Breathe
By Barbara Anderson
A confidential meeting between Mexican and U.S. trade officials at the 1990 World Economic Forum in Davos had a multiplier effect that no economic analyst (nor the region's own authorities) could have predicted.
Like a mojarra that wants to eat the whale, our country proposed to the largest market on the planet to be partners, eliminate bilateral trade barriers and create a free trade region that would allow for clear rules between two partners forced to coexist geographically and historically.
Although negotiations formally began a year later and along the way Canada raised its hand to join as the third pillar of this economic bloc, the truth is that this month will surely be one of strong memories for Jaime Serra Puche (then Secretary of Commerce) and his counterpart on the other side of the border, Carla Hills.
Thirty-five years ago, in that snowy Swiss city, Serra Puche was trying to convince the American official that this was a historic opportunity, a global juncture that could be used to their advantage. The Berlin Wall had just fallen, the European Union was about to be inaugurated and a world trade map was being reordered where China was not even in Nostradamus' notes.
After the long negotiation -which even survived the arrival of Bill Clinton to the presidency of the United States- on January 1, 1994, a trilateral trade mechanism was set in motion that today moves 3.6 million dollars (mdd) per minute. And if we only consider Mexico and the United States, we are talking about $1.5 million dollars in that micro period of time, that is, $2.16 billion dollars per day.
Going back in time, in January 1994 we traded between the two countries only $100 million dollars a day.
When the North American Free Trade Agreement (NAFTA) came into force in January 1994, the world was introduced to the world's largest free trade zone.
Today, the three countries together make up the most dynamic region on the planet, accounting for almost a third of the world's GDP and more than 16% of the total merchandise trade of an economic bloc with more than 500 million people.
But, with hindsight, January seems to be a complicated month for this treaty.
In 2017 Donald Trump was sworn in for the first time and with his arrival at the White House he put NAFTA on the brink of the abyss. The 'worst treaty in history', as he called it, was opened for the first time in 23 years and after a complex renegotiation it became the T-MEC and entered into force in 2020.
Twists of fate put the same president in the White House again and one of Trump's campaign promises was to call free trade into question -again- and promise to impose tariffs on the two treaty partners and his main trading partners (us and Canada). Many do not believe that the agreement will make it to the first review scheduled for July 2026 without further bruises.
January 20 is a pivotal date for trilateral trade: Trump takes office for his second term and has shown signs of putting his signature to the threats. January 1, 1994 was also a historic date when it came into force.
As was the private meeting in Davos in January 1990 when Mexico was encouraged to change its relationship with the United States, to set clear rules and to change the economy in a radical way.
The opinions expressed are the responsibility of the authors and are absolutely independent of the position and editorial line of the company. Opinion 51.
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