Posted: Wednesday, January 25, 2017. 9:14 am CST.
By Richard Harrison: The advent of a new presidency in the USA is causing and will cause many things to change in the years ahead.
He won the presidency based on a campaign promise “to make America strong again”….by seeking to balance America’s relationship with the world and making it more reciprocal.
The USA finances around 25% of the United Nations budget, for example.
During his campaign the new president pointed to various imbalances in the USA relationship with Mexico….rediculed the Mexican government and people, and since then has forced a withdrawal of an important FORD investment…and a sharp decline in the value of the Mexican peso…among other more subtle dismantling and negative real effects.
If there is toning down of the rhetoric of building a wall….replacement of a reward equal to or greater than the loss of FORD investment value, in the short term….and concrete acute measures taken to stop the decline of the Mexican peso…then the Mexican people can rest easy…otherwise they have to take the bull by the horn.
Mexico should see these new developments as a call to up the sophistication of its game and spread its wings….not get itself mired in a mentality of victim versus aggressor mode with the USA.
The USA trade constitutes US$1,330,881 million exports and US$1,996,998 million imports….they import around US$666,117 million more from the world than the world imports from them.
USA trade with Mexico constitutes around 15% of both total exports and imports.
Mexico trade with Latin America, given that its trade with North America constitute 90% of its total trade, is nothing to run home and tell mommy about….there is a wide open virgin space.
Mexico basically sells to the USA and buys from Asia and Europe. The Americans want and deserve more of its trade….but the peso must be stronger against the US dollar for USA goods and services to appeal more to Mexican consumers.
Taking the bull by the horn would mean taking up economic leadership of the Latin American block.
“LIMA, May 19th, 2015 – Back in the 1980’s, trade ties for Latin America and the Caribbean were very similar to those of East Asia — thin and focused on a single key player in the North, United States and Japan, respectively. Today, East Asia’s trade network is much denser and productive, crisscrossing among its countries and extending to the north. In contrast, Latin America’s remains narrow and dominated by the United States, followed at a very distant second by Brazil.” ~ World Bank
Mexico is challenged to look south….something they know for some time now, and have been preparing for….but which they have been wavering on implementation.
This leadership must be shared with Brazil, Argentina, Chile, Colombia and Panama in a reasonable arrangement of power with the other states of Latin America and the Caribbean.
They should together look after the best interest of all their people….they should compete with the USA in building a higher quality of life for their citizens living in peace….rapidly scaling up in research and development funding and patent registrations, linked to their universities and military-industrial complexes…or create alternative avenues of generating wealth.
The liberals view that patents should be free and open for use by everyone has not proved its sustainability….as moves are afoot, worldwide, to actually increase the value of proprietary knowledge and patented information….and rightly so.
Being strategically located close to the leader Mexico, Belize would be contending for the “Luxembourg” spot in this new (but old) ambition….a financial and trading hub in the sub-region….with major investments in high-end tourism, services and light production….with cooperation to provide significant assistance with improvement of governance through political and judicial reforms.
Latin America is a market that exports US$847 billion (around 60% of USA exports) and imports US$927 billion (around 46% of USA exports)….a very significant market that has a lot of development space.
BANCOMEXT must integrate with the development banks throughout the region….and the regional financial exchanges should merge and become more robust and competitive, providing world-class service. Expanding trade infrastructure, and trade itself with the region, requires significant and sophisticated financial mobilization….much of which can come from the USA itself, as it rearranges its trade with the other regions of the world.
Even as Latin American integration picks up speed, there will be the need, on a worldwide scale, for something like the Non-Aligned Movement, to balance the self-serving political powers and ambitions of the wealthy nations that will be turning increasingly inwards, following the trend being set by the new president of the USA.
Mexico….you have been called to step up to the plate.
Belize….you must do everything you can to help Mexico and Latin America achieve this objective…this is, after all, an act of survival and self-sustainability…a move that will allow us to deal with our neighbor to the north on a more fair, non-conflicting and reciprocal level.
The views expressed in this article are those of the writer and not necessarily those of Breaking Belize News.
This article was written by Richard Harrison, Belizean investor in production and services businesses in Belize. He holds a Master’s in Business Administration degree from Lancaster University.
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