on Mexico’s economic environment. It highlights the prudent fiscal and monetary policies that the country has implemented recently, creating a sound macroeconomic environment.

Furthermore, the journalist underlines the structural reforms that President Peña Nieto was able to promote, as a result of the pact established with the main political forces of the country. Mexico is in the track of industrialisation, but still has a long way to go. Peña Nieto’s government needs to capitalize the momentum and continue further with other important reforms, such as the energy sector and tax schemes.

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Filed under Foreign investment, Macroeconomics, Mexico, News brief, Trade, Uncategorized

‘RELAUNCHING’ CHINA-MEXICO RELATIONS: President Xi Jinping visit to Mexico

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Last week, Chinese President Xi Jinping visited Mexico, as part of his first trip to the Americas. Earlier this year, during a trip to China to participate in the Boao Forum for Asia, President Peña Nieto extended an invitation to the Chinese President to visit Mexico. China and Mexico established diplomatic relations in 1972, but bilateral contacts are much older than that. In the XVIth Century, during the Spanish colony ships sailed the Pacific loaded with precious metals, cacao grains, avocados, tomatoes and other articles from the Americas that were exchanged for Asian spices, Chinese tea, porcelain and fabrics, especially silk.

For most of the last 40 years, the relations between the countries were quite cordial, during the last ten years. However, diplomatic mishaps and a policy that sought to bring Mexico closer to the US, during the Fox and Calderon administrations, provoked the Mexican neglect of strategic partners in other parts of the world, and in particular in Asia. Despite regular high-level encounters in international fora, such as APEC or G20, and the signing of cooperation agreements in numerous sectors, trade rivalry overshadowed  Sino-Mexican bilateral relations.

Unlike the rest of Latin-America, the economic relationship with Mexico has not been based on Chinese investment to ensure the flow of raw materials to fuel China’s industry. In fact, cheap Chinese labour made Mexico and China direct competitors in the US market;  in some cases, Chinese manufactures displaced national production in the Mexican domestic market. Furthermore, the bilateral trade deficit is heavily favorable to China; in 2012 Chinese exports to Mexico accounted for USD$57 billion, while Mexican exports to China were USD$5.7  billion (according to the Mexican Ministry of Trade, www.economia.gob.mx).

The occasion to relaunch the bilateral relationship could not be better. Each President has recently taken office and both countries seek to reaffirm their positions as global actors. On the domestic side, President Peña Nieto’s administration started a series of structural reforms to increase economic productivity, while China seeks to maintain its economic momentum. The increase of Chinese wages and international oil prices has narrowed down the productivity gap between Chinese and Mexican products. China’s products are not as cheap as they used to, in some cases, it is cheaper and certainly quicker to import from Mexico than from China for US companies. These elements helped Mexico to leave aside fears and realise the economic potential of complementing, rather than competing with, Chinese partners.

With the aims to enhance mutual trust, expand cooperation and deepen friendship, Peña Nieto and Xi Jinping announced the Comprehensive Strategic Partnership. This agreement aims to push for comprehensive, in-depth and mutual cooperation between the two countries and to make positive contributions to world peace, stability and prosperity. A permanent bilateral commission and working groups will follow the commitments established in the Partnership by the leaders.

Likewise, the two Presidents agreed to move forward, solving the long standing conflicts on pork, tequila and textiles trade. They committed to increase trade and investment and established a high-level business forum. Mexico and China also signed memoranda of understanding to improve cooperation in energy, biotechnology, mining, financial services and sport.

Additionally, President Peña Nieto and President Xi Jinping will encourage deeper people-to-people links. To start, the Chinese government will increase the number of scholarships offered to Mexican students from 40 to 300 per year. To increase cultural and academic exchanges, a Mexican cultural centre in Beijing and a centre specialising on Chinese studies in the National Autonomous University of Mexico (UNAM) will be opened. Finally, as symbol of the two countries’ endeavours to boost tourism flows, during the last day of the visit, President Xi Jinping and his wife visited the archaeological site of Chichen-Itza.

