Democratic Openness and Strong-Willed Diplomacy

Mexico, the world’s tenth economic power, is a land of sharp socioeconomic contrasts striving for revival. One year after Felipe Calderon took over as president, H.E. Carlos De Icaza, the Ambassador of Mexico to France, talks about the new government’s action plan and campaign to boost relations with Europe, starting with France.

The Diplomatic Letter: Nearly a year has passed since Felipe Calderon took over as president of Mexico, a country facing a great many challenges. Could you describe the measures the current government has taken to modernize Mexico’s development model?

H.E. Carlos De Icaza: President Felipe Calderon is committed to improving the Mexican people’s standard of living without sacrificing the heritage of future generations.
To that end, shortly after taking office, President Calderon laid out a National Development Plan that focuses on five main areas: the rule of law, and security; a competitive economy that creates new jobs; equal opportunities; sustainable development and effective democracy; and a responsible foreign policy.
President Calderon has said, time and again, that finding real solutions to the problems confronted by our fellow citizens is the biggest challenge facing Mexico’s political leaders.
He has stressed that Mexico must implement structural reforms with this in mind. The long-awaited tax reform package enacted by the Congress, after long and difficult negotiations, was the first achievement born out of the president’s commitment to reform. This has generated an additional 130 billion pesos in tax revenues, which amounts to 1.1% of GDP.
These tax reforms have also eased the fiscal burden on the state-run company Petroleos Mexicanos by some 30 billion pesos, which can now be invested in exploration and operating refineries.
Along these same lines, a few weeks ago the Mexican Congress enacted an important electoral reform that will shorten federal election campaigns and cut the cost of holding elections. As part of this reform, it has been decided that political candidates will not be able to purchase direct airtime on radio or television to publicize their campaigns, for the first time in the country’s history. They must now go through the Federal Electoral Institute, which will allocate airtime following a preset schedule. Mexican society had been hoping and praying for this reform, which constitutes a giant step forward towards opening up Mexico’s democracy.
President Felipe Calderon has also launched an ambitious infrastructure construction program. Close to two trillion five hundred billion pesos will be invested in this program between 2007 and 2012.
All of these measures bear witness to the Mexican government’s determination to overcome the great challenges facing our country, as it strives to create new jobs and foster development, security and economic growth.

T.D.L.: Mexico is an OECD country with a GDP of roughly $800 billion, making it the world’s tenth economic power. Could you summarize the Calderon government’s key priorities, as it works to make the country’s economy more competitive and increase its export capabilities?

H.E.C.D.I.: The first priority is to reassess and eliminate any administrative measures that are slowing down or impeding the creation of new businesses or the expansion of trade. For instance, any national standards or regulations that discourage entrepreneurs from starting new companies or hinder or slow down commercial operations. Our competition laws and regulations are being reexamined as well.
Providing better export assistance and actively promoting trade is another key priority. The goal is to promote Mexican foreign trade more effectively on the global stage by creating a special agency that will bring all government trade programs under the umbrella of one single entity, called ProMexico. This agency’s structure, mission, strategic vision and objectives will be presented in detail when it begins operating, which is expected shortly.
The government is also drawing up and implementing measures to assist small- and medium-sized enterprises (SMEs), with the aim of facilitating their creation and making more government aid available for hiring workers and manufacturing and exporting Mexican products. Among the key measures launched in support of SMEs, we should make special mention of the programs that provide financing, advice, training, technical assistance and export aid, along with programs that make general information available to the public.
Finally, we would like to expand and improve the key programs underway in Mexico to foster manufacturing and exports. The programs already being carried out in Mexico include the Maquiladoras, Pitex, Drawback, Altex, Immex and Ecex export promotion programs, as well as the Prosec assembly-line programs.

T.D.L. President Calderon’s action plan lays special emphasis on environmental protection. Could you summarize the president’s main goals in this area for our readers?

H.E.C.D.I.: Safeguarding environmental excellence in Mexico and around the world is a top priority in President Calderon’s action plan. Mexico recently adopted a National Strategy on Climate Change designed to cut the country’s greenhouse gas emissions by 80 to 100 million tons by the year 2012. This is one of the most ambitious environmental policies ever put forward by an emerging economy.
Mexico has called upon the international community to go even further than the Kyoto Protocol and update international tools for addressing environmental problems. President Calderon recently announced that he intends to propose, at a time and place yet to be determined, that the international community set up a multinational fund to tackle the problem of climate change.
At the national level, the ProArbol program has been launched with the aim of planting some 250 million trees this year in Mexico. This is is one-fourth of the objective set by the United Nations. Mexico will thus have planted one out of every four trees planted around the globe in 2007. This will lead to the reforestation of roughly 250,000 hectares, or an area as large as Belgium.
In fact, President Calderon’s conscientious efforts to protect the environment have won him wide praise from the international community.

T.D.L.: President Calderon has said he would like Mexico to engage in “active diplomacy.” Could you outline your country’s main foreign policy objectives, with special focus on its ties with Latin America?

