The stellar Mexican economic reform of the past 20 years is trade opening. Beyond its many free-trade agreements, the country had been unilaterally lowering trade barriers, signaling that the intellectual case for giving consumers choice through competition had been won. Trade policy was moving in the direction of Chile and away from protectionist Brazil.
Less
than a month after Mexican President Enrique Peña Nieto took office on Dec. 1, 2012,
his government suspended for one year scheduled tariff reductions on shoes
imported from China. A year later the tariff cuts were suspended again. Twelve
days ago, Finance Minister Luis Videgaray announced that there will be no
reduction of the 25%-30% Chinese shoe duties during the Peña Nieto government.
On
a trip to Leon, the shoemaking capital of Mexico in the state of Guanajuato,
Mr. Videgaray also announced that the government would assign a minimum import
value to all shoes from China and give new subsidies to local footwear
manufacturers. In other words, he has raised taxes on low-income consumers and
agreed to channel scarce resources to politically powerful special interests.
Within
a few days, textile producers and apple growers began asking for their own
handouts.
To
his credit, Mr. Peña Nieto has spent significant political capital to reform
the constitution to allow private investment in Mexico's energy sector, promote
competition in telecom, and introduce accountability in public education. So
it's tempting to dismiss the shoe duties as a venial sin committed by an
otherwise virtuous, reform-minded administration.
But
structural reforms in a few key sectors will not have their desired effect if
economic freedom is not more broadly promoted. On that score the Peña Nieto
government is coming up short. From fiscal policy to trade and regulation, the
evidence is mounting that the first PRI government in 12 years seeks to restore
the centralization and bureaucracy that made the party so powerful in the 1980s
and also made Mexico so poor.
Brazil
illustrates the dangers. It deregulated telecom and energy more than a decade
ago. That brought a lot of foreign capital to the country but did not transform
the economy.
It
may even have slowed things down. The Brazilian political class saw no reason
to incur the costs of further liberalization when the world was pouring dollars
into new deep-water oil concessions. It ignored the pain inflicted on
entrepreneurs by a suffocating tax and regulatory framework, subsidies and
protection for uncompetitive domestic manufacturers, and the wholly politicized
development bank, even while it trumpeted a new phase of development. The
so-called Brazilian breakthrough quickly turned into the Brazilian bust.
Mexico
has free-trade agreements with 44 countries, including the North American Free
Trade Agreement with the U.S. and Canada. This puts it light-years ahead of
Brazil in opening. But it is still a long way from becoming a vigorous
free-market economy. Mr. Peña Nieto has raised expectations by talking about
the aim of faster growth. But he's not always walking the walk.
No
one doubts that, warts and all, the new laws governing energy could bring tens
of billions of dollars in fresh capital to Mexico. Yet elsewhere and below the
headlines el diablo lurks. A truly free market in telecom
would imply putting the 700 megahertz spectrum—crucial for mobile broadband—on
the auction block without any restrictions in technology and service usage.
Instead the government has set it aside for "public-private
partnerships," which in countries with a weak rule of law can also be
known as "taking care of my friends."
It's
true that Mr. Peña Nieto has had to do some horse trading with special
interests to get his large structural reforms through. But that cannot explain
bad decisions that were not part of the bargaining and are certain to undermine
growth.
In
2013, Mr. Videgaray engineered a fiscal reform that imposed new taxes on
capital and dividends and progressively higher income-tax rates for anyone
earning more than $38,000. The heavier tax burden came with new entitlement
spending and a return to fiscal deficit.
The
finance minister is promoting government credit allocation, always a bad idea,
by expanding the role of the largest "development" bank. Earlier this
year a Videgaray-inspired antitrust law gave the government the broad power to
punish companies for the crime of being more successful than their competitors.
The
stellar Mexican economic reform of the past 20 years is trade opening. Beyond
its many free-trade agreements, the country had been unilaterally lowering
trade barriers, signaling that the intellectual case for giving consumers
choice through competition had been won. Trade policy was moving in the
direction of Chile and away from protectionist Brazil.
