ASSESSMENTS

Trade Profile: Mexico Focuses on the United States

Jun 19, 2017 | 09:15 GMT

International trade is a tenet of Mexico's economic policy today. For much of its modern history, however, the country took a defensive stance toward free trade.
International trade is a tenet of Mexico's economic policy today. For much of its modern history, however, the country took a defensive stance toward free trade.

(Marcelo Rodriguez/Shutterstock)

Summary

Editor's Note: Global trade is changing. The kinds of multilateral agreements that characterized the postwar years have stalled out over the past two decades, prompting countries and economic blocs to try to negotiate smaller deals with fewer partners. Nations and blocs have more leeway under this new model to negotiate the trade agreements that best suit their interests and to avoid those that don't. Now, more than ever, the future of international trade depends on a country or bloc's defensive interests, offensive interests and underlying factors of production. Our fortnightly Trade Profiles aim to break down these factors to facilitate an understanding of where global trade stands today and where it's headed.
 
In the third installment, we focus on Mexico.

The United States defines Mexico's trade strategy. Its proximity to and free trade agreement with the world's largest market -- and the generator of 25 percent of global gross domestic product -- is Mexico's main advantage over its peers in the developing world. And its abundant, comparatively cheap labor pool gives the country a distinct advantage over developed nations such as Canada, too. Mexico has spent the past two decades building a substantial manufacturing base intended to supply the U.S. market. Today, its main strategic interest lies in preserving its trade access across its northern border, and its trade policy focuses largely on defending its share of the U.S. export market against foreign competitors....

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