=== NAFTA Past – Present – Future: The 20th Anniversary of the signing of the North American Free Trade Agreement and the recent approved constitutional reforms in Mexico - education, energy and fiscal reforms === Speaker: Marcelo Ebrard UN Chair of the Global Network for Safer Cities, VP of Socialist International, former Chair of the World Mayors Council on Climate Change (2009–2012) and former Mayor of Mexico City (2006–2012) - awarded World's Best Mayor in 2010. === Introduction === Mexico City seems to be better governed than Toronto Today's discussion not about city governance, but about NAFTA: past, present, and future * Signed 20 years ago * Many issues on the NAFTA agenda Stephen Clarkson (sp?) is one of Canada's outstanding experts on the issue Canada has failed to appreciate the potential of Mexico and the importance of the NAFTA agreement === Presentation === "NAFTA produces for Mexico, from a positive balance point of view, a lot of things" * Many more exports, growth in manufacturing facilities, including auto * Positive effects in terms of macroeconomics The question about NAFTA and policy in Mexico is: 20 years later, how can you compare the inequality and poverty data from before and after? * 1993 - 51% of the population in poverty * Same in 2013 * If NAFTA was a success economically, why is poverty the same? * Average economic growth, about 2% - below the Latin American average over this period of time What's wrong with the measures and policies that have been supported? * Or, what explains the lack of different agendas to take advantage of all the opportunities in the agreement? In Canada, access to university education is about 64%, Mexico about 28% * Mexico has not invested heavily in this area over 20 years - not a priority for the Mexican government What about innovation? * In 1993, everyone expected a huge amount of FDI (never happened, really) * The other main argument at the time - Mexico will experience a great technological transformation * This hasn't happened exactly as planned * In 1993, 400 people submitted applications for new patents - the same last year * Explanation? It's easier, cheaper, and faster to import innovation from abroad, rather than work to increase the "density of technological activities" in Mexico These problematic outcomes are not the result of NAFTA, but of Mexican policies and agendas Mexico now working to change the constitution to open oil and gas development to private investment * Again, people are expecting a great transformation in the country because of this policy change * "We should change our decisions and policies to increase access to education", reduce privileges and inequality * Some pay 42% interest rates on credit cards * Removes incentive to invest money efficiently "It's not going to be enough to wait for the facts of the free market to have innovation and have more equality in our society" Second thought: future agenda between Mexico and Canada * "We should imagine a more or different agenda for the next years" * "We expected a lot of things from Canada when the NAFTA agreement was set" * Investment and innovation wave didn't happen Visa issue - more difficult to get one for Canada than for the US or other countries * May be the most difficult one to attain * Interferes with business and academic meetings "The message for Mexico is that it doesn't matter a lot the relationship between Mexico and Canada in the next years" * We should pay attention and think about what we want to do over the next 10-20 years * Competing with other parts of the world * "It's going to affect us in the same ways" "We share a lot of things" * When he was mayor of Mexico City, they had 20,000 very well educated doctors * 70% of Mexico's medical profession is in Mexico * Why didn't they conclude an agreement with Canada on medical services and development? * High quality medical services very expensive in Canada New fields, new attitudes, a shared vision * Could happen, but may not Why review NAFTA 20 years in? * NAFTA wasn't a mistake * But it is necessary to consider lessons from the past in planning for the future * Mexico was wrong to expect a free trade agreement to solve their problems * Has created some negative effects Mexico must confront its problems and propose long-term actions * There has been a huge amount of revenue from oil, due to the high international price point * Price per barrel went from $10 to over $90 now * Money wasn't used to provide wider access to universities, or to improve innovation and technological capabilities "In Mexico we need to take positions addressing those issues" - "going to define if Mexico is going to be wealthier or not" * Mexico's middle class is 25% * Increasing that requires access to university * "We should also link our universities to those (and to think tanks) from Canada and the United States" "Build an equal society" * "We can share with Canada objectives and, most important, a future" * Fix the visa issue, learn lessons, build for the next 20 years === Questions === 1) Did Canada invest oil money to improve access to education? No * "Record not far different from our record" 2) Stephen Clarkson - Many Canadians feel that NAFTA has failed * Prime problem: the success of Al Qaeda in changing the US policy paradigm from economic liberalization to anti-terrorist paranoia a) Is Mexico's frustration with NAFTA the main reason it has launched the Pacific Alliance with Chile, Peru, Costa Rica? b) Re: the environment, what about Mexico's very poor performance on environmental policy - will the Pacific Alliance deal with major environmental problems? ME: The Mexican attempt to participate in the Pacific Alliance driven by the high rate of income growth in the area * Agenda with Canada and the US focused on same issues as in previous years - makes sense to look for new opportunities alongside this Re: environmental issues - there is new civil society activity on this, especially in the field of energy * The Mexican government is promoting privatization, alongside new investments in oil, gas, and electricity * There will be a major debate on the environmental effects of this policy * Soon we will see what kind of regulations will be proposed to protect the environment * Expects an important debate about this * In 2015, there will be "a much more important debate about environmental issues" * "Green Party has been acting against the environment" * The government may not be focused on the environment, but the opposition and civil society are 3) You are critical of the Mexican government's failure to reduce inequality, provide access to education, and promote innovation * If elected president, how would you change the policy? * Where did the oil revenues actually go? "The first problem in Mexico is that we have had, in the last 20 years, the same vision and ideology" * Despite changes in government * The first thing is to change this, to open minds * How has poverty not fallen over 20 years - First, must admit and recognize that something is wrong We have $70 B from increased oil prices * Money could be used to double access to university in 10 years * Equivalent to the Apollo Program In the poorest states, access to university and high school is less than 15% * People can go to Mexico City, the US (risky), Canada is impossible Social situation in the south is the same or worse than 20 years ago * Diagnosis needs to change: "we should open oil and gas because we cannot do it by ourselves and we need money in the short term" - alternative point of view: "invest in education, innovation" * With the current lack of incentive for innovation, it's difficult to expect major change in the next 10-20 years "I am optimistic" * We can say "NAFTA was a success" or "NAFTA was a disaster", but we cannot say that poverty and inequality changed in Mexico * France prepared for WWII based on their experience in WWI * Mexico is still thinking about the 1990s - Washington Consensus, deregulation, free market recipe 4) What is the principal obstacle to access to education? Cost? Failures in high school or elementary system? ME: "The main obstacle is that it hasn't been a national priority or goal" * Must expand free university facilities * There is "stagnation in the public facilities" * There are "a huge amount of young people outside the system" * Should be a national goal, incorporating civil society and the public sector 5) Were you the elected president of Mexico, how would you change NAFTA and policy toward Canada? ME: Re-negotiating NAFTA is very complex * If Mexico wants to open 2 articles, the US may want to open 10 * Canada and Mexico could develop an agenda for how to compete with other countries, and develop middle-term actions to do so * "The Mexican approach to Canada is more complex than the visa issue" * "We should put in Mexico a grant for supporting young people who want to be scholars in Canada, and to invite scholars from Canada to Mexico" 6) Brazil has created "a rich scholarship program" * Increased number of Brazilian students at U of T by 500%