MEXICAN FOREIGN POLICY:
MEXICO AND NAFTA
Jorge A. Schiavon
Professor and Director
International Studies Department
Centro de Investigación y Docencia Económicas (CIDE)
Université d’eté sur l’intégration et les relations
transfrontalières nord-américanes,
Université de Sherbrooke, August 16-20, 2010
Structure of the Presentation
I. A general view of Mexico’s foreign policy
II. Transformation of Mexican foreign policy
¾
Causes
Domestic
International
III. Special relation with the US
IV. NAFTA
ALWAYS COMPARE TO CANADA (VERY SIMILAR)
I. Mexico’s Foreign Policy
Survive (and benefit) from hegemony (U.S.)
‰ Leadership in Latin America: area of influence
(Central America), balancing (Brasil, in South
America), and third border (Caribbean)
‰ Multilateral activity (legalistic and variable)
‰ Limited relations with Europe, East Asia, Middle
East, Central Asia, Africa and South Pacific.
‰
I. Mexico’s Foreign Policy
‰ Mexico
in the world (rule of 10s)
‰ GDP:
+1,000,000 million USD
‰ Population:
+ 100,000 million
‰ GDP p.c.:
+10,000 USD (unequal)
‰ Between 10-15 place worldwide (territory,
population, GDP, trade): G-5, G-20
‰ Territory:
2,000 million sq. km.
‰ US Border:
3,000 k.m.
I. Mexico’s Foreign Policy
‰ North
America (geography and economics)
Canada, U.S. and Mexico
‰ North American Free Trade Agreement (NAFTA)
‰ Security and Prosperity Partnership (SPP)
‰
‰ Latin
America (history, culture, language)
Latin-American concept
‰ GRULAC, Ibero-America
‰ OAS, FTAA, Rio Group
‰ NAFTA, Mercosur, Andean Pact, CACM,
Caricom, G3, bilateral
‰
I. Mexico’s Foreign Policy
Foreign policy definition:
‰
State’s public policy towards the exterior
ƒ Main function:
Protect independence
and territorial integrity
(Dictionary of Diplomacy)
‰
Maximize sovereignty
=
(internal, external,
absolute, and equality)
In democracy, it must represent and defend the
interest of the majority = welfare (political
stability and economic development)
I. Mexico’s Foreign Policy
‰ Mexico
has always understood by sovereignty, the power
to maintain its territorial integrity and to define its
domestic policies in a free, autonomous and independent
way, with no pressure or external interference (especially
from the US),
‰
‰
‰
its form of government
its domestic policies
its foreign policy
I. Mexico’s Foreign Policy
‰
US is the most important international relation for Mexico.
‰
The rest of the bilateral, regional, hemispheric, multilateral
and global relations are tied directly or indirectly to this
relation.
‰
To understand Mexican Foreign Policy it is fundamental to
understand its bilateral relation with its northern neighbor.
‰
When we talk about relations with Latin America, Europe, or
Asia, of participation in international or regional organisms,
of the definition co concepts such as sovereignty, nation,
principles, interests, of negotiation on topics such as security,
trade, investment or immigration, the obliged reference of
Mexico’s international relations has always been, and is, with
the United States.
I. Mexico’s Foreign Policy
• The level of attention to the relation with the US has
always been really high; on the contrary, the relations
with other countries, regions, and international
organisms are varied, inconsistent and selective, for
which one cannot really talk about general policies
towards Latin America, Europe, Asia, or regional or
global organizations (such as UN, OAS, IMF, or WB).
• Mexico tries to use these relations to balance, diversify,
and neutralize the negative effects of the concentration
in the relation with the US.
I. Mexico’s Foreign Policy
‰ There
is a lack of an explicit and sustained will to project
Mexico’s power at regional and global level; even in its
natural area of influence, Central and Latin America, the
Mexican participation has been limited and selective in
time and space.
‰ Given
its limited relative power in front of other world
powers, the participation of Mexico in multilateral
organizations tend to have a legal nature, trying to
defend the value of international law over the power and
use of force in the international system (asymmetry of
power vis a vis U.S.).
I. Mexico’s Foreign Policy
‰ History:
‰
surviving asymmetry
1848, 1898, 1945, 1989, 2008?
‰ Penetration
‰
‰
‰
‰
‰
‰
‰
of U.S. system
Executive diplomacy
Administrative diplomacy (Bi-national Commission)
Parliamentary diplomacy + lobby
Local diplomacy (Consulates)
Diaspora diplomacy (IME)
Regional diplomacy (NAFTA)
Societal diplomacy (MNC, NGOs, academia, family)
II. Changes in Mexican Foreign Policy
‰ International
system: globalization and
interdependence
‰ Domestic
system: economic opening, structural
reforms, democratization and decentralization
II. Changes in Mexican Foreign Policy
‰ According
to the Constitution, Mexico is a democratic
system: presidential, strong bicameralism (symmetric
and incongruent chambers), and federal, in other words,
in terms of institutional division of powers, it is one of
the cases with the highest degree of division
‰ In
terms of foreign policy, in the Mexican political
system, the sovereign power is shared by the three
branches of government (conduction / revision and
approval/ application)
II. Changes in Mexican Foreign Policy
‰ 70
years of PRI hegemony = one of the most centralized
in the world
‰ Merger between federal Executive and Official Party
‰ Mexican president = main actor with enormous metaconstitutional powers (presidentialism)
‰ Indisputable leader
‰ Whose party had majority in both legislative
chambers and controlled all state governments (until
1989)
‰ Highly disciplined party
II. Changes in Mexican Foreign Policy
5. Division of
purpose
between
powers
Executive
8. División de propósito en partidos
1.