Now
the government is messing with that too, as shown by its decision to extend
protection to the shoe industry. Backing off scheduled tariff cuts suggests
that the industry is flagging, but in fact the ministry of finance reports that
from 2009 to 2012 the number of shoe and leather jobs grew by almost 8,000 to
125,464.
Mr.
Videgaray's decision is capricious and political. Guanajuato has been a
stronghold of the opposition PAN for many years and the PRI would like to win it
back. I get that. But at what cost to Mr. Peña Nieto's legacy as the man who
changed Mexico?
fecha |
Título |
05/07/2023| |
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05/10/2016| |
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15/07/2016| |
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26/05/2016| |
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14/04/2016| |
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11/02/2016| |
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11/11/2015| |
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03/06/2015| |
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15/04/2015| |
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15/04/2015| |
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23/03/2015| |
|
16/03/2015| |
|
09/03/2015| |
|
23/02/2015| |
|
27/01/2015| |
|
13/01/2015| |
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22/12/2014| |
|
09/12/2014| |
|
02/12/2014| |
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15/11/2014| |
|
14/10/2014| |
|
07/10/2014| |
|
24/09/2014| |
|
15/09/2014| |
|
09/09/2014| |
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26/08/2014| |
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11/08/2014| |
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21/07/2014| |
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18/07/2014| |
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10/07/2014| |
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17/06/2014| |
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16/05/2014| |
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07/05/2014| |
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22/04/2014| |
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09/04/2014| |
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25/03/2014| |
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23/03/2014| |
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26/02/2014| |
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19/02/2014| |
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18/02/2014| |
|
03/02/2014| |
|
03/02/2014| |
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07/01/2014| |
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03/12/2013| |
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26/11/2013| |
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12/11/2013| |
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23/10/2013| |
|
17/10/2013| |
|
15/10/2013| |
|
06/10/2013| |
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17/09/2013| |
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12/09/2013| |
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27/08/2013| |
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23/08/2013| |
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06/08/2013| |
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13/05/2013| |
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17/04/2013| |
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18/03/2013| |
|
10/03/2013| |
|
27/02/2013| |
|
07/01/2013| |
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26/12/2012| |
|
26/12/2012| |
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11/12/2012| |
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04/12/2012| |
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28/11/2012| |
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22/11/2012| |
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20/11/2012| |
|
14/11/2012| |
|
05/11/2012| |
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29/10/2012| |
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22/10/2012| |
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07/09/2012| |
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30/08/2012| |
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21/08/2012| |
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15/08/2012| |
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31/07/2012| |
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31/07/2012| |
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23/07/2012| |
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18/07/2012| |
|
10/07/2012| |
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19/06/2012| |
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11/06/2012| |
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06/06/2012| |
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09/05/2012| |
|
07/05/2012| |
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30/04/2012| |
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19/03/2012| |
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06/03/2012| |
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06/03/2012| |
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19/10/2011| |
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12/10/2011| |
|
03/10/2011| |
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03/10/2011| |
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03/10/2011| |
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27/09/2011| |
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27/09/2011| |
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23/09/2011| |
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21/09/2011| |
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04/09/2011| |
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04/09/2011| |
