Do we need each other? – The financial one

WASHINGTON DC. One of the issues that never ceases to amaze me is the poor knowledge in Mexico of how political and economic affairs are handled in the United States. The vast majority of the US population does not care what is happening in Washington, which has only about 700,000 inhabitants, or less than half that of Iztapalapa.

If Americans take sides on an issue from time to time, it is when it affects a significant number of the population, such as the issue of abortion. Citizens are more interested in what is happening in their city than in the “big decisions” of politics. Of course, if we look at the news on CNN or Fox News it would seem that its 332 million people are all they are thinking about. I raise this issue, because of what is constantly being talked about in Mexico about the T-MEC and that without Mexico the United States would lose competitiveness and even growth. The general opinion of Mexican analysts is that, of course, it is not convenient for Mexico to leave the treaty, but it is not convenient for the United States either, and that is why nothing will happen. Little is said about Canada.

President López Obrador recently said in the morning: “It is hoped that analysts will consider the existence of a new variable for analysis: we need each other. It would be very difficult for the US economy to function without Mexico’s participation. This is no longer the time it used to be, if there were no cars built in Mexico it would cost much more for the American consumer to buy a vehicle and many other things ”.

As I said before, Mexico doesn’t understand how the United States works. Should Mexico decide to leave the T-MEC, this does not imply that tariffs would automatically be imposed on all Mexican products exported to the United States. The imposition of these would be according to the particular interests that Washington has. For example, in order not to harm their consumers, they could assign a zero tariff to all cars imported from Mexico. Instead, they could impose tariffs on other products like avocados, tomatoes, etc. So Mexico would do the same with North American products, such as apples. The United States could compensate for the loss of its farmers, as it has done on other occasions. Furthermore, AMLO’s analysis does not take into account the automation and robotization of countless industrial and agricultural activities, it is more in this sense that times have changed.

From López Obrador’s argument that the United States needs Mexico to grow and that it is not convenient for them to fight Mexico, the question is whether we need each other in the same proportion. Instead of speculating, let’s see how North American analysts would view this other data, as AMLO would say.

For example, exports from Mexico to the United States represent 83% of the total, while those from the United States to Mexico only 16%. Other even more revealing data: in 1990 the United States was the largest economy in the world, Mexico the eighth, Brazil the ninth and Canada the tenth. In 2000, the United States was still the largest economy, Canada had risen to eighth, Mexico to ninth, and Brazil to tenth. In 2020, the United States was still in first place, Canada in ninth, Brazil in twelfth and Mexico in fifteenth. It is estimated that by 2022 Mexico will drop to position 16 or 17 and Brazil will rise to position 10. With everything and T-MEC, the Mexican economy is collapsing internationally. The United States does not seem to suffer much if Mexico leaves the treaty, while Mexico, without the slightest doubt. Are you convinced that we need each other?

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