Mexico & Nafta - April 2011 (ISSN 1741-444X)

Immigration: On 26 and 27 March the presidents of the US Senate and the Mexican senate met in Nevada. Manlio Fabio Beltrones, the president of the Mexican senate, reported that Harry Reid, his US counterpart, had promised to devote more of his time to creating a comprehensive immigration reform that would sort out the anomalous legal position of Mexicans working illegally in the US, than to the wars in Iraq and Afghanistan. What makes this statement significant is that the US is demonstrating that although relations between Mexico and the US may be cool at the presidential level, they are warming up at the parliamentary level. Beltrones, a former governor of the border state of Sonora, is a candidate for the PRI presidential nomination in 2012.

No Spring Break: US students shunned Mexico for their traditional Spring Break vacations this year. The decision seems to have been the result of the upsurge in violence in Mexico. In Acapulco, there were only about 1,000 US Spring Breakers. In 2010 there had been 15,000, according to Jesús Radilla, the head of Acapulco's tourist promotion board.  Despite this, Acapulco managed to replace the lost Spring Breakers with domestic tourists.

Nafta costs to Mexico: A recent study by the World Bank pointed out that between 1994, when the North American Free Trade Agreement (Nafta) came into force, and 2010 the Mexican economy (GDP) grew by an average of 2.2% a year. Stripping out population growth reduces the pure rate of GDP growth to about 1.2% a year. This is less than a fifth of the annual rate of India; about 10% of China's rate and less than a quarter of Brazil's rate.

What is shocking is that between 1994 and 2010 Mexico's GDP per capita probably grew by 60% to about US$14,000 a year. Over the same period, US GDP per capita grew 76% to US$47,000. Since Nafta, the economic gap between Mexico and the US has actually increased. In 1994, Mexico GDP per capita was 31% of the US level. In 2010, it had fallen to 29% of the US level.

Lorenzo Meyer, a leading public policy commentator in Mexico, argues that Nafta has been a major disaster for the country. Currently, only one of the prospective presidential candidates for 2012, the radical left-winger Andrés Manuel López Obrador, has suggested changing or even withdrawing from Nafta.