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02/09/2011| |
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02/09/2011| |
|
24/08/2011| |
|
24/08/2011| |
|
10/08/2011| |
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02/08/2011| |
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26/07/2011| |
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26/07/2011| |
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19/07/2011| |
|
19/07/2011| |
|
12/07/2011| |
|
12/07/2011| |
|
21/06/2011| |
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21/06/2011| |
|
15/06/2011| |
|
15/06/2011| |
|
13/06/2011| |
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13/06/2011| |
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25/05/2011| |
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24/05/2011| |
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24/05/2011| |
|
17/05/2011| |
|
17/05/2011| |
|
17/05/2011| |
|
17/05/2011| |
|
15/05/2011| |
|
15/05/2011| |
|
10/05/2011| |
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10/05/2011| |
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26/04/2011| |
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26/04/2011| |
|
20/04/2011| |
|
20/04/2011| |
|
19/04/2011| |
|
19/04/2011| |
|
13/04/2011| |
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12/04/2011| |
|
08/04/2011| |
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23/03/2011| |
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22/03/2011| |
|
17/03/2011| |
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01/03/2011| |
|
28/02/2011| |
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13/02/2011| |
|
08/02/2011| |
|
01/02/2011| |
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01/02/2011| |
|
04/01/2011| |
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04/01/2011| |
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29/12/2010| |
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21/12/2010| |
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20/12/2010| |
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15/12/2010| |
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07/12/2010| |
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30/11/2010| |
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23/11/2010| |
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16/11/2010| |
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10/11/2010| |
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08/11/2010| |
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22/10/2010| |
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17/10/2010| |
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11/10/2010| |
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05/10/2010| |
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22/09/2010| |
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31/08/2010| |
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31/08/2010| |
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23/08/2010| |
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23/08/2010| |
|
04/08/2010| |
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26/07/2010| |
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20/07/2010| |
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20/07/2010| |
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29/06/2010| |
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22/06/2010| |
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22/06/2010| |
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12/06/2010| |
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24/05/2010| |
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18/05/2010| |
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17/05/2010| |
|
11/05/2010| |
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27/04/2010| |
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26/04/2010| |
|
13/04/2010| |
|
12/04/2010| |
|
07/04/2010| |
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31/03/2010| |
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29/03/2010| |
|
24/03/2010| |
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23/03/2010| |
|
03/03/2010| |
|
03/03/2010| |
|
22/02/2010| |
|
22/02/2010| |
|
09/02/2010| |
|
08/02/2010| |
|
01/02/2010| |
|
27/01/2010| |
|
12/01/2010| |
|
16/12/2009| |
|
16/12/2009| |
|
14/12/2009| |
|
14/12/2009| |
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24/11/2009| |
|
24/11/2009| |
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23/11/2009| |
|
23/11/2009| |
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16/11/2009| |
|
16/11/2009| |
|
15/11/2009| |
|
15/11/2009| |
|
10/11/2009| |
|
10/11/2009| |
|
05/11/2009| |
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29/10/2009| |
|
20/10/2009| |
|
13/10/2009| |
|
08/10/2009| |
|
30/09/2009| |
|
22/09/2009| |
|
16/09/2009| |
|
01/09/2009| |
|
21/08/2009| |
|
18/08/2009| |
|
10/08/2009| |
|
10/08/2009| |
|
29/07/2009| |
|
29/07/2009| |
|
28/07/2009| |
|
28/07/2009| |
|
23/07/2009| |
|
23/07/2009| |
|
16/07/2009| |
|
16/07/2009| |
|
16/07/2009| |
|
24/03/2009| |
|
05/03/2009| |
|
05/03/2009| |
|
05/02/2009| |
|
15/01/2009| |
|
03/12/2008| |
|
03/12/2008| |
|
25/11/2008| |
|
25/11/2008| |
|
12/11/2008| |
|
12/11/2008| |
|
18/09/2008| |
|
18/09/2008| |
|
06/09/2008| |
|
06/09/2008| |
|
27/08/2008| |
|
27/08/2008| |
|
28/07/2008| |
|
28/07/2008| |
|
08/07/2008| |
|
08/07/2008| |
|
23/06/2008| |
|
23/06/2008| |
|
12/06/2008| |
|
12/06/2008| |
|
15/04/2008| |
|
09/04/2008| |
|
03/04/2008| |
|
11/03/2008| |
|
25/02/2008| |
|
07/02/2008| |
|
29/12/2007| |
|
18/11/2007| |
|
29/10/2007| |
|
26/09/2007| |
|
20/09/2007| |
|
05/08/2007| |
|
14/07/2007| |
|
30/05/2007| |
|
30/05/2007| |
|
17/01/2007| |
|
17/01/2007| |
|
10/10/2006| |
|
28/07/2006| |
|
06/03/2006| |
|
21/02/2006| |
|
09/07/2005| |
|
24/08/2003| |
|
24/08/2003| |
|