This piece is from BUTTERBEAN

http://www.banderasnews.com/0505/edop-zedillo.htm


Bloomberg

Ernesto Zedillo Ponce De Leon, President of Mexico from 1994 to 2000, came to Yale in 2002 to serve as director of the Yale Center for the Study of Globalization.

Mexico can't rely on the North American Free Trade Agreement to spur growth and must also improve its policies and institutions, former Mexican President Ernesto Zedillo said.

"We never thought NAFTA could be a solution to every problem that Mexico faced in its development," Zedillo said at a World Bank debate in Amsterdam last night. "Our economic development needs to converge with the U.S.'s, but we're falling behind. We need to improve policies and institutions in Mexico."

The initial surge in exports and investment after the NAFTA trade agreement with Canada and the United States took effect in 1994 has leveled off, according to Mexican businessmen such as Carlos Slim. Remittances from Mexicans working abroad are now greater than foreign investment in Mexico's economy, said Zedillo, who was replaced by Vicente Fox as president in 2000.

Mexico's economy, the largest in Latin America, grew at the slowest pace in a year in the first quarter as U.S. demand for the nation's automobiles, textiles and appliances declined. Mexico sold 83 percent of its $46.9 billion of exports in the quarter to the U.S., where year-on-year economic growth fell to 3.6 percent in the quarter, from 5 percent growth a year earlier.

"There was the overwhelming expectation in Mexico after NAFTA that things would be solved by themselves," Zedillo said, referring to how politicians in Mexican presented the agreement to the country. "But trade isn't a silver bullet and the effect is limited if you don't do the other things right."

Chinese Competition

Mexican per person gross domestic product is about a fifth that of the U.S., according to the U.S. embassy in Mexico City. The failure of Mexican courts to enforce the law has impeded business and commerce and held back the economy, Zedillo said.

"You can't have a mortgage market unless people have title to their property," Zedillo said. "We need institutions to protect that property."

Mexico needs foreign investment in its energy industry to boost exploration and economic growth, according to Luis Ramirez, chief executive of Petroleos Mexicanos. The state oil company, accounts for about a third of the Federal government's revenue, and needs foreign companies to help it drill for deep-water deposits in the Gulf of Mexico, Ramirez said Feb. 21.

Mexican gross domestic product grew an average of 3.4 percent a year in the 1990s as Nafta helped more than triple exports to the U.S. Competition from China, with wage costs about a quarter those in Latin America, is eroding Mexico's position as the two countries compete on exports to the U.S.

Only Korea, Hungary and Thailand face tougher potential competition from China than Mexico does, Banco Bilbao Vizcaya Argentaria, Mexico's largest lender, said Monday.

Structural Reforms

Mexico is the U.S.'s second largest trading partner after Canada, according to the U.S. embassy in Mexico City, with U.S. exports growing 342 percent during the first ten years of NAFTA, from $42.85 billion in 1993 to $146.8 billion in 2003.

"Mexico still needs to implement a wide set of structural reforms to close the income gap with its advanced partners," the IMF said in a working paper last April. The rise of Chinese competition, "underscores the importance of pressing ahead with structural reforms to improve the ability of the economy to respond flexibly to these increased competitive pressures."

Export-led growth accounted for more than half of the increase in Mexico's real national income during the period 1993 to 2001. NAFTA also boosted employment in Mexico, with one of every five people now employed in export-oriented jobs.

"NAFTA, on balance, has been extremely positive for Mexico," Zedillo said. "More than half the jobs created in the modern sector of the economy can be traced back to the opening of the economy and the participation in NAFTA. But we need to do more to deliver results on the expectations."

Zedillo, a member of Mexico's Institutional Revolutionary Party, known as PRI, served as Mexican president from December 1994 until 2000 and now heads Yale University's Center for the Study of Globalization.

Ernesto Zedillo Ponce De Leon, President of Mexico from 1994 to 2000, came to Yale in 2002 to serve as director of the Yale Center for the Study of Globalization.

IMHO, Anyone out of YALE is not to be trusted with this issue. They're either CFR or UN worshipers