Why Mexico's Calm Exterior Hides a Shiver
Foreign firms dominate exports, banks increase reserves amid rising consumer debt, the peso faces speculative pressure despite stability, inflation persists in key sectors, agricultural self-sufficiency is hindered by past practices.
Welcome back to The Mexicanist, where we peel back the layers of the official narrative to reveal the vibrant, sometimes perplexing, pulse of Mexico's economy. This week, we dive into the subtle tremors beneath the surface of seemingly robust trade figures, the quiet concerns brewing in bank boardrooms, and the unique challenges facing everything from bean farmers to cattle ranchers.
A Concentrated Comeback
The North American trade pact, formerly NAFTA, now the U.S.-Mexico-Canada Agreement (T-MEC), is often hailed as a triumph of continental integration. It's a bedrock of cross-border commerce, designed to foster shared prosperity. Yet, a recent report from the venerable La Jornada presents an intriguing, perhaps uncomfortable, nuance to this narrative: some 75% of Mexico’s exports are concentrated in the hands of a mere 515 transnational companies. The vast majority of these corporate leviathans, we are told, hail from the United States, diligently leveraging Mexico’s lower production costs and, notably, its more modest wage structures.
