Neoliberalism In Mexico And Commercial Treaties

Neoliberalism in Mexico and commercial treaties

In Mexico, neoliberalism arises in the eighties, in a scenario of economic crisis, during the government of Miguel de la Madrid Hurtado, who begins the implementation of a series of neoliberal reforms that would be characterized by the privatization of state companies, theState contraction, the reduction of public spending and an opening of the economy, distinguished by the incentive for the investment of foreign capital, the introduction to the country of multinational companies, etc.

International treaties: Gapp and NAFTA

One of the aspects that has characterized the implementation of neoliberalism in Mexico, and that is still doing so, is its incorporation into several international trade agreements.

The first was the GATT (General Agreement on Tariffs and Commerce) and was a real economic paradigm shift in the country. Mexico promised to eliminate tariffs and import permits.

Possibly, the second signed agreement was the most decisive and the one that still continues to be more controversial. It was the Free Trade Agreement with North America, signed with the United States and Canada.

Neoliberalism originated in the 70s of the twentieth century. After the great economic crisis of 29 and the subsequent World War, the English liberalism of the 18th century had lost strength. Other more stateist systems had taken over. The appearance of the welfare state was proof of this.

The Mexican economic model had been characterized for decades by great protectionism and the weight of the public sector. From the forties of the twentieth century, numerous tariff barriers had been established that protected all sectors of international competition.

Neoliberalism seeks to break that model and create another where protectionism and state intervention disappear.

The problem with this country, like other developing economies, is that industrial policy has been anti -business, the government wants to control business, or it is too passive. But when you see countries that have used a successful industrial policy, such as the United States, Japan, Germany or South Korea, they did not do that, they promoted business by helping them with what they needed. The government needs to provide certain things that companies alone cannot generate.

State companies maintain the objective of exercising a dominant influence on their financial participation or the standards and management that govern them. It was neoliberalism that achieved that in 1993 of the 1115 state companies were reduced to 203, implementing private investment with the purpose of generating greater productivity. Such is the example of telephone numbers of Mexico, which until today has resulted as a greater economic and development concentration.