Former president of Mexico reflects on NAFTA

“It allowed Mexicans to begin changing … the way
they look at our very complex neighbor to the north,”
said Salinas, who spoke at the James A. Baker III Institute
for Public Policy March 15. NAFTA changed “the way
the two governments relate as well, more through institutional
channels and less through discretionary means,” he
said.

With 3,000 years of culture behind them, Mexicans feel very
strongly about remaining Mexicans, Salinas said. But with
the passing of NAFTA, “we proved that it’s possible
to sustain the principle of sovereignty and at the same
time strengthen the relationship with the only superpower
in the world,” he said.

Discussing his new book, “Mexico: The Policy and Politics
of Modernization,” Salinas recollected how his country
became involved with the initial proposal to establish the
biggest free-trade area in the world.

In November 1988, Salinas, then president-elect of Mexico,
met in Houston with President-elect George H.W. Bush, who
recommended that the United States and Mexico have a free-trade
agreement, but Salinas rejected the idea. “I considered
that having two huge negotiations going on simultaneously
was too much to handle for us,” Salinas explained.

“When the Mexicans first heard about the possibility
of negotiating NAFTA, there was an understandable reaction
of caution and mistrust,” Salinas said. “Some
Mexicans were worried that the size of the American economy
would be so overwhelming for the Mexican economy that it
might at the end possibly swallow us.”

The process of modernization entails change and a reaction
to that change. “Whenever you introduce transformations,
you must know there will be a reaction from the interests
affected by that process of change, so it’s a constant
struggle, and politics are always present,” said Salinas.

Salinas had to convince his country that to create enough
employment opportunities in Mexico to promote economic growth,
the markets between the neighboring countries needed to
be liberalized.

“We were able to negotiate intensely for more than
two years,” he said. When the United States, Mexico
and Canada signed the agreement in 1991 that would reduce
tariffs among the three countries, it was a “win, win,
win” situation, Salinas said.

The initial optimistic projections for NAFTA estimated that
Mexican imports would increase to $40 billion per year from
$16 billion. Salinas noted that Mexican imports to the United
States are almost $200 billion, reaffirming that the decision
to approve NAFTA was the right thing to do. The competitiveness
of industrial activities in the United States grew too as
a result of increased trade relations mostly within the
industry, he added, citing the U.S. automobile industry’s
links with manufacturing plants in Mexico as an example.

Salinas praised Bush’s “willingness to open the
door to a relationship that would not be looking so much
to the tensions of the past, but to opportunities of the
future” when NAFTA was first proposed. Salinas also
commended the Mexican-American community in the United States
for supporting the agreement, recognizing that “their
very important heritage south of the border would play a
very important role in opening business opportunities for
their own community.”

Salinas would like to see Chili and other countries in Latin
America reach free-trade agreements with the United States
too. “It would send a tremendously positive sign to
the rest of the region … showing that the way of liberalizing
markets with social programs and with the democratic process
is no doubt the way of the future for other societies,”
he said.

During a question-and-answer session after his talk, Salinas
cited major challenges that Mexico currently faces: reducing
the public deficit, strengthening the rule of law and enacting
financial, rural and labor reforms. He currently resides
outside of Mexico but returns to his homeland more and more
often. “My commitment will always be to live in my
country,” he said, noting that Mexico is his home.

Salinas served as president of Mexico from 1988 until 1994.
He succeeded Miguel de la Madrid Hurtado, becoming the first
presidential candidate from the Institutional Revolutionary
Party (PRI) to face competitive elections, which he won
with 50.4 percent of the vote.