Constitutional
division of
powers
4. Party fragmentation
Legislativo
6. Division of purpose between chambers
2. Legislative division of power
3. Federal
division of
power
7. Division of
purpose between
government
orders
II. Changes in Mexican Foreign Policy
Variable
1982
Erosion starts
2000
Constitutional
division of powers
Presidential
No institutional change
Presidential
Legislative
division of powers
Strong bicameralism
(symmetric and incongruent
chambers)
No institutional change
Strong bicameralism (symmetric
and incongruent chambers)
Federal division of
powers
Federalism
No institutional change
Federalism
Attributions in the
conduction of
foreign policy
Conduction by the executive
(with analysis of foreign
policy, ratification of treaties,
ambassadors, and consuls by
the Senate, and absences from
national territory by Congress)
No institutional change
Conduction by the executive
(with analysis of foreign policy,
ratification of treaties,
ambassadors, and consuls by the
Senate, and absences from
national territory by Congress)
Fragmentation of
parties
Low fragmentation
NEP Deputies: 1.720
NEP Senators: 1.032
Fragmentation increases
in elections 1988
Medium fragmentation
NEP Deputies: 2.769
NEP Senators: 2.786
Division of
purpose among
powers
Unified government
Presidency: PRI
Absolute majority in
chambers: PRI
PRI looses presidency in
2000
Divided government
Presidency: PAN
Absolute majority in chambers:
no party
II. Changes in Mexican Foreign Policy
Variable
1982
Erosion starts
2000
Division of purpose
among chambers
Legislative unity
PRI Deputies: 74.8%
PRI Senators: 98.4%
PRI looses majority of
deputies in 1997 and of
Senators in 2000
Legislative Division
PRI Deputies: 42.2%
PRI Senators: 46.1%
Division of purpose
among levels of
government
Unitary government
Governors from PRI: 100%
PRI looses first state
government (Baja
California) in 1989
Juxtaposed government
Governors for PAN: 25.0%
Division of purpose
among parties
Total discipline
Discipline Index:
Nearly 100%
Indiscipline starts in PRI
and PAN in Zedillo’s
administration (electoral
reform and Fobaproa)
Declining discipline
Discipline Index:
80-90% approximately
CONDUCTION
OF FOREIGN
POLICY
PREDICTION
TOTAL CONTROL BY THE
EXECUTIVE (WITHOUT
QUESTIONING OR THE
PARTICIPATION OF THE
LEGISLATIVE OR THE
STATES)
EXECUTIVE CONTROL (WITH
QUESTIONINGS AND
INCREASING
PARTICIPATION OF THE
LEGISLATIVE AND THE
STATES)
Special relation with the US
EXPORTS AND IMPORTS ACCORDING TO THE REGION OF DESTINY AND
ORIGIN, IN TERMS OF TOTAL MEXICAN EXPORTS AND IMPORTS
100.0
90.0
80.0
70.0
Porcentaje
60.0
50.0
40.0
30.0
20.0
10.0
0.0
1975
1980
1985
1990
Año
AMÉRICA DEL NORTE % Imp o rtación
AMÉRICA DEL NORTE % Exp o rtación
AMÉRICA LATINA Y EL CARIBE % Imp o rtación
AMÉRICA LATINA Y EL CARIBE % Exp o rtación
UNIÓN EUROPEA % Imp o rtación
1995
2001
Special relation with the US
‰ 85%
of exports
‰ 70% of imports
‰ 2/3 of FDI
‰ 30 million Mexicans in US
‰ 15 million born in Mexico
‰ 7.5 million illegal
‰ 25,000 million USD remittances
‰ 3,000 k.m. border
‰ Tijuana-San Diego: most important international
crossing
Special relation with the US
‰ Priority
in Mexican foreign policy = containment
of US hegemony
‰ Priority
in US foreign policy towards Mexico =
stability and security of southern border
‰ Since
the end of World War II, the US-Mexico
relations have been characterized as a common
interest on minimizing frictions and privilege
cooperation for the solution of bilateral affairs.
Special relation with the US
‰ This
has resulted in a “special relation” between
the two countries that has allowed wide margins
of autonomy to Mexico in its management of its
internal and external policies in moment of
international stability, but at the same time, it
has required discrete alignment with the US in
moments of crisis.
