By Yussef Núñez Menéndez *
The last couple of years have forever changed the international system’s dynamics and have also altered domestic affairs in some countries. The Covid-19 pandemic’s effect on the world’s economy has impacted global trade and supply chains causing a significant increase in inflation and economic recessions. Also, the nearly 11-month-long Russian occupation of Ukraine has rekindled latent geopolitical tensions and aggravated energy prices. It has also tested the critical bilateral relationship between the world’s biggest economies, China and the United States. While China is currently struggling with a public health crisis echoing that of early 2020, the U.S. continues to pursue a tough and inflexible versus China policy in several areas including trade.
Mexico has not been exempt from this period of geopolitical tensions but it does not mean it cannot take advantage of it for the better. The sum of the recent events –along with the rise of nationalism– is impacting globalization. This evolution has resulted in closer regional cooperation. North America should stand strong in this new era. Last month, the region’s priorities were in fact addressed during the North American Leaders’ Summit (NALS) held in Mexico City. The key points in the Summit’s agenda were diversity, equity, and inclusion, climate change, regional competitiveness, migration, health, and security.
Undoubtedly, the NALS agenda is important and relevant for Mexico. However, Mexican President Andrés Manuel López Obrador’s own domestic priorities seem at odds with it.
Take climate change for instance. How can AMLO’s government speak of climate action whilst two of his key infrastructure projects (the Dos Bocas oil refinery and the Mayan Train across the Yucatán jungle) are climate regressive and a threat to biodiversity? The lack of congruence between the current Mexican administration’s policies and its implementation – unfortunately – displays a duality, thus depicting a colossal gap between proposals and final outcomes.
A similar argument can be made regarding the current Mexican government’s strategy towards nearshoring. Today, Mexico is missing a lifetime opportunity to attract more Foreign Direct Investment (FDI) and replace Eastern Asia as a regional manufacturer. Basic geography has driven the private sector to consider Mexico as an alternative to China to access North America’s market. However, this is not enough for private companies to consider migrating their operations to Mexico. The country does have to foster proper infrastructure, security, and institutional safety to protect private investment. Attracting more FDI would promote economic growth, incentivize Mexico’s competitive marketplace, and generate jobs. The aggregate increase in production will inevitably maximize knowledge spillovers and positively affect Mexico’s human capital. An interesting development is the recent announcement of Plan Sonora which addresses regional competitiveness, engages in nearshoring, and attracts FDI in the automobile industry. Despite its pros and cons, critiques, or praise, this engagement could lead to the appropriate direction.
Notwithstanding, long-run economic development seems not to be a national priority for AMLO’s government. We can only hope that the winner of the 2024 Mexican president has a better understanding of world affairs to better position Mexico as a key player in the complex 21st century. The board is set, it is Mexico’s move.
* Yussef Nuñez Menéndez has a BA degree in International Relations from the Universidad Anáhuac México. He is currently pursuing a MSc in International Development at the London School of Economics and Political Science (LSE), specializing in Applied Development Economics. He is an associate of the Mexican Council of International Affairs’ Young Professional Program (PJ-Comexi). The US-Mexico Foundation is a binational non-profit organization dedicated to fostering bilateral cooperation and improving the understanding between the United States and Mexico by activating key people in the relationship that once were dormant.. Twitter: @USMexicoFound
