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The Historic Dimensions of Free Trade with Mexico

In the universal history of shortsightedness, the U.S.'s relations with Latin America deserve a special chapter. Cuba is now only a sinking island and Nicaragua a rising democracy; both countries have ceased to be news. But to remember the cost, the duration and the depth of the trouble they brought about only a short while ago-Cuba was on the point of provoking a nuclear war, Nicaragua a vast subversion-is to realize that there has been a fundamental error in the U.S. perception of the region.

Decades earlier, in books, essays and articles, Latin America’s democratic voices had clearly warned of the perils of growing resentment against the U.S. in their countries and offered practical ways of prudently dispelling it. The U.S. did not listen to these voices. When the Cuban and Nicaraguan revolutions finally broke out in 1959 and 1978, it was too late to prevent them and even too late to redirect them.

Until recently, something similar was happening with Mexico. If there was an eruption in this volcanic country, the U.S. paid attention; if not, it ignored us. A natural or financial earthquake, an avalanche of corruption or drug abuse, these are the things that attracted the spotlight, If life went on peacefully, the spotlight faded. But something else also faded: an accurate perception of the situation in Mexico, and as a result the U.S. failed to take any actions that might encourage development within Mexico and a buildup of stronger relations between our two nations.

Yesterday's vote by the U.S. House of Representatives in favor of negotiating the Mexican-U.S. Free Trade Agreement (FTA) on fast-track signals a fundamental change in that historical perception. It acknowledges the quiet but revolutionary changes that have taken place in Mexico in the past two years. And perhaps even the U.S. isn’t quite aware of how fundamental its recognition of those changes could be in helping to ensure a more positive future direction for Mexico. There are two diametrically opposed possible futures on the Mexican horizon: By the year 2000, we will look either much more like Spain or much more like Peru. Current probabilities, of course, point to the former.

Mexico is a country with a solid institutional structure and a profound culture. lf the populist administrations of Luis Echeverria (1970-1976) and Jose Lopez Portillo (1976-1982) had been a little less blessed with economic resources or more endowed with moral and intellectual resources, oil and credit would have been channeled productively and Mexico could have stepped into the foyer of the First World. This did not happen. Under Presidents Echeverria and Lopez Portillo, the system's defensive and authoritarian instincts took over and pushed the country into the Third World.

During the administration of Miguel de la Madrid (1982-1988), Mexico began to correct its economic course. His successor, Carlos Salinas de Gortari, has intensified the changes. President Salinas's economic performance has been outstanding, and in many ways exemplary. He modified deeply rooted tendencies through renegotiation of the foreign debt, control of inflation and reduction of the budget deficit. But his privatization policies (banks, the telephone company, steel mills, airlines) and the limits that he put on the most powerful labor unions from the very beginning have achieved something more important: overcoming statist taboos in a society of taboos. President Salinas's social policies also have chalked up notable gains- in particular, his advancing war against drug dealers and his implementation of effective aid programs -potable water, electrification, schools, etc.- for the poorest Mexicans.

His political performance, on the other hand, has been much less successful. In truth, Mexico is still far from being the "federal, representative, democratic republic" voiced by our Constitution. In many ways it is a centralist monarchy, with a new king ascending the throne every six years. Nevertheless, with our positive economic scenario, why should we speak of a remote possibility of a Peruvian future, one in which hunger, war and plague outweigh any progress? The reasons are many: Aside from the frequent natural disasters, there is an ancient tradition of violence in Mexico that in revolutionary times (1910 to 1929) took more than a million live; there is a surviving populist temptation and a visible national leader (Cuauhtémoc Cárdenas) who represents it; there is an influential class of young university students for whom the failure of authoritarian socialism in Eastern Europe and the U.S.S.R. has no meaning and has provided no moral lesson (in their judgment, the enemy is the U.S. "neoliberalism" that threatens our resources, culture and sovereignty): there is a sector of the church that works with poor communities and not only believes but also practices liberation theology; there is a growing, justifiable Irritation with the electoral frauds committed by the ruling Institutional Revolutionary Party; and there is, above all, a generalized feeling of economic oppression. These are all elements that could lead to deterioration and backsliding.

In this context it is not an exaggeration to consider the future signing of the Free Trade Agreement as historic. Beyond its economic logic (clear for any intellectually consistent American), its material benefits and its social sense, the FTA will have at least two important additional advantages: It would favor the proliferation of a business culture in México, and it would have a ripple effect in Central America, a region with which Mexico -the Northern giant- already has proposed a free-trade agreement.

Spain was, until recently, an economically backward country ruled by a dictator. Since 1975, thanks to years of economic opening and development, Spain has become a normal, modern, European democracy that successfully sells its products, its sun and its past-exactly the things that Mexico will be able to offer more readily if we finally overcome our greatest creed: "Thou shall not trust Americans.”

As with Spain, the vast economic forces unleashed by free trade will spur the transition to democracy. Doing business in the private sector will become more profitable -and less risky- than doing business in the public sector. Transparency and accountability will be the norm, not the exception. These and other changes are not utopian: They are at hand in many areas of Mexico, and they are being demanded by growing sectors of our society.

A closed political system cannot survive long in an open economy. Chile and Spain have proved that. After the signing of the FTA, the unfinished chapter-long-postponed democracy - is for us Mexicans to write. With solid economic foundations, the transition will take months, not years or decades. Although he was the "caudillo of Spain" supposedly "through the grace of God," Franco died. Mexico's undemocratic political system, with or without the grace of God, will perish too.

The Wall Street Journal

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