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Trade politics in the Third World: a case study of Mexican GATT decision

Published online by Cambridge University Press:  22 May 2009

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In 1980 Mexico decided not to join the General Agreement on Tariffs and Trade (GATT). Certain objective conditions formed a positive environment for Mexican adherence, but President L6pez Portillo postponed Mexican entry indefinitely. This critical decision is examined from two perspectives: a left-leaning foreign policy, and domestic constraints in the Mexican political system. Major foreign policy factors were a growing resentment of U.S. dominance combined with a preference for conducting relations with the U.S. on a bilateral basis. Internal political pressures reflected the continued reform of the Mexican political system at the upper levels and the relative autonomy of some elite groups from the state. L6pez Portillo's decision did not constitute an outright rejection of trade liberalization. However, the decision could have international repercussions in ‘politicizing’ U.S.-Mexican trade relations, in slowing trends toward freer trade (especially in Latin America), and in strengthening multilateral organizations like UNCTAD in which Third World countries exercise considerable power.

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Articles
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International Organization , Volume 36 , Issue 4 , Autumn 1982 , pp. 767 - 794
Copyright
Copyright © The IO Foundation 1982

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References

1 One analysis interpreted the link as using petroleum revenues to subsidize inefficient industries. See Wall Street Journal, 24 March 1980.

2 Wall Street Journal, 23 April 1979.

3 In April of 1981 the Reagan administration announced specific plans to graduate Mexico and four other LDCs from the U.S. generalized system of trade preferences.

4 Glade, William, “Mexico and GATT: An Evolving Relationship”, paper presented at Seminar for Instituto Mexicano de Ejecutivos de Finanzas, Saltillo, Mexico, 28 02 1980, pp. 19–20Google Scholar.

5 See Bueno, Gerardo, “The Structure of Protection in Mexico”, in Balassa, Bela, ed., The Structure of Protection in Developing Countries (Baltimore: Johns Hopkins University Press, 1971)Google Scholar; and Kate, Adriaan ten, Wallace, Robert Bruce, Waarts, Antonie, and de Wallace, Ma. Delfina Ramírez, La político de proteccidn en el desarrollo económico de México (Mexico: Fondo de Cultura Económica, 1979)Google Scholar.

6 Inter-American Development Bank, Economic and Social Progress in Latin America, 1979 Report (Washington, D.C.)Google Scholar.

7 Mathieson, John A., The Advanced Developing Countries: Emerging Actors in the World Economy (Washington, D.C.: Overseas Development Council, 1979), pp. 5–6Google Scholar.

8 Both documents as well as a statement from the Secretary of Commerce were published in all major Mexican daily newspapers on 5 November 1979. They are also contained in Spanish in GATT document #L/4849.

9 Wall Street Journal, 19 November 1979; and Glade, , “Mexico and GATT”, p. 3Google Scholar.

10 See de Brody, Olga Pellicer, “Veinte años de polítics exterior Mexicana: 1960–1980”, Foro International 21, 2 (10–12 1980)Google Scholar.

11 Of course, Mexican independence in foreign policy is not new. Various aspects of an independent Mexican stance vis-à-vis the United States in the postwar period are described in de Brody, Oiga Pellicer, “Mexico in the 1970s and Its Relations with the United States”, in Cotler, Julio and Fagen, Richard R., eds., Latin America and the United Stales: The Changing Political Realities (Stanford: Stanford University Press, 1974)Google Scholar. Also see Brothers, Dwight S., “Mexico-U. S. Economic Relations in Historical Perspective”, in Poulson, Barry W. and Osborn, T. Noel, eds., U.S.-Mexico Economic Relations (Boulder, Col.: Westview Press, 1979)Google Scholar.

12 Williams, Edward J., The Rebirth of the Mexican Petroleum Industry (Lexington, Mass.: Lexington Books, 1979), p. 104Google Scholar.

