The economy grew by 4% last year. Over the last four years we have averaged 2 per cent growth, in part because of 2008 recession when the economy shrank by 6% due to the world-wide recession. Like Canada, we have escaped most of the effects of the global downturn. We had no problems with banks, or mortgages, but of course we are as tied to the U.S. economy as you are, so what happens there affects us directly. The last two quarters of 2011 have been good for the U.S. economy and therefore good for the Mexican economy. We export manufactured goods to the U.S. mainly, cars and products. We have tried to diversify our trading relationship with Europe, Asia, and Latin America. We have tried to join Trans Pacific Partnership, the U.S.-led initiative. Mexico thinks it makes sense for the country to be part of it. Prime Minister Stephen Harper agreed that Canada would be interested in the TPP in a half-hearted way, which immediately drove New Zealand and Australia to say they don’t want Canada. But Mexico is going forward with negotiations and we hope to conclude those before the end of the year.
Q: What are the regional issues?
There is no longer a single Latin America, which was a romantic French notion from the 19th century, a place where language was common, Spain, Portugal and France to some extent had colonized. Latin America does not act as a single entity. It no longer has a common relationship with the U.S.
Today you have five Latin Americas: Brazil, with its sphere of influence in South America; Venezuela-Ecuador-Bolivia axis, with left-of-centre influence; Central American region, which has established a solid structure of common market; the Caribbean, sub-divided into Spanish and English-speaking; and then you have Mexico. It is a different animal because of our geography, NAFTA and our being in North America. We have 18-20 million Mexicans living in U.S., of which half are American citizens, and about 6 million are undocumented.
Q: Why doesn’t the Canada-Mexico relationship resonate more?
The fact that we have the U.S. between us is always a problem. It distorts the trade figures. It is the elephant in the middle of us. That makes it more difficult for Canada and Mexico to join forces in different ways. Canada has specific interests with the U.S. that are bilateral. We don’t think our bilateral relationships need to be sacrificed for a trilateral relationship. We look at the North American sub-region as a single entity, the way many companies do. They look at us as a single market, comprised of three complementary economies. We still don’t have a North American concept politically. We don’t look at ourselves as North Americans, the way Europeans do. Polls show that we identify as Canadians, Mexicans and Americans -- though in Mexico we refer to Americans as North Americans. There is a cultural symbolic division.
Q: What could Mexico and Canada do together?
We could be more competitive. Most economic studies have shown that North America could become more competitive geographically if we collaborated, especially with mobility of labour. In the U.S., Mexican labour is used, but it is underground. We are still three separate entities and I think it is going to stay that way. Canadians can go to the U.S. under Nexus program, and Mexicans can go to U.S. under frequent traveller program, but we have not put our databases together. We have not been able to negotiate a single common customs form for the three countries to move goods freely. We are not in the North American mentality. And so as a result, what we can do at the moment, is work on the bilateral relationship and strengthen the ties.
Canada is assisting Mexico with reform of law enforcement. We have huge numbers of police force at municipal and state level, but we are constructing from almost nothing a federal force. We live in a common hemisphere.
Q: What about the drug war? What has been accomplished?