A Voice Among Many

What is the core of Mexico’s foreign policy and how has the secretariat been working to make Mexico’s voice heard amongst multilateral institutions and organizations worldwide?

Mexico’s foreign policy is guided by a firm belief of the country’s right to self determination. Within this basic premise, our foreign policy has been guided by the protection of human rights, free trade, and the pursuit of global solutions to global problems. Because of our history, culture, and geography, Mexico has always been a country open to the outside world. We firmly believe that our integration with the rest of the world will translate into higher welfare for our citizens. Mexico has 13 free trade agreements (FTAs) in force, giving us privileged access to 44 different countries. Our foreign trade in 2012 reached a record $740 billion, accounting for two-thirds of our GDP. This is not random; it is a consequence of a shift in our economy in the past 20 years, which has moved from an oil-dependent, import-substitution scheme to an open market in which manufacturing accounts for over 80% or our total exports. I firmly believe that our foreign policy should work toward the creation of new economic opportunities, and we are working steadily on different fronts. We are in negotiations to build a free trade area with Chile, Colombia, and Peru within the Pacific Alliance. The Pacific Alliance will be a regional platform to promote closer ties with the South Pacific area. Mexico has been participating in the negotiations of the Trans-Pacific Partnership since October 2012. We have been extremely successful in achieving increasing trade volumes with our North American partners. We are also ready to seek new opportunities in those markets in which we have a limited exchange, but that will certainly drive the shape of the world economy in the following decades. Mexico has always been a strong advocate of international institutions as facilitators of global dialogue. Our strength in multilateral institutions derives, I believe, from our non-ideological approach and our desire to be pragmatic and consensus building. It is also derived from our willingness to shoulder our share of responsibility in global governance. Some recent examples are our participation in the UN Security Council in 2009-2010, the hosting of the UN Climate Change Conference in 2010, and the G20 chairmanship during 2012.

In what ways will the new administration be pursuing a more modern and pro-active approach to foreign policy?

President Peña Nieto established five clear axes for his government: security, education, prosperity, inclusiveness, and global responsibility. The fifth component, ensuring that Mexico acts with responsibility in the global arena, falls squarely in the realm of foreign policy. It calls for Mexico to be an active participant in finding solutions to short-, medium-, and long-term global challenges. It implies that in the bilateral, regional, and multilateral arenas, Mexico’s positions must be in accordance with the search for a better world for all. Our foreign policy, however, goes beyond being a responsible global actor. In fact, foreign policy must be geared toward the achievement of all five axes of government and not only the last one. To that end, we foresee four main pillars for our foreign policy strategy: our bilateral, regional, and multilateral policies; our overseas development assistance policies; our policies to promote Mexico in the economic, cultural, and tourism arenas; and our policies aimed at protecting Mexicans and Mexican interests outside of our territory. As I mentioned above, our foreign policy must leverage our domestic policies. Our offices abroad will be extremely useful in achieving our goal. Mexico has the largest network of consulates in the US; actually, it is the largest consular network that any country has in another single nation: 50 offices spread from Anchorage to San Diego, and from San Juan to Boston. We also have 75 embassies and 16 consulates distributed throughout the world. President Peña Nieto recently addressed our diplomatic corps and instructed ambassadors and consuls to get directly involved in this institutional effort to promote Mexico as a destination for business and travel. The goal is to engage our diplomats in regular actions of public diplomacy that reach wider audiences. As head of the Secretariat, I will personally coordinate this endeavor, which I am sure will be successful in the medium term. On a parallel track, we are committed to the adoption of increasing actions toward cooperation for development. The Mexican government recently set up its own Agency for International Development, which has proved of tremendous help in coordinating the international aid that Mexico offers to third-party countries. We have taken part in different projects throughout Central America and the Caribbean, in which Mexico has financed or offered technical support in the design and implementation of several programs. These include constructing hospitals and markets in Haiti, supplying electricity to our partners in Guatemala and Honduras, and modernizing border crossings in Panama and Costa Rica. We strongly believe that as Mexico’s economy grows, we must help our neighbors and friends bring about further opportunities for development.

