REVIEW

Building on Success

As one of Latin America’s big hitting economies, Mexico has reinforced its position as a key player in the region and is increasing its role in the international community.

While maintaining a thriving economy in the wake of the global financial crisis, Mexico has developed important bilateral relations. Through regional forums and multilateral organizations, along with its presidency of the G20 in 2012, the country’s role as an influential actor in international affairs is strengthening.

Present-day Mexico is a multi-party democracy. Led by President Calderón, the incumbent government is controlled by the right-of-center National Action Party (PAN). The President was elected in 2006 by a margin of less than 1% over the votes for the left-wing Democratic Revolution Party (PRD) candidate. The country, which is set to hold fresh presidential elections on July 1, 2012, is dominated by three large political parties: the Institutional Revolutionary Party (PRI), the PAN, and the PRD. Until the late 1990s, the PRI held continuous control over Mexico. For the first time since its inception, in 2000, the PRI lost the presidency to an opposition candidate, Vicente Fox Quesada of the PAN.

Other significant parties that enjoy considerable electoral support include the Mexican Ecological Green Party (PVEM), the Labor Party (PT), and the Democratic Convergence Party (PCD). Each political party is required to gain a minimum of 2% of the total electoral vote in order to operate as a registered party.

The president is elected by universal adult suffrage for a six-year term, and may not hold office a second time. The constitution empowers the president to select a cabinet and also to appoint high-ranking officials of the state such as the attorney general, ambassadors, military officers, and the justices of the Supreme Court. The president also enjoys the power to issue decrees that have the effect of law. For most of Mexico’s modern history, the president exercised greater control of the governmental system over the other two branches, especially during most of the 20th century when Mexico was effectively a one-party state. Congress has played an increasingly important role since 1997, when opposition parties first made major gains.

The country derives its governmental structure from the constitution adopted during the Mexican revolution in 1917, which delineates the separation of powers between the executive, the legislative, and the judicial branches. According to the constitution, national sovereignty lies with the people of Mexico, who are also constitutionally guaranteed a set of personal freedoms and civil liberties.

In 2011, President Calderón signed an amendment to enact human rights reforms and modify 11 articles of the constitution. The reforms allow the National Human Rights Commission to investigate serious violations of human rights and bring them to the Supreme Court of Justice. It also allows anyone to challenge the constitutionality of federal and local laws that might violate the rights of Mexican citizens, as well as force officials to stand before the legislative bodies for not respecting or complying with the new reforms.

Mexico’s parliament is divided into the Senate, which comprise the upper house, and the Chamber of Deputies, which forms the lower house. Members of the Senate are elected for a term of six years, while those in the Chamber of Deputies are elected for three. Members of both houses are barred from seeking reelection for the immediate succeeding term.

In order to participate in the allocation of proportional seats in the Chamber of Deputies, a political party must field candidates in at least 200 single-member districts and receive at least 2% of the total number of votes cast for proportional lists, including invalid ballots. However, no political party may receive more than 300 seats in the Chamber of Deputies and, generally speaking, no party can be awarded a proportion of Chamber seats exceeding its nationwide vote proportion by more than eight percentage points.

The Mexican Senate has 128 members. Each one of Mexico’s 32 federal entities chooses three senators: in each entity, the party or coalition with the largest number of votes receives two seats, and the party or coalition in second place obtains one seat. The remaining 32 seats are distributed in a single, nationwide constituency by the largest remainder method of proportional representation, among lists polling at least 2% of the vote, taking into account invalid ballots.

The judiciary is divided into federal and state court systems, with federal courts having jurisdiction over most civil cases and some major felonies. Under the constitution, trial and sentencing must be completed within 12 months of arrest for crimes that carry at least a two-year sentence. Mexico is currently implementing an oral adversarial justice system, where defendants have the right to counsel and public defenders are available. Other rights include defense against self-incrimination, the right to confront one’s accusers, and the right to a public trial. Supreme Court justices are appointed by the president and approved by the Senate.

The Federal Republic of Mexico is comprised of 31 states and a Federal District, which is the seat of the federal government. Each of the federal states is administratively divided into several municipalities that form the basis of local government. The governors of the Mexican states are selected by general election, and the tenure of local government lasts for six years at maximum. The president can dissolve the operation of the Mexican local governments with prior endorsement from the Senate. The state governments are dependent on the central government for all types of publicly funded activities.