13 Blumenthal, W. Michael, “Steering in Crowded Waters”, Foreign Affairs 56, 1 (07 1978), p. 739CrossRefGoogle Scholar.

14 New York Times, 9 June 1979.

15 The Times of the Americas, March 1980.

16 In a larger context, Mexican mistrust of U.S. intentions and the probability that “undue pressures on Mexico can be expected to backfire” are discussed in Urquidi, Victor L., “A Mexican Perspective”, in Erb, Richard D. and Ross, Stanley R., eds., U.S. Policies Toward Mexico: Perceptions and Perspectives (Washington, D. C.: American Enterprise Institute, 1979), p. 30Google Scholar.

17 See Unomasuno, 11 February 1980. Ironically, the U.S. Department of Commerce issued its final determination that Mexican producers were not dumping winter vegetables in the U.S. on 24 March 1980—just six days after López Portillo's GATT announcement.

18 For example, see Unomasuno, 1 April 1980, and Excelsior, 9 May and 12 May 1980.

19 Department of State Bulletin, September 1980, p. 75.

20 Quoted from text of the speech given to this author by the U.S. Embassy in Mexico City.

21 Hufbauer, Gary Clyde, Smith, W. N. Harrell IV, and Vukmanic, Frank G., “Bilateral Trade Relations”, in Purcell, Susan Kaufman, ed., Mexico-United States Relations (New York: Academy of Political Science, 1981)Google Scholar.

22 Proceso, 24 March 1980.

23 See the text of an address by Ambassador Nava at the annual meeting of the American Chamber of Commerce of Mexico, Mexico City, 5 June 1980—available from the International Communication Agency, U.S. Embassy in Mexico City.

24 See Purcell, Susan Kaufman, The Mexican Profit-Sharing Decision: Politics in an Authoritarian Regime (Berkeley: University of California Press, 1975)Google Scholar; Stevens, Evelyn P., “Protest Movement in an Authoritarian Regime: The Mexican Case”, Comparative Politics 7, 3 (04 1975)CrossRefGoogle Scholar; Grindle, Merilee S., “Policy Change in an Authoritarian Regime: Mexico Under Echeverrfía”, Journal of Interamerican Studies and World Affairs 17, 4 (11 1977)Google Scholar; and Reyna, José Luis and Weinert, Richard S., eds., Authoritarianism in Mexico (Philadelphia: Institute for the Study of Human Issues, 1977)Google Scholar.

25 See Levy, Daniel, “University Autonomy in Mexico: Implications for Regime Authoritarianism”, Latin American Research Review 14, 3 (1979)Google Scholar, on the autonomy of higher education; Purcell, Susan Kaufman and Purcell, John F. H., “State and Society in Mexico: Must a Stable Polity Be Institutionalized?” World Politics 32, 2 (01 1980)CrossRefGoogle Scholar, on institutionalization in Mexico; Story, Dale, “Entrepreneurs and the State in Mexico: Examining the Authoritarian Thesis”, Technical Papers Series, Office for Public Sector Studies, Institute of Latin America Studies, University of Texas (Austin, 1980)Google Scholar, on relations between the state and entrepreneurs; and Camp, Roderic Ai, “Intellectuals: Agents of Change in Mexico?” Journal of Interamerican Studies and World Affairs 23, 3 (08 1981)CrossRefGoogle Scholar, on the influence of intellectuals.

26 Yet some scholars argue that certain business associations are “captive groups” of the state. For example, see Purcell, John F. H. and Purcell, Susan Kaufman, “Mexican Business and Public Policy”, in Malloy, James M., ed., Authoritarianism and Corporatism in Latin America (Pittsburgh: University of Pittsburgh Press, 1977)Google Scholar.

27 Economist, 10 November 1979.

28 New York Times, 9 June 1979, and de Lamadrid, Luis Malpica, Que es el GATT? (Mexico: Editorial Grijalbo, 1979), p. 85Google Scholar.

