Mexico in Asia Pacific: Lagging Competitiveness and Lacking Reform

Abstract

Mexico has traditionally shown an ambivalent attitude towards the Asia Pacific region and the Asia Pacific Economic Cooperation (APEC) in particular. This sentiment has been driven mainly by the attitude of its private sector, which perceives the region much more as a threat than as an opportunity. Mexico´s vicinity with the US, the growing dependence of imports from Asia, and the need to urgently conduct domestic reforms, force Mexico to become fully engaged in APEC initiatives. However, Mexico remains at an impasse internally, being unable to take the decisions to embark in the search for markets in Asia and conduct its domestic reforms. In the meantime, the rest of the world keeps moving ahead and greater integration in East Asia keeps taking place leaving Mexico out of business opportunities. The key impediments to advance Mexico´s competitiveness and market liberalization agendas are to be found in the domestic political economy, which remains the key obstacle to pursue a more aggressive agenda in Asia Pacific and elsewhere. Although APEC´s potential has been generally oversold by its members and thus its credibility has been hampered, through an appropriate perspective of what APEC is capable of doing and what it is not, the Mexican Government could and should make much more active use of its membership, as it does with other international organizations such as the Organization for Economic Cooperation and Development (the OECD), to push for greater reform at home and further market opening both at home and abroad.