Simon Levy | Mexico, there is life after NAFTA
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Mexico, there is life after NAFTA

Mexico, there is life after NAFTA

I never thought I was going to see the predictions of Toffler turn true so quickly, nor Lipovetsky’s reality so dramatically presented.

I had a professional formation in public and private universities in Mexico and around the world; I have lived in more than 10 cities in the last 20 years. I grew up in the unipolar boom of capitalism and my train of thought was deeply impacted by the philosophy of Socialism with Chinese characteristics.

I’m a witness to a generation that saw the broken promises of neoliberalism. The supposed medium-term stability ended up taking us to a dangerous stagnation with profound disparities.

We are now becoming witnesses of the return of protectionism in supposedly industrialized countries, such as the United States, and the new trade tariff war (especially steel), is this merely temporary? Will it fade away after Trump? Definitely not: a deep crisis of the economic model is happening.

The intermediation economy, where a system based on the importing of materials that will be exported once processed, turned us – as I have been saying for more than 15 years – into a passthrough serfdom.

Yes, it is true that intermediate producers represent 30% of the world’s manufacturing commerce and 25% of total commerce (UNCTAD); it is also true that we have lived basically in a manufacturing commerce. But it is also true that the intra-multinationals commerce (those which import and export to themselves), is equivalent to 30% of all global activity (UNCTAD), and they are responsible for 50% of exports to the United States. It is also true that 93% of its activity is to assemble parts whose final destination is this North American country, with one fundamental objective: Hyperconsumption.

The United States and Europe created a neocolonial system of development that today, ironically, is suffering due to the trail of countries that once were considered underdeveloped and have taken advantage of the circumstance to climb social stages and transform themselves into emerging countries.

So, the supply of primary manufacturing countries from 40 years ago has turned into an offering of value goods, of intangible assets and techniques. What’s happening today in the world is that countries that only had to dedicate themselves to primary manufactures due to the specialization of international commerce, began to turn into competitors of developed countries in a quicker and bolder fashion. That’s why the capitalist commerce model fell into a crisis.

Subletting of the assembly plants didn´t create specialized human capital in Mexico, and the surplus of the investments that Serra Puche boasted would come due to our abundant cheap labor force ended as a temporary dream of the neoliberal business club. Capital moved towards where production was maximized since they didn´t understand that marking down jobs isn’t what brings in long-term investments, it’s the capacity to create competitive ecosystems (livable cities that function, regions that create and attract talent).

Because of this, today, the most important structural reform we have before us is that of changing the economic system in Mexico. 2018 is not a presidential election, it´s a plebiscite of the continuity or the transformation of the regime. More of the same thing results in a cosmetic joke.

Now that the NAFTA agonizes and that China is constituting itself as the emerging global power, I’m convinced that the new trends of commerce and the economy will evolve from the age of commercial treaties to an era of shared value integration in ecosystems with industrial affinity (no more treaties between countries but production agreements between talent municipalities that will attract technical capacity stocks and will process data to create knowledge).

The reason? Today, as free trade tariffs are practically open, and the commerce of goods is transformed into a commodity, surprisingly economies are being closed by other types of barriers.

Nonetheless, the only thing to which a tariff or tax duty cannot be added is to knowledge or creativity.

So once trade tariffs of goods have been brought down, the new champions of economic growth are the regions and countries that understand that it is no longer possible to build walls, but instead need to attract knowledge.

Due to this, the new commercial cooperation agreements, where energy, agriculture, applied technologies and the industry of transformation will create the new tribes of countries assembled not around commerce, but around value creation.

Mexican neoliberalism ended up being codependent to the NAFTA, and didn’t want to understand anything about community development, nor about collective economies.

The future is becoming faster and shorter. Mexicans, it’s our turn to create our own reality, no longer import it.

– Simón Levy-Dabbah