Summary: Mexico in 2016 – What's at Stake?

Speakers:

Panel 1: Mexico’s Globalized Economy and North American Integration

• Jim Jones, Chairman, ManattJones Global Strategies
• Phil Levy, Senior Fellow, Global Economy, Chicago Council on Global Affairs
• Eugenio Madero, President, Rassini
• Eric Farnsworth, Vice President, Americas Society/Council of the Americas (moderator)

• Watch the related event: "Video: Mexico's Economic and Political Outlook after the Elections" 
• Learn more with our podcast episode, "The Trump Threat to North American Security"

Panel 2: Rule of Law in Mexico and Implications for Economic Development

• Juan Antonio Le Clercq, Director, Center for the Study of Impunity and Justice; Academic Director, International Relations and Political Science, Universidad de las Américas, Puebla (UDLAP)
• Alejandro Ponce, Chief Research Officer, World Justice Project
• Tony Payan, Director, Baker Institute, Mexico Center; Françoise and Edward Djerejian Fellow for Mexican Studies (moderator)

Summary

Over the last three decades, Mexico has undergone a remarkable economic, political, and social transformation. At the same time, the integration of its economy with the United States has fundamentally altered the nature of the bilateral relationship from one of competition to partnership. During a June 23 Council of the Americas event, panelists presented an array of perspectives on the future of Mexico, critiquing current policies and discussing alternative ones to effectively implement needed reforms in the future. Speakers generally agreed on main issues but proposed different approaches.

Mexico’s Globalized Economy and North American Integration

Mexico is increasingly integrated with the economies of Canada and the United States, but still needs to achieve several reforms to establish itself as a globalized First World country. With a split identity between Latin America and North America, Mexico has traversed a unique path to develop its globalized economy.

While Mexico has faced negative stereotypes during the U.S. presidential race, panelists agreed that the U.S.-Mexico relationship is as strong as ever and that changing the public perception of that relationship—especially U.S. perception of the North American Free Trade Agreement (NAFTA)—should be a priority for the governments of both countries. North American integration is essential to each country’s economy and this integration didn’t start with NAFTA, but it has allowed for members to more effectively cooperate. Rassini’s Eugenio Madero argued for the need to promote the benefits of the free-trade pact while educating the public about the interdependence of all three North American economies to dispel the negative sentiments associated with U.S.-Mexican relations.

ManattJones’ Jim Jones and Chicago Council on Global Affairs’ Phil Levy acknowledged the importance of such a plan, but stressed the need to address rule of law concerns in Mexico to create a more long-term solution. Mexico also needs to break the recent pattern of slow economic growth and bridge the gap between perception and reality when it comes to policy. Proposed solutions included using external methods such as the Trans-Pacific Partnership to implement legislative change, responsible and effective management of the current energy sector reform, and more participation of civil society. Jones explained that there are three primary components necessary to become a respected First World country: economic openness, political transparency, and rule of law. Mexico’s primary obstacle is the third.

Rule of Law in Mexico and Implications for Economic Development

Mexico is undergoing a period of constitutional changes, but to successfully implement the various proposed reforms it must first strengthen its rule of law. In the second panel, participants discussed anticorruption efforts, including a citizen initiative called Ley 3de3 seeking to hold public officials accountable but that was weakened during Senate debate. UDLAP’s Juan Antonio Le Clercq said that flaws in the criminal justice system and security policies are at the root of Mexico’s rule of law woes. The problem of impunity plagues Mexico at the national as well as state levels, and mistrust of public officials seriously damages Mexico’s business climate. World Justice Project’s Alejandro Ponce noted that 30 percent of businesses had been victimized by crime. In a UDLAP study of levels of impunity in 59 countries, Mexico ranked second to last, said Le Clercq. These issues come at a high cost for Mexico, unable to effectively implement other necessary reforms without a strong rule of law.

The Baker Institute’s Tony Payan closed the panel and event by recommending that Washington change its Mexico policy so that it no longer focuses solely on trade and security cooperation, but also includes human rights and rule of law.