Viernes 28 de Junio 2024

Mexico in the Midst of the Trade Conflict Between the United States and China

Foreign policy in trade matters must avoid “picking fights” with either side: Former Mexican Ambassador to the World Trade Organization

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Mexico is a middle power that can and should take advantage of its privileged position, not only geographically but also in light of the reconfiguration of the global trade order. However, it must be strategic to avoid “picking” conflicts between the two largest economies in the world that are in dispute, the United States and China. Additionally, it must enhance cooperation to address global challenges such as climate change, transnational organized crime, and irregular migration.

These were some of the points raised by experts convened by the Mexican Institute of Strategic Studies on National Security and Defense to participate in the Dialogues on "Global Factors Affecting the Mexico-U.S. Relationship: Economy and Security Towards 2030."

During his participation, Roberto Zapata Barradas, former Ambassador of Mexico to the World Trade Organization (WTO), stated that the tensions between China and the United States, Mexico’s main trading partners and whose economies are fundamental to ours, go far beyond trade, so Mexico must be very strategic.

“We are facing a global reordering, and we must pay attention to how consensus will be built in the field of future trade rules; our role as a country must be strategic and assertive, knowing how to read the trajectory of the relations between China and the U.S.”

In an interview with El Heraldo de México USA, Zapata Barradas highlighted that the United States is existential for Mexico, but China is becoming increasingly important. In fact, he emphasized, we are very dependent on the Land of the Dragon.

“China is in the top five of our export markets and is one of our main suppliers of inputs. Mexico exports around $100 billion to China, of which a high proportion, possibly a bit more than 80%, are inputs that our country incorporates into its own production processes to subsequently export its manufactured goods to other markets, including the United States.”

“Both are important players in our country's trade policy; the United States is the main trading partner, meaning from a trade policy point of view, the U.S. is existential. Mexico cannot live without preferential access to the U.S. market and must preserve that access and strategically formulate its foreign policy accordingly. China is very strategic because it enhances the competitiveness of Mexico’s manufacturing base,” he elaborated.

Mexico must formulate a foreign policy to avoid positioning itself in a scenario where it has to choose. As a country, he reiterated, Mexico has the experience to navigate and avoid putting itself in a position where it complicates life by having to pick a fight with one or the other.

Mexico can navigate these turbulent waters, he warned, but it is possible, he concluded.

Greater U.S.-Mexico Cooperation Needed to Face Global Threats

During the inaugural conference of the panel “Challenges of Mexico-U.S. Economic-Trade Integration,” career ambassador and columnist for El Heraldo de México, Miguel Ruiz Cabañas, emphasized that Mexico is a middle power, being the twelfth largest economy in the world, having the necessary resources for the energy transition, being the sixth country in attracting the most investments, and the second in receiving the highest remittances, among other factors that favor the nation.

However, he also said, as a country, we face great challenges such as food poverty, social inequality, lack of technological innovation, and low economic growth, which has been around 1% in recent years, very little for a country of our size, he stated. Additionally, there are issues like violence, organized crime, and the lack of rule of law and sustainable human development.

The international relations expert noted that the most important challenge Mexico faces on the global stage is being in the middle of the hegemonic competition between the northern neighbor and the central country.

“On one hand, we are neighbors, partners, and allies of the United States - not in the military realm, he clarified - but China is Mexico's second-largest trading partner, and Mexico is obligated to define its strategy and rules of engagement with both superpowers.”

Finally, he pointed out that other real global risks that Mexico must consider in its relationship with the United States are greater border control, terrorism, climate change, and biodiversity loss.

These latter are real global threats whose effects, such as prolonged droughts, heat waves, and water scarcity, can have significant social impacts.

“Economic crises, desperate migrations, global water stress, and in northern Mexico and southern United States can at least provoke strong bilateral discussions over the distribution of scarce waters. Additionally, the growing irregular migrations that generate increasing rejection in the United States and pass through Mexico and transnational crime are global risks that demand much greater U.S.-Mexico cooperation at the bilateral, regional, and sometimes global level within the framework of the United Nations,” he concluded