H.E.C.D.I.: President Calderon’s government is committed to implementing a responsible, clear and active foreign policy, with the aim of making Mexico a true advocate for human development at every level of society.
President Calderon has said very clearly that Mexico can and should play a role within the international community commensurate with its real importance and true potential and abilities. It must do this on both the regional and the world stage. We must start from the fundamental principle that it is absolutely essential for Mexico to have a stronger presence around the world, and for the world to have a stronger presence in Mexico.
Latin America and the Caribbean will always be a top priority for Mexico, because of the historical and cultural heritage and aspirations our country shares with this region. We believe it is absolutely essential to strengthen, in a responsible manner, all forms of dialogue that reflect Mexico’s key role in this region and weight on this continent.
Mexico is well aware that there is still wide debate in the region over the effects of globalization and its implications for democracy and development processes. This debate is testimony to the democratic vitality and plurality that prevails on the continent. In like manner, President Calderon has repeatedly confirmed his desire to strengthen our country’s ties and dialogue with the Latin American region as a whole. The president has pushed forward in this direction since taking office, making a clear rapprochement with Latin America.

T.D.L.: Your country has been a member of NAFTA (North American Free Trade Agreement) since 1994. Has this accord produced positive benefits? In what direction would you like to see the North American regional integration process move forward?

H.E.C.D.I.: The North American region is now of utmost importance to Mexico in terms of economic ties and trade. NAFTA, which took effect on 1 January 1994, is making better use of the complementarity between the economies of the United States, Canada and Mexico, in terms of distributing resources, improving production processes and making the region more competitive. It has fostered a new, higher quality corporate culture and enhanced our competitiveness on the global market. It has also spurred new initiatives aimed at easing barriers to world trade.
We are seeing the clearest benefits from NAFTA in the realms of trade and investments. Trade has nearly tripled within this region, climbing from $303 billion to $904 billion since the agreement took effect.
Mexico’s foreign trade with the United States and Canada has quadrupled over the same period. This preferential market access has given Mexican exports a particularly strong boost. Mexico’s exports to its two NAFTA partners rose from $44.4 billion in 1993, to $217 billion in 2006. They totaled $109 billion in the first quarter of 2007. Mexico has become the United States’ third leading supplier, with its market share jumping from 5.4% to 10.8% since NAFTA took effect.
In the thirteen years the treaty has been in force, customs fees have almost completely disappeared. Production factors have been redistributed throughout the region, stimulating even greater complementarity between the three economies and ensuring greater trade-product complementarity in several fields of activity. The automobile industry, for instance, has been totally integrated. Mexico, like the United States and Canada, is now producing a variety of automobile parts, components and finished products for the entire region. Mexico’s partners are sending it different parts, components and products that it is integrating into its own domestic production lines. In North America, a car can now cross the border up to seven times before the production process is complete. In 2006, Mexico exported 1.4 billion automobiles to the NAFTA region.

T.D.L.: President Felipe Calderon and French President Nicolas Sarkozy held their first meeting this past June 6th in Paris, where they announced their determination to enhance cooperation between the two countries. How would you describe current relations between Mexico and France? Are there any specific areas in which you would like to see bilateral ties strengthened?

H.E.C.D.I.: Our countries have excellent bilateral relations. Mexico and France champion a wide number of shared stances within international bodies. They cooperate very closely in the cultural and scientific arenas. And they are in 100% agreement on the need to continue strengthening their economic ties, both as concerns trade and financial dealings.
President Felipe Calderon was the first Latin American president to visit Mr. Nicolas Sarkozy after the elections in France. During their meetings last June, Mexico’s president confirmed that our country considers its ties and cooperation with France of utmost importance. Our two countries share a deep commitment to democracy and champion common values, such as liberty and respect for human rights.
After their first meeting, our two presidents decided to give bilateral ties a fresh boost and to enhance cooperation between the two countries.
President Calderon and President Sarkozy announced that they intended to open a new chapter in bilateral relations, enhancing their political dialogue, increasing trade ties and creating new cooperation programs in a variety of areas of shared interest. Let me stress, by the way, that the French President called Mexico a strategic partner for France.
The two presidents also agreed to set up a binational group comprised of leading figures from each country’s economic, academic and social worlds, who will put forward short-term recommendations for strengthening bilateral relations.
Our two countries have long had excellent cultural ties, and are united by a strong friendship. In recent years, we have further strengthened these ties within multilateral bodies, frequently championing common positions on issues on the international agenda.
During their talks, the two presidents agreed that stepping up trade and economic ties was of utmost importance, along with boosting cultural and education exchanges. Both acknowledged that bilateral trade ties between the two countries have not been developed to their full potential and are not commensurate with the role the countries play in the world.
Furthermore, President Felipe Calderon has reissued an invitation to Nicolas Sarkozy to come visit Mexico.

T.D.L.: Could you tell us what Mexico is doing to boost trade flows? Are there any specific sectors in which trade between our two countries could be expanded?