Special relation with the US
Coincidence in voting with the United States in the
United Nations General Assembly
80
70
60
Percentage
50
40
30
20
10
0
Year
1985
1989
Mexico
Source: G. González (2001)
1994
Canada
1999
United Nations
NAFTA OBJECTIVES
‰ Free trade area (goods, services and capital); no
CET or migration
‰ Increase competitiveness
‰ Lock in economic reforms at domestic level (before and
after NAFTA):
‰ % of GDP
‰ Oil vs manufactures
‰ Regional vs open integration / one vs. many FTAs
23
Huge increase in exports
Mexico is the third most important exporter and importer vis a vis the US:
+ 600 % increase in less than 20 years
241.7
Exportaciones de México a EE.UU. y Canadá
1990-2008
(Miles de millones de dólares)
Exp. Petroleras
*Cifras preliminares para 2008
Fuente: Secretaría de Relaciones Exteriores con datos de Banco de México
2008*
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
44.4
Exp. No petroleras
24
FDI
Inversión Extranjera Directa (IED) en México
(acumulada 1994-2008, miles de millones de dólares)
1
8 ve
de 1
s
e
d
ce s
994
255,9
273,5
228,8
2 0 1. 0
18 6 , 4
16 2 , 9
14 6 , 6
12 2 , 9
93,2
15 , 1
24,7
1994
1995
34,8
1996
49,0
1997
6 1, 4
1998
75,2
1999
2000
2001
2002
* Para el año de 2008 la inversión extranjera directa esta reportada hasta el mes de septiembre
2003
2004
2005
2006
2007
2008
25
Convergence
México
EE.UU.
40%
35%
30%
Inflación promedio anual (2000=100)
25%
20%
15%
10%
5%
0%
1995
Fuente: OECD
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
26
Fuente: JP Morgan
01/04/2008
09/06/2007
05/11/2007
01/16/2007
09/18/2006
05/23/2006
01/26/2006
09/27/2005
06/02/2005
02/04/2005
10/07/2004
06/14/2004
02/18/2004
10/20/2003
06/24/2003
02/27/2003
10/29/2002
07/03/2002
03/08/2002
11/07/2001
07/10/2001
03/14/2001
11/14/2000
07/20/2000
03/24/2000
11/29/1999
08/02/1999
04/07/1999
12/08/1998
08/11/1998
04/16/1998
México (EMBI+)
900
800
700
600
500
400
300
200
100
0
27
Puntos base sobre UST
Country risk
1200
1100
1000
Agriculture
COMERCIO AGROALIMENTARIO Y PESQUERO MÉXICO-MUNDO
(Millones de dólares)
19,000
18,000
17,000
TMAC 1994-2008
X: 10.6%
Acuerdos Bilaterales
M: 7.1%
16,000
15,000
14,000
13,000
12,000
11,000
10,000
9,000
8,000
7,000
TMAC 1980-1986
X: 4.7%
M: -12.6%
Adhesión de
México al GATT
TMAC 1986-1994
X: 5.3%
M: 22.7%
6,000
5,000
4,000
3,000
2,000
1,000
0
1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Fuente: Banco de México
Exportaciones = X
Importaciones = M
28
Mexico is the second exporter to the US
Exportaciones de México a la región TLCAN
(millones de dólares)
12.000
1993-2008**
10.000
Agroalimentario
286%
Agropecuario
188%
8.000
6.000
Agroindustrial
566%
4.000
2.000
Agroalimentarias
Agropecuario
* Agroalimentarios es la suma de los agropecuarios y los agroindustriales.
** Cifras en el año de 2008 acumulado (enero-octubre)
Fuente: Secretaría de Economía con datos de Banco de México.
2008*
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
0
Agroindustrial
29
Net importer of grains
Balanza comercial agroalimentaria con Estados Unidos y Canadá, 1990 – 2007 1/
(millones de dólares)
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
0
-500
-413
-662 -723
-678,7
Valores
-1000
-1500
-2000
-1427
-1447
-1565
-1763
-1816
-1958
-1884
-2021
-2045
-2500
-2420
-2571
-2773
-3000
-3068
-2963
-3500
Años
1/ Cifras disponibles a junio
Fuente: Secretaría de Economía con datos de Banco de México.
30
Evaluation of NAFTA
¾ Has changed face of Mexican economic model and
development strategy
¾ Lightning rod effect: positive and negative
¾ Trade concentration with US (dangerous)
¾ Macro and microeconomic consequences (growth vs
inequality)
¾ Renegotiation impossible: it has already happened
¾ Limited to goods, services and capital; next step?
¾ Compatible with other FTAs and global liberalization?
31
Between Regions and
countries
• 51% believe more attention to
Latin America is needed
• 24% consider Europe a priority
• Asia does not exist: only 3%
think Mexico should give it
more attention, and 38% that
the economic competition in
this region is a big problem for
Mexico
• Have more favorable opinion
regarding European and Asian
countries than for their Latin
American neighbors
Mexico and America
• Mexicans do not want to be part
of the north or the south, but the
bridge between them.
• Believe that there will be further
economic and political integration
with the North America (67% y
61%) y and with Latin America
(72% y 64%)
• Don’t want Mexico to act as a
leader n the region, but as equals
(59%)
• A minority prefer regional
leadership from Mexico (22%)
Contact:
Jorge A. Schiavon
Professor and Director
International Studies Department
CIDE
[email protected]