Securing a framework for legal and safe immigration to the US remains a key issue for Mexico. How do you expect to see Mexico’s relationship with the US evolve over the coming years?

In the coming years we will see our countries continue to act as responsible partners. Beyond our bilateral agenda, we realize that working together will help each government achieve our respective domestic priorities, such as job creation. I am certain that we will continue to develop and implement joint views on areas of common interest; for instance, on border management, scientific innovation, and environmental protection. We support an open and inclusive international economic system, and will work alongside our Canadian and US partners to enhance North America’s competitiveness. The US and Mexico currently trade over $1.2 billion every day, and we are the first or second foreign market for 22 of the 50 US states. Yet, there are still many opportunities for growth. One of the important issues is immigration. We respectfully promote an informed discussion of the many dimensions of this subject, from family reunification concerns to economic variables. Our legal frameworks should reflect the region’s demographic realities. Mexico remains committed to supporting the wellbeing of its citizens abroad, and this is a central concern of President Peña Nieto’s administration.

How do you believe the Pacific Alliance will increase free trade and economic integration?

We must take into account that the four member countries of the Pacific Alliance have some common features. All four have investment-grade markets; they are open economies, outward looking, and are keen to diversify their trade and economic partnerships. All four of them have FTAs with the US. The allied countries combined represent a population of 200 million, 50% of Latin America’s imports and exports, and over 34% of the region’s GDP. Taken together, the Pacific Alliance represents the world’s ninth largest economy. The Alliance receives 41% of foreign investment directed to Latin America. The Pacific Alliance will go far beyond free trade because it seeks an integration that allows the free flow of goods, services, investments, and people. On the trade side, the Pacific Alliance will seek to eliminate all import duties between member countries by the end of 2013. We also want to move on to more ambitious goals. We are working together to enhance our links with Asia, the world’s most dynamic region. The key stated objectives of the Pacific Alliance include increased trade with Asia, especially with the 10-nation Association of Southeast Asian Nations (ASEAN). The Pacific Alliance makes sense as no Latin American country on its own—even the largest ones, like Mexico—has the export capacity to single-handedly supply manufactured goods to Asia’s giant markets. If Latin American countries want to sell cars, refrigerators, or shoes to Asia, they will have to create joint production chains and negotiate joint trade deals. This is a relevant goal that the Pacific Alliance is facing. The four countries are building a new framework with common rules of origin and trade facilitation in order to enhance productive integration. Also, the Pacific Alliance will establish joint export promotion offices in Asian countries. Finally, Chile, Peru, and Mexico are also involved in other relevant processes with Asian countries, including the Trans-Pacific Partnership (TPP), which is being negotiated between the US, Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. Colombia will follow shortly. The TPP is a comprehensive and high-standard FTA negotiation process. It will liberalize trade in nearly all goods and services to include commitments beyond those currently established by the WTO. When implemented, the TPP will eliminate tariff and non-tariff barriers to trade and investment among the parties, serving as a template for a future trade pact among APEC members and potentially other countries.

How important are collaborative efforts between Mexico and other Central American countries to the strength of the region, and what initiatives are you undertaking to improve relations?