29 Latin American Regional Report, 15 February 1980.

30 Proceso, 18 February 1980.

31 Latin America Weekly Report, 5 September 1980.

32 In particular, see Camp, Roderic Ai, Mexico's Leaders: Their Education and Recruitment (Tucson: University of Arizona Press, 1980)Google Scholar; Camp, “Intellectuals: Agents of Change”; and Levy, Daniel, University and Government in Mexico: Autonomy in an Authoritarian State (New York: Praeger, 1980)Google Scholar.

33 For documentation, see Kelley, Guillermo, “Politics and Administration in Mexico: Recruitment and Promotion of the Politico-Administrative Class”, Technical Papers Series, Office for Public Sector Studies, Institute of Latin American Studies, University of Texas (Austin, 1981)Google Scholar.

34 See El Economista Mexicano 14, 1–2 (01–04 1980)Google Scholar.

35 Comercio Exterior is published by the National Bank of Foreign Trade. The entire issue of February 1980 was devoted to the GATT debate. Comercio y Desarrollo is published by the Ministry of Commerce. Its issue of January–March 1980 was predominantly devoted to the GATT debate.

36 Other influential critics of the GATT from the intellectual elite included María Elena Sandoval (director of the economics faculty at UNAM), Octavio Rodríguez (head of the division of superior studies in political science at UNAM), Victor Javier Ampudia Orozco (winner of the National Prize in Economics), and Julio Zamora Bátiz (another Excelsior columnist and former Mexican representative to the Latin American Free Trade Association).

37 Bonilla, Arturo, “El fracaso histórico del GATT”, Comercio y Desarrollo 2, 13 (01–03 1980), p. 45Google Scholar.

38 Ayala, David Márquez, “Un no razonado al GATT”, Comercio y Desarrollo 2, 13 (01–03 1980)Google Scholar.

39 Latin America Political Report, 25 May 1979.

40 For a more detailed discussion of the political role of the private sector in Mexico, see Story, “Entrepreneurs and the State”.

41 Wall Street Journal, 19 November 1979.

42 The interpretation of one U.S. government official working in Mexico City, as expressed to this author, was that these Mexican bureaucrats represented those who favored a “small Mexico” that would never assume a leading position in the international community.

43 Latin America Weekly Report, 21 March 1980.

44 The Ministries of Industry, Finance, Agriculture, Labor, and Foreign Relations were the five “no” votes and Commerce, Interior, and Planning and Budgeting were the three “yes” votes. The Director of the Banco de Mexico was aligned with the “yes” minority but did not cast an official vote.

45 The strongest manifestations of their position were some statements by Bernardo Garza Sada, the head of the Alfa economic conglomerate and recognized leader of the Monterrey Group, who welcomed GATT entry and said his colleagues did not fear foreign competition. See Análisis Político, 19 November 1979.

46 Cline, William R., Kawanabe, Noboru, Kronsjo, T. O. M., and Williams, Thomas, Trade Negotiations in the Tokyo Round: A Quantitative Assessment (Washington, D.C.: Brookings, 1978), pp. 207–227Google Scholar.

47 For similar arguments, see Levy, “University Autonomy”, and Story, “Entrepreneurs and the State”.

48 Though writing before the GATT issue arose and not necessarily a GATT supporter, Brody, Olga Pellicerde, in “Las relaciones comerciales de México: una prueba para la nueva política exterior,” Revista Mexicana de Sociologica 38 (10–12 1976)Google Scholar, was describing the limitations of the so-called “Third World” strategy.

49 These recent trade data come from Latin America Weekly Report, 27 February and 15 May 1981; The Times of the Americas, 22 July 1981; Comercio Exterior, November 1980 and April 1981; and International Monetary Fund, International Financial Statistics, September 1981.

50 Weintraub, Sidney, “Mexican Subsidies and U.S. Law: Potential Collision Course”, The Mexican Forum 1, 2 (04 1981)Google Scholar.

51 Latin America Weekly Report, 4 April 1980.