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Some specialists point out that the Chinese visit to Latin America is a sign to the US. China is pointing out that it has interests in other parts of the world, and is not afraid to contest US hegemony, even in the its back yard. Similarly, the US could interpret the visit as a payback for the recent increase in US engagement in Asia, China’s back yard. In any case, this is a perfect environment for Mexico’s diversification, since it could help to break the Mexican trade dependency on the US and to reaffirm itself as a key global player.

As said by President Xi Jiping in his address to the Mexican Senate*, China has a population of 1,300 million, is the second largest importer, expects to invest overseas more than USD$500, and more than 400 million of Chinese tourists will travel around the world in the next few years. This is an incredible opportunity for countries in Latin America, and of course for Mexico. The Comprehensive Strategic Partnership has opened the path for a promising future for Sino-Mexican relations.

 Mexico cannot waste this opportunity…


* I do encourage you to read President Xi Jinping’s speech to the Mexican Senate.

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Filed under BRICS, Development, Foreign investment, Mexico, News brief, Trade, Uncategorized

5 DE MAYO, MONROE DOCTRINE AND US-MEX RELATIONS

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In 1861, a large contingent of French, British and Spanish troops arrived on Mexican shores to support the imposition of Maximilian of Habsbourg as emperor of Mexico. The French contingent advanced to Mexico City and encountered resistance in the city of Puebla where, on the 5th of May of 1862, they were defeated by a small Mexican battalion  and eventually fled the country.

Every year on the 5th of May large festivities take place to celebrate the Mexican victory  in the Batalla de Puebla against the French Army. To the surprise of many, 5 de mayo is not Mexico’s national day (Mexico commemorates its national day on the anniversary of its independence, 16th of September). In reality,  5th of May is only one of many other celebrations in the Mexican historical calendar. It actually has become famous around the world thanks to huge range of festivities organised by Mexican-American communities in the US.

The battle of Puebla is significant not only because a small unprepared Mexican army defeated and expelled the French from Mexican territory, but because it represents the last attempt of European powers to invade American territory. To the satisfaction of President James Monroe, his famous doctrine “America for the Americans” had finally become a reality (I would like to stress that we refer to America as the continent, and Americans as the population of this continent and not to the narrow and commonly used reference of America as the United States and Americans as its citizens).

Throughout the history of relations between the US and Latin America, the Monroe Doctrine has had many and, in some cases, quite broad interpretations. Although military interventions have become rather rare, cover operations and other forms of interference have been widely used in the continent. The end of the Cold War shifted the attention of the US to other regions of the world. However, despite fervorous calls for national sovereignty, there were still claims of substantial US engagement in Latin America’s domestic affairs.

Unsurprisingly, Mexico has not been spared and in reality perhaps has suffered more than any other nation in the region. Geographical proximity, economic interdependence, social interconnection and common challenges have resulted in a very  complex relationship between the US and Mexico; but at the same time, this complexity has allowed the multiplication of numerous avenues for mutual collaboration.

During his recent visit to Mexico, President Obama highlighted the importance for the two countries to strengthen the bilateral relationship. Both Presidents focused their discussions on increasing efforts for further collaboration on trade and investment, energy security, education, innovation and competitiveness.

Nevertheless, it did not take long for criticisms on both sides of the border. Security and immigration, crucial issues for the bilateral agenda, had not been sufficiently discussed and were barely mentioned in official communiques. On the Mexican side, despite general agreement that these two topics should not overrun the bilateral relation, Mexico would like to see further US engagement in this regard (for instance, the immigration reform and larger arms control). While on the American side, criticism has focused on the importance of deepening cooperation to fight organised crime and see Peña Nieto’s measures to scale down US intelligence and security agents involvement in Mexico, as a sign of mistrust.

Critique became particularly sharp when Mexico’s new administration policies were compared to the wider cooperation and greater access that existed with the previous PAN government. Regular surveyance flights over Mexican territory, the establishment of ‘coordinating’ offices in Mexico City and Nuevo León and the free circulation of armed agents of FBI (Federal Bureau of Investigation), DEA (Drug Enforcement Administration), CIA (Central Intelligence Agency), ICS (Immigration and Citizenship Services), ATF (Bureau of Alcohol, Tobacco, Firearms and Explosives) and NSA (National Security Agency) does not appear to be the kind of close bilateral cooperation that PRI would prefer.