Central America and the Caribbean region are of the utmost priority for Mexico’s presence abroad. Historical, social, and economic ties link Mexico to the region and, therefore, Mexico has assumed its political commitment to be an important player in all cooperation and development issues in the region. Our countries share common challenges, and we can also find joint solutions if we work together under a framework of mutual responsibility. Certainly, much of the focus has shifted lately to security and immigration issues, but there is a large threshold of opportunity in the economic, social, and development fields that should be reinforced and promoted. As an example, since 2008, under Mexican leadership, the Mesoamerica Project unites 10 countries (Guatemala, El Salvador, Belize, Honduras, Nicaragua, Costa Rica, Panamá, the Dominican Republic, Colombia, and Mexico). The purpose of this mechanism is not to create a new bureaucratic body but a platform to find solutions in eight main areas of action. Moreover, in 2011, during the last Tuxtla Summit, Mexico set up the Yucatán Fund, which provides resources through innovative financial schemes to support the development and integration strategy in the region. With an initial endowment of $160 million, Mexico was able to provide resources to three infrastructure projects in Honduras, Nicaragua, and Belize. The current portfolio presented by the Mesoamerican countries is increasing and Mexico will continue its financial and technical support as long as the projects fulfill two requirements: they must have a strong social impact, and they should also consider a regional spillover of benefits. Mexico wants to become a beacon in the cooperation for development field in the region. We are committed to sharing our best practices and institutional development experiences with those countries that share common problems with us. And we are also working in more traditional cooperation stages; for instance, we want to increase the number of grants and scholarships for Mesoamerican students to come and study in Mexico.

What impact did the G20 event have on Mexico’s profile in the region, and what conclusions were reached as a result of the meeting?

I would like to highlight that two important meetings took place in Los Cabos last year under Mexico’s G20 presidency: a G20 informal meeting of Ministers of Foreign Affairs, on 19-20 February, and the G20 Leaders’ Summit, on 18-19 June. The informal meeting of Ministers of Foreign Affairs, the first of its kind in the context of a chairmanship of the G20, was designed to draw on G20 foreign ministers’ multilateral experience and global vision. It intended to explore the ways in which G20 member countries could contribute more effectively to addressing key challenges in global governance. The meeting fostered a constructive and open dialogue on enhancing policy coordination and coherence to improve global governance. The agreements made in the Los Cabos Leaders Summit cut across all the priorities Mexico championed during its presidency: to restore economic stability and growth, to strengthen the financial system and expand financial inclusion, to improve the global financial architecture, to enhance food security and address commodity price volatility, and to promote sustainable development, green growth, and the fight against climate change. The G20 summit reached a significant agreement for the global economy, ensuring an increase in the financial resources available to the IMF of over $450 billion, which doubles the capacity of the IMF to make available loans to countries in need. This is the largest expansion of resources that this institution has ever had, essential for dealing with times of global economic crisis. The Los Cabos Action Plan for Growth and Jobs adopted by G20 Leaders set out specific commitments on fiscal, monetary, and structural issues to secure global financial stability, strengthen global demand, and procure economic growth. The leaders agreed to extend the commitment not to implement further protectionist measures until 2014. This is a significant achievement, given that since the Toronto Summit in 2010, the G20 had not been able to agree to extend this political commitment beyond 2013. I believe the G20 Mexican presidency has helped enhance our country’s role both regionally and globally. We are still playing a very active role in the G20 under the Russian presidency. As members of the G20 Troika, along with Russia and Australia, we continue providing strategic guidance to the works of the group and support the Russian presidency’s outreach dialogue strategy.

What is your outlook for 2013?

I am very optimistic about Mexico’s potential for this year. Our macroeconomic stability, strong institutions, and dynamic private sector place us in a most favorable spot to take advantage of both internal and external opportunities. Even though this year will likely still be marked by the legacy of the economic downturn of 2009-2010, a period of increased global stability looks more likely than not. There are of course still challenges ahead and we should all work to ward them off. The US’ long-term solution to its fiscal challenges and the stability of the eurozone are still the main sources of potential risk. However, progress has been made on both fronts. Authorities in the US are keenly aware of what is at stake and Congress and the administration are working together to reach a lasting solution. Along the same lines, the European Commission and European Central Bank, as well as all national European governments, have been most responsible in taking appropriate action to contain the contagion from crisis countries. European leaders have proved with concrete actions that the European project remains worthy and alive. Mexico thus faces an external environment that can be supportive of reasonable economic growth rates in the coming years. The extent to which we take advantage of these conditions will be determined in part by our ability to resolve long-standing structural issues that have held back our potential. The signals we are seeing from different actors indicate that the right conditions can be found to advance.

© The Business Year – February 2013