Enrique Peña Nieto's 'economy first' strategy for Mexico would also help US

Mexico confounds. If one watches the news, either here or in the United States, most of what comes out about this country is violence among the drug cartels. But if one looks at its economy, Mexico has become the largest trading partner of almost 30 US states.

President Enrique Peña Nieto, who took office on Saturday, wants to change that mismatch by putting the economy first, which will require addressing the onslaught of the narco mafia in a very different way from his predecessor. This new approach has great potential, including improved public safety, and is one that Mexico’s northern neighbor should also embrace.

Mexico’s economy grew more than 4 percent each of the past two years and is on course to do the same in this one. More jobs were created in 2011 than ever before. Twenty years of hard work and reforming Mexico’s politics and economy are beginning to pay off.

Over the past two decades, Mexicans have seen their economy stabilize, new homes being built, new roads everywhere, exports growing rapidly, consumption increasing, and a strong middle class emerging. The government’s accounts show a very small debt and a tiny deficit. Elections are organized by an independent body, and the Supreme Court is widely respected. When one looks back, it is astounding how much the country has advanced.

As Mr. Peña Nieto, of the Institutional Revolutionary Party, or PRI, takes up his new mandate, people are a bit on edge. The party that ran the country for 70 years is back in power and Mexicans are not certain what that means. Will the old PRI and its corrupt practices return? Will it be a different kind of government?

The one thing Mexicans know is that Peña Nieto, who ran a formidable campaign, will be a very different kind of president compared to his predecessor, Felipe Calderón, who focused on confronting the narco mafias, not realizing that security cannot be an end in itself. Mr. Calderon focused on confronting the mafias and attempted to eradicate drug flows. Peña Nieto aims to protect the population under the assumption that demand for drugs from the US is so strong that any attempt to eradicate will prove fruitless.

The new president’s message has been consistent: Mexicans want an effective government, one that can address and resolve pending issues (mainly economic reforms) and deliver a more robust economy. He does not dismiss the issue of violence – in fact, his proposal is to adopt a policing and judicial strategy rather than a military one. But his focus is on steep economic growth, a strategy that necessarily must include peace for Mexico’s citizens.

Both issues are closely related to the United States.

On the economic front, the connection is through trade. For Americans, the North American Free Trade Agreement is one more trade pact, even if a highly politicized one. For Mexicans, NAFTA is the foremost source of legal certainty for investors and companies in general. Mexico sought a trade agreement with the US essentially because it was a way to “borrow” American institutions and legal certainties.

1 | 2

Next