Mexico sends out cry for help
President Ernesto Zedillo was last night expected to announce the package as part of an austerity drive to rein in the country's $28bn current account deficit.
Due to address the nation at 2 AM London time, Mr Zedillo is calling for "additional sacrifices" and structural changes to make Mexican industry more competitive.
Since 21 December, when the Mexican currency was floated, the peso has fallen 40 per cent, sending shock waves through the newly formed North American Free Trade Agreement trading block.
Since the creation of the North American tariff-free zone, imports into Mexico have flooded in at the rate of $1bn a week, a big increase on the previous year. Exports from Mexico to the north have also increased but not fast enough. Trade with the United States has risen 21 per cent while that with Canada grew 29 per cent.
Nafta has been blamed for exacerbating Mexico's woes but its defenders point out that rising exports are evidence that the zone is working.
Analysts also noted that a $7bn intervention last week by Washington and Ottawa to stop the peso from collapsing suggested that the Nafta allies were pulling together.
Nafta received a baptism of fire in Mexico's crisis-torn year of 1994, but analysts say it may already be quietly bearing fruit.
The day the treaty was launched, 1 January 1994, a peasant rebellion exploded in the southern state of Chiapas and rebels declared the deal with the US and Canada "a death sentence for the indigenous people of Mexico."
It was an inauspicious start to an accord that had been touted as a "win-win-win" situation for all three countries. Mexico's political and economic situation became steadily worse as the year wore on.
When the peso was devalued last week in a bid to curb a cripplingly high import bill, opponents inevitably blamed the trade treaty, which slashed tariffs and non-tariff barriers and made US and Canadian goods much cheaper in Mexico.
Separately, America's newest trading block kicked off on Sunday, bringing one step closer the dream of a continental free trading zone stretching from Alaska to Tierra del Fuego. The Mercosur customs agreement brings together Argentina, Brazil, Uruguay and Paraguay in a market of 190 million people with a combined gross national product of $800bn.
- 1 iOS 8 apps and features: eight iPhone settings you need to look at after you install the update
- 2 Kim Kardashian 'nude photos' leaked on 4chan weeks after Jennifer Lawrence scandal
- 3 'F*ck it, I quit': TV reporter Charlo Greene quits live on air in spectacular fashion
- 4 Scotland could still declare independence – even without referendum, says Alex Salmond
- 5 Hitler’s former food taster reveals the horrors of the Wolf’s Lair
Rihanna 'nude photos' claims emerge on 4Chan as hacking scandal continues
Kim Kardashian 'nude photos' leaked on 4chan weeks after Jennifer Lawrence scandal
Khorasan: Muhsin al-Fadhli - the man leading a terror group more feared by US officials than Isis
'F*ck it, I quit': TV reporter Charlo Greene quits live on air in spectacular fashion
Alicia Keys leaks nude photo 'to create a kinder and more peaceful world'
Scotland could still declare independence – even without referendum, says Alex Salmond
Scottish referendum results: Cross-party consensus collapses amid Tory-Labour spat on the 'English question'
Hilary Mantel 'should be investigated by police' over Margaret Thatcher assassination story, says Lord Bell
Scottish independence: David Cameron is becoming the 'George Bush of Britain'
Plebgate MP Andrew Mitchell called officer a 'little s**t', claim court documents 'exposing ex-Chief Whip's 'record of abusing police'
Archbishop of Canterbury admits doubts about existence of God
iJobs Money & Business
£20000 - £25000 per annum + OTE £40,000: SThree: SThree are a global FTSE 250 ...
£20000 - £25000 per annum + OTE £40000: SThree: As a Recruitment Consultant, y...
£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...
Up to £80000: Saxton Leigh: My client, a large commodities broker, is looking ...