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Can Mexico reclaim title as region's largest economy from Brazil?

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On his first visit to Brazil, in which he met yesterday with business leaders and meets today with President Dilma Rousseff, Peña Nieto offered a clean slate in terms of bilateral relations, strained in recent years by Brazil’s rise as a global powerhouse and Mexico’s more recent focus on its ties to its northern neighbor, the United States.

“We are constantly designated as being two economies that are in competition and occasionally in rivalry,” Peña Nieto said in a statement issued in Sao Paulo. “When, really, we should find an opportunity for better integration, for better commercial exchange between both countries.”

Duncan Wood, director of the international relations program at the Autonomous Technological Institute of Mexico, or ITAM, describes Peña Nieto’s approach as “‘Let’s try to reset our relationship. Let’s treat each other as equals and see how we can help each other out.’”

“Because it’s a different political party than the last 12 years, I think it provides that opportunity,” Mr. Wood says. “Can the rivalry be turned into a partnership now?”

Latin American giants

The relationship is not without tension. Mexico was once Latin America’s darling, but in the past decade Brazil has far surpassed it. Commodities drove economic growth, earning it a spot in the BRIC club (Brazil, Russian, India, and China) – the emerging economies to watch, while Mexico’s stable-but-sluggish growth seemed lackluster by comparison. As Mexico faces dwindling oil reserves, Brazil has made a giant oil find. As Mexico’s drug-related violence has been aired around the world, Brazil’s anti-crime initiatives in Rio de Janeiro have been applauded globally.

“I have the sense that we are a lot freer in Brazil,” says Iolanda Villard, who works at the federal tax agency. “Mexico is so dangerous because of the violence of drug traffickers.”

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