TRADE AGREEMENTS

Mexico plays an important role in international trade. In 2010 it was ranked the 15th-largest exporter and importer worldwide, accounting for 1.96% and 2.01% of the world’s total exports and imports, respectively. Foreign direct investment (FDI) inflows to the country in 2010 reached $17.7 billion, representing one of the main recipients of FDI in Latin America for that year. In a 2011 HSBC report, it was estimated that Mexico could increase its foreign trade to more than 10% for 2012 and 2013.

The country’s trade regime is built upon 12 free trade agreements with 44 countries, including the US, Canada, Japan, and the EU. These agreements liberalize the trade tariffs between regions and have made Mexico one of the most open countries for trade. The US and Canada are the two largest importers of Mexican goods.

From the 1930s through part of the 1980s, Mexico maintained a strong protectionist trade policy in an effort to be independent of foreign influence and as a means to promote domestic-led industrialization. However, Mexico’s unilateral trade liberalization efforts in the late 1980s and early 1990s were implemented to improve economic conditions in the country, gain greater investor confidence, and attract more foreign investment. The Mexican economy has undergone nothing short of a revolution since the start of the North American Free Trade Agreement (NAFTA) in 1994, going from being relatively closed to highly diversified and service driven. The goal of NAFTA was to gradually eliminate barriers to trade and investment between the US, Canada, and Mexico over a 15-year period, resulting in a single economic market with a population of over 450 million people and a GDP of over $15.5 trillion.

Although the US is Mexico’s most significant trading partner, with about 80% of Mexico’s exports going to the country and 49% of Mexico’s imports sourced from its northern neighbor, Mexico has sought to diversify in order to reduce its economic dependence on the US.

In 2000, Mexico entered into a free trade agreement with the EU called the Economic Partnership Political Coordination and Cooperation Agreement, which committed the parties to eliminate trade barriers over a 10-year span. The motivations for the agreement were to expand market access for exports from the EU to Mexico and attract more FDI from the EU to the country. In 2008, Mexico and the EU agreed on a strategic association to further advance trade liberalization and address climate change.

The Mexican government has also expanded its outreach to Asia by entering into negotiations with Singapore, Korea, and Japan. In 2004, Japan and Mexico signed the Economic Partnership Agreement (EPA). In addition to the removal of tariff barriers, it includes regulations in other areas, including labor mobility and investment.

FOREIGN RELATIONS

Under the current administration, President Felipe Calderón has prioritized international relations and transformed the country’s foreign policy, playing an active role in solving major global challenges. Since the 2008 worldwide financial crisis, Mexico been prominent in identifying measures to deal with the crisis and resume global growth. Mexico has also assumed responsibility for hosting the main economic forum for the 20 largest economies, the G20.Green growth has also been one of the focuses under Calderón’s presidency. The President has implemented a strategy to boost collective action and strengthen multilateralism. At the 16th United Nations’ Conference on Climate Change, COP16, Mexico’s presidency led to unprecedented agreements on mitigation, adaptation, and financing and technology, increasing the country’s recognition as one of the key players on environmental issues worldwide.

Latin America and the Caribbean have been a high priority in international discussions. Mexico led the Rio Group from 2008 to 2010, and at the “unity summit” in Cancún, it pushed for the formation of a new bloc with Latin and Caribbean leaders, the Community of Latin American and Caribbean States (CELAC). Its 33 members encourage regional integration, boost commerce, and form a common front to deal with regional issues such as global warming and drug trafficking.

The fifth annual North American Leaders’ Summit, which took place in Guadalajara, Mexico, in 2009, enabled the leaders of Canada, Mexico, and the US to build on a strong cooperation between the three countries in regards to environment and energy, security, and global and regional issues. In late 2011, the US gave its first permit to a Mexican firm to transport international cargo, a major achievement to promote trade and open up opportunities for Mexican companies.

As part of the integral reinforcement of its relationship with the rest of the world, the Mexican government has implemented a strategy to extend bilateral and multilateral collaboration through the creation of the Mexican Agency for International Cooperation for Development (AMEXCID). Through these initiatives, Mexico turns to face the international community in confidence and optimism, while preparing to welcome a new administration on the domestic front in mid-2012.