Mexico Marks the G20’s Latin American Debut

The Group of 20, known as the G20, meets June 18 and 19 in Los Cabos, Mexico, marking the first time the summit will take place in Latin America during a time when the region’s growth outpaces that of many developed economies. The conference will draw a record number of Latin American countries, given that Mexican President Felipe Calderón invited Chile and Colombia to participate along with member countries Argentina, Brazil, and Mexico. Though the crux of summit discussion will focus on the eurozone crisis, Brazil and Mexico hope to forge a dialogue on International Monetary Fund (IMF) reform and buffering Latin America from the global economic slowdown. The conference will provide Latin American participants with the chance to showcase the region’s economic strength—particularly for the host—amid gloomy forecasts in Europe. The event also allowed Mexico to showcase its entrance into Trans-Pacific Partnership (TPP) negotiations.

While participants examine Europe and its role in the global economic crisis, Mexico hopes to leverage the summit as evidence of its growing international clout. Commenting on his country’s role as host, Calderón said in a June 12 press briefing: “This distinction undoubtedly reflects Mexico’s position as one of the world’s most solid, important economies…it reflects the fact that Mexico is now a player rather than an observer of global changes.” Mexico’s Economy Secretary Bruno Ferrari told the press that the event would help Mexico position itself as a responsible economic leader. Daniel Servitje, CEO of Mexico’s Grupo Bimbo, said Mexico’s G20 presidency “is a great opportunity to change the image of Mexico in the world...and the movement towards a better world will be exemplified by the role Mexico plays.” Media attention surrounding the G20 has also pointed to Mexico’s economic prowess. The New York Times indicated Mexico’s GDP is growing faster than that of regional economic heavyweight Brazil. “The best way to improve your image is GDP growth,” former Mexican trade negotiator Luis de la Calle told the Times. Financial Times declared Mexico an “economic success story” and described the country as a prime example of the power of emerging markets.

Mexico’s growing economic power came into focus with the June 18 announcement that the country officially became a negotiating partner in the TPP, a free-trade agreement linking the Americas to the Asia-Pacific Region. The United States—along with Australia, Brunei Darussalam, Chile, Malaysia, New Zealand, Peru, Singapore, and Vietnam—extended an invitation to Mexico to enter negotiations and become the tenth country in the grouping. The original nine TPP countries represent 36 percent of total goods trade and 47 percent of total services trade worldwide. “Mexico has been a capable and responsible free-trade partner for almost 20 years amid dramatic political and economic changes, and has contributed directly to our own growth and well-being in the United States,” wrote Council of the Americas Vice President Eric Farnsworth in a Reforma op-ed in support of Mexico’s ascension to the TPP.

The G20 offers an opportunity for Latin American countries to take a leadership role in the global economy. Mexico, along with Brazil, plans to push for reforms to IMF at the summit. Calderón will urge increased funding by large economies to the multilateral in order to stave off the effects of the eurozone crisis, seeking approximately $500 billion. Mexico’s Secretary of Foreign Affairs Patricia Espinosa announced that through negotiations prior to the conference, $430 billion had been raised, but key countries such as Canada, China, and the United States have yet to contribute. Brazil, meanwhile, is seeking a long-held goal to pressure the IMF to give more voting power to emerging economies. Though new rules giving more voting power to developing countries were agreed to in 2010, they have yet to be ratified by all member countries. President Dilma Rousseff could cap Brazil’s IMF contribution in an effort to pressure the organization to push through reforms.

Latin American representatives will gain additional opportunities to talk growth at a number of sideline events. On June 15 and 16, the Mexican government hosted “Rethinking G20,” bringing together government leaders (including Calderón), artists, and academics to open the summit. The B20 on June 17 and 18—chaired by Mexican CEO Alejandro Ramírez—brought together business leaders to discuss public-private partnerships and initiatives to spur growth. Other top Mexican CEOs are co-chairing task forces, including Servitje, telecommunications magnate Carlos Slim, Banorte head Guillermo Ortíz, and Kimberly-Clark Mexico CEO Pablo González. The L20 will host labor leaders in a parallel event during the summit to discuss job creation and financial regulation. 

Learn More:

• Learn about Mexico’s role in the G20 as a host country from AS/COA’s Mexico 2012 conference blog.
• Read about the Trans-Pacific Partnership in an AS/COA Online Explainer.
• Read an op-ed in Reforma by COA’s Eric Farnsworth about Mexico’s entrance to the TPP.
• Access the official portal of the G20 and see a list of side events.
• Read about Mexico’s goals and priorities for the G20 from NL-Aid.