Despite restrictions on US involvement in the fight against organised crime and other domestic issues, it appears that we are far away from a definite adiós to the Monroe Doctrine in the hemisphere. Certainly, old style military interventions seem unlikely, but new IT resources, the interdependence of global markets and transnational societies have provided a new arsenal of interference tools that perhaps can prove to be ever more effective than traditional ones.….

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DUELO LATINO AT THE WTO

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After three rounds of voting the Mexican and the Brazilian candidates are the only ones still contending for Pascal Lamy’s chair, whose term as Director-General of the World Trade Organisation (WTO) will end next August.

Nine candidates were put forward by their respective countries to contend for the position: Brazil, Costa Rica, Ghana, Indonesia, Jordan Kenya, Mexico, New Zealand and South Korea (http://www.wto.org/english/thewto_e/dg_e/dg_selection_process_e.htm). The array of candidates, most of them from developing countries, reflects the shift in the international order and the interest of developing countries to be in the table of negotiations.

One of the favourites was Mari Pangestu, former Minister of Trade and current Minister of Tourism and Creative Industry of Indonesia, who retreated from the race in the last round of voting. Ms. Pangestu not only has experience as trade negotiator, cabinet member and in academia, but also an Indonesian candidate would have the advantage to easily build bridges with developing Asia and with the Muslim world.

Herminio Blanco was Minister of Trade and Industry from 1994 to 2000. He was chief negotiator for Mexico during NAFTA talks, the Uruguay Round and other trade agreements. Roberto Carvalho de Azevêdo is a career diplomat who has represented Brazil in several trade negotiations, including the Doha Round. He has been appointed as Brazil’s Permanent Representative to the WTO and other international organisations.

In this last stage of the election process, the finalists seem to be focusing in African votes. Both have visited several countries in the continent and have met African leaders in multilateral fora. Some African countries have expressed their fears to abrupt trade liberalization and would prefer a more cautious candidate.

One of the main challenges for the future Director-General is to restore the trust of the international community on the multilateral economic system. Without the support and the trust of the members, it would be very difficult for the new head of the WTO to break the impasse and move forward the Doha Round negotiations. Moreover, Lamy’s successor will have to fight protectionist measures that have (re)emerged under arguments of national interest or disguised behind regional free trade initiatives.

More than ever the WTO requires strategic and effective leadership. While some developing countries would support the Brazilian candidate because they would prefer diplomatic activism or have similar trade interests, others would consider as a better option, the fresh blood that an outsider like Blanco could bring to the organisation.

Despite rivalries and personal preferences, no matter who the winner is, both candidates have excellent credentials to fulfill the position. Both understand the concerns of developing countries and have a broad and solid knowledge of the international trade system. The question is would they be able to modernize the WTO and bring it back to the core of the international economic system?

It is Brazil against Mexico… but at the end, it is Latin America and the developing world who wins.

¡Suerte, qué gane el mejor!

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WEF Latin America 2013

WEF

Since yesterday, more than 400 personalities, including heads of states and representatives from the private sector, academia and civil society, are gathered in the Peruvian capital, Lima, to participate in the 2013 World Economic Forum (WEF) Latin America. They will  discuss about challenges and  opportunities around the topic of “delivering growth and strengthening societies”.  Latin America has registered constant rates of economic growth in recent years.  However, there are big challenges ahead in terms of inequality and exclusion, and especially insecurity.

The program of the  event is organised around the following three pillars:

1) Modernizing economies for growth.

2) Strengthening society through innovation.

3) Building resilience for sustainable development.

Follow live panel discussions on: http://www.wto.org/english/thewto_e/dg_e/dg_selection_process_e.htm

Program:  http://www.weforum.org/events/world-economic-forum-latin-america-2013/programme

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