However,
there now seems to be a real opportunity to advance sweeping reforms that
previously would have been dismissed as unrealistic. In President Peña Nieto's
inaugural speech he laid out a bold vision for a new Mexico, emphasizing the
need to improve security and justice, combat poverty, provide quality education
for all, establish solid economic growth and reposition Mexico in the world.
Shortly afterwards, the main political parties came together to endorse a new pact
for Mexico, including 95 pledges across the full range of policies. And perhaps
most impressive of all, in recent months the Mexican Congress has been able to
deliver a notable down payment on the reform agenda by passing two key reforms with
broad support from across the parties: a labor market reform offering greater
flexibility and an education reform aimed at improving teaching standards.
Once
we landed in Mexico City, our four cabinet department-strong delegation quickly
engaged in a series of meetings with our Mexican counterparts. While many of
them had only recently arrived in their positions, they all had clear ambitions
to push forward bold agendas.
From
my viewpoint in Treasury, the cornerstone of the reform effort will be the
fiscal reforms being prepared in the Secretaria de Hacienda y Crédito Público,
the Mexican finance ministry. Mexico's revenue to GDP ratio is among the lowest
in the Hemisphere, second only to Guatemala, and Mexico is highly dependent on
potentially volatile revenues from the hydrocarbon sector. With a continuing
commitment to balancing the budget, the ability to fund infrastructure,
education and social programs will depend on finding ways to broaden the tax
base and enhance revenue collection. Officials in the Hacienda also emphasized
their commitment to increasing transparency and accountability of public
spending so that taxpayers can be confident that their money will be well
spent.
In
all of our meetings, there was a focus on identifying concrete initiatives that
could be quickly advanced together by our two Governments. A central priority
will be to work together to improve transportation links between Mexico and the
United States to further promote the increasing integration of supply chains
and enhance the global competitiveness of manufacturing across the North
American region. This will involve building on the 21st century border
initiative and working to improve infrastructure at the border, to harmonize
regulations and enhance air transport links.
We also welcomed Mexico's participation in the negotiations on the Trans-Pacific Partnership, a broad effort to put in place a high-standard agreement, that can serve as a new template for free trade across the Pacific.
After
a few days south of the border, all four of us came away
encouraged by the drive for reform and the strong interest in our two governments
working together on a very practical agenda. We felt the effort to do the trip
jointly had fully achieved its objectives since many of the projects will
indeed depend on close cooperation across our agencies. We re-affirmed our commitment
to continue to work together to realize both President Obama’s and President
Peña Nieto’s vision for deepening the economic relationship between our
countries and thus boosting both nations’ economies.
Charles Collyns is the Assistant
Secretary for International Finance at the U.S. Department of the Treasury.