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By Ambassador Francisco J. Barrio-Terrazas
Almost 20 years ago, Canada, Mexico and the US engaged in one of the most ambitious integration processes of recent times — we became pioneers and a model on the world stage
Our common objective was clear: we needed to cement historical trends in the movement of people, goods and capital among our three countries. That shared dream resulted in the largest free trade zone in the world, the North American Free Trade Agreement (NAFTA). Since then, integration has been the true spirit of our partnership.
NAFTA has been widely criticized and highly praised, but outcomes have undoubtedly been positive: the creation of more than 40 million jobs; trade flows have tripled to an estimated value of $1 trillion US this year; our combined GDP has doubled, and we have developed some of the most competitive supply chains in the world. Mexico is Canada's third largest partner and the third largest for the US as well. The three nations have learned that the best way to compete successfully is by capitalizing on each other's competitive advantages.
Since NAFTA came into effect in 1994, other regions and countries have intensified the negotiation of regional and bilateral agreements with more than 489 FTAs that have been notified to the WTO. This trend urges us to move faster by adapting our strengths and experiences to the new global conditions and challenges. Unfortunately, our response in the face of this changing scenario has fallen short of meeting the true needs of our industries and citizens; our leadership in the international context has faded.
The surge of security as a top priority and the new economic global order, where emerging economies will lead growth, have deviated our focus as a single block. Canada has evolved, the US has changed, Mexico has transformed, but contrary to the spirit of the NAFTA, the new dynamic emerging in North America seems to run in the opposite direction. The North American region has lost competitiveness vis-a-vis other regions: our share in global markets has decreased from 19 per cent in 2000 to 12.9 per cent in 2010, while the Asia-Pacific region (including India) has increased its market participation from 29.6 per cent to 35.4 per cent in the same period.
In December, Canada and the US signed an historic agreement on security and economic competitiveness and Mexico has intensified its bilateral approach with the US — both efforts geared toward addressing the specific issues that prevail along our shared borders. However, if we closely review each initiative, common ground is identifiable. Key elements like competitiveness, the necessity to diversify markets, security, trade facilitation, transportation and infrastructure, energy, and regional supply chains are in our common interest; let us avoid dealing with them from a partial perspective.
Bilateralism is undeniable and unavoidable in the global context, but we must not forget that North America is the keystone in our integration process. Bilateralism is a part of the equation, not the whole.
Mexico maintains its firm conviction to preserve the trilateral vision in our relationship. We are convinced that by working together, an extensive and ambitious agenda focused on competitiveness will be of benefit for the region. NAFTA has been a key element in opening new markets, bolstering innovation and enhancing our supply chains. This is not only an inward commitment; we must visualize the North American region as a unique body competing successfully in the international field.
Global market forces are moving quickly and determinedly. The world is on the verge of witnessing the emergence of the most ambitious trade and economic integration initiative of recent years, a process that will involve countries across the Pacific Rim and incorporate modern principles — the Trans-Pacific Partnership. Asia is projected to be the new engine of economic growth. Canada, Mexico and the US are facing a new opportunity to demonstrate our capacity to capitalize on our joint strength.
During the last APEC Leaders Meeting in Hawaii, Mexico and Canada officially expressed our intention to participate in this process led by the US. Mexico is convinced that maximum benefits can be reaped only if we act jointly. For Mexico and Canada, active participation in this process represents a unique opportunity to access new markets and share in the benefits of this outstanding co-operation zone.
The most renowned economic research agencies have recognized Mexico as one of the largest economies for the coming years. We can supply the US and Canadian markets in shorter times and we can jointly produce under competitive cost conditions; these realities must be recognized by our North American partners. It is imperative that we urgently mobilize to work together in a streamlined approach aimed at recovering our global presence and influence.
The three countries share borders and an entrepreneurial culture, which obliges us to co-operate and recoup our joint position. Canada, Mexico and the US must work together, transforming institutions, creating common strategies and renewing trilateral dialogue mechanisms. We must lead our industries and address the needs of our citizenry by attending to their requirements, providing the certainty they require for long-term planning, we must create jobs and attract investment; their real goals must supersede short-term events.
Better results will be achieved if North America's countries work from a common ground.
Beyond the border must run from the Usumacinta River to the Arctic, crossing the Rio Grande and the Great Lakes. Let's produce and buy North America.