H.E.C.D.I.: Despite the numerous advantages created by our free trade agreement with the EU, with an eye to increasing bilateral trade, few Mexican companies have been able to seize the opportunities opened up by this instrument, and those who have tried have not met with much success. Reassessing and improving our strategies for promoting Mexican exports in France has hence become absolutely vital, especially in sectors where Mexico has already proved its competitive advantage on the world market: electronics, household appliances, the automobile industry, chemicals, textiles, the clothing and craft industries, etc.
And while it is true that customs barriers against Mexican exports have virtually disappeared in France, we need to keep fighting to eliminate other obstacles, especially those targeting agricultural products.
Sometime in the near future we need to conduct negotiations on agriculture, services and investments, working through the aforementioned EU-Mexico accord. We must also strengthen cooperation programs like the Integrated Support Program for SMEs in Mexico (PIAPYME), launched in August 2004 to make technical assistance, training and information services available to Mexican SMEs looking to break into the EU market. We should also bolster the Program for the Facilitation of the EU-Mexico Free Trade Agreement (PROTLCUEM), launched in October 2006 to enhance the competence of the Mexican government institutions tasked with implementing the agreement as pertains to customs issues, technical standards, health and phytosanitary regulations, competitiveness, foreign investment, intellectual property, and consumer protection.
As far as potential French investments in Mexico are concerned, the National Infrastructure Protection Plan has identified specific projects for the 2007-2012 period that will require investments totaling at least 4% of GDP, or around 2.5 billion pesos, in order to modernize our country’s infrastructure and restore Mexico’s competitiveness in this area.
It should be noted, for instance, that Mexico will need to make considerable investments in road works (287 billion pesos), the electricity sector (380 billion pesos), hydrocarbon production (822 billion pesos), and gas and petrochemical refineries (379 billion pesos), which amount to 74% of the funds earmarked for the program for the period in question.

T.D.L.: Seven years after the signing of the Mexico-European Union Free Trade Agreement, has this accord helped boost bilateral ties?

H.E.C.D.I.: On July 1st of this year, we celebrated the seventh anniversary of the implementation of the free trade agreement signed between Mexico and the European Union. Bilateral trade totaled $42 billion in 2006. This is 133% more than in the year prior to the implementation of this agreement.
Mexican exports to the EU have also risen 166%, totaling $13 billion in 2006.
Mexican exports to the rest of the world increased 80% over this same period. We has seen the most growth, in terms of value, in sectors that manufacture consumer goods, automobiles, and office equipment.
Mexican imports from the EU have increased 124% since the agreement came into force, totaling $29 billion in 2006. Roughly 80% of these imports are input (products needed to keep agricultural operations running) and capital goods, which help to make Mexico’s productive capacities and exports more competitive.
With regard to investments, thanks to the Mexico-EU Free Trade Agreement, and the network of accords Mexico has signed with fourteen EU member states for mutual promotion and protection of investments, we have managed to create a transparent and business-friendly framework.
Between March 1994 and March 2007, Mexico received more than $53 billion in productive investments from the EU. This was nearly 25% of the total amount received over this period. Nearly 70% of the cumulative total of European capital that poured into Mexico was invested before the free trade agreement came into force.
This is the first agreement of this kind negotiated between the EU and a country on the American continent. I should also underscore that the EU has strengthened its position as Mexico’s second trading partner and the second supplier of foreign direct investment (FDI) to our country.

T.D.L.: Mexico’s and France’s heads-of-state have also laid high priority on bilateral cultural relations. Could you describe French-Mexican ties in the cultural, scientific and education arenas? What could be done, in your opinion, to help enhance them even further?

H.E.C.D.I.: Being able to count on strong cooperation between Mexico and France in these areas gives us grounds for great satisfaction. Mexico is a country of tremendous cultural wealth, both in terms of its historical heritage and the quality and breadth of its modern and contemporary art.
In the educational arena, the National Autonomous University of Mexico is Latin America’s foremost university and is widely recognized as one of the world’s most important institutes of higher education.
Moreover, Mexico and France are each drawn to the other’s great wealth of knowledge. We share the same political and intellectual traditions. Mexico’s ties with France were decisive when our country moved forward to hook itself to the modernity train, in the 20th century.
Cooperation between our two countries in the educational sphere has grown steadily stronger with the passing years. France makes numerous university scholarships available to Mexican students, and Mexico has returned the favor by granting French students 81 scholarships over the past five years.
In the scientific and technology arenas, we have agreed upon a cooperation agreement that will enable us to carry out projects in every scientific field. We also have two joint laboratories: a computer science lab and an automation lab. We have agreements focusing on the health sciences, and accords on research and development and technical and professional training in the automobile industry.
Bright new prospects for further strengthening our cultural ties are opening in front of us. This is, indeed, an excellent opportunity to enhance our cultural cooperation, in light of President Calderon’s and President Sarkozy’s announcement this past March that they are eager to revive this aspect of our bilateral ties.
We have already taken the first step forward in this direction, by organizing the “Meeting of Mexico-France Museums” in early October in Mexico. This should lead to the organization of several important exhibitions in both Mexico and France, which we will have the pleasure of admiring in the coming years.