Mexico sends out cry for help

Mexico is calling on "friendly" countries and banks to provide between $10bn and $15bn (£6.5bn-£10bn) to support its markets through its latest financial crisis.

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.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Trainee Consultant - Surrey / South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

SThree: HR Benefits Manager

£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...

Recruitment Genius: Office Manager / Financial Services

£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...

Jemma Gent: Year End Accountant

£250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...

Day In a Page

The difference between America and Israel? There isn’t one

The difference between America and Israel? There isn’t one

Netanyahu knows he can get away with anything in America, says Robert Fisk
Families clubbing together to build their own affordable accommodation

Do It Yourself approach to securing a new house

Community land trusts marking a new trend for taking the initiative away from developers
Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

Money, corruption and drugs

The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

150 years after it was outlawed...

... America's first slavery museum is established in Louisiana
Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all
Tony Oursler on exploring our uneasy relationship with technology with his new show

You won't believe your eyes

Tony Oursler's new show explores our uneasy relationship with technology. He's one of a growing number of artists with that preoccupation
Ian Herbert: Peter Moores must go. He should never have been brought back to fail again

Moores must go. He should never have been brought back to fail again

The England coach leaves players to find solutions - which makes you wonder where he adds value, says Ian Herbert
War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn
Yvette Cooper: We can't lose the election. There's too much on the line

Yvette Cooper: We can't lose the election. There's too much on the line

The shadow Home Secretary on fighting radical Islam, protecting children, and why anyone in Labour who's thinking beyond May must 'sort themselves out'
A bad week for the Greens: Leader Natalie Bennett's 'car crash' radio interview is followed by Brighton council's failure to set a budget due to infighting

It's not easy being Green

After a bad week in which its leader had a public meltdown and its only city council couldn't agree on a budget vote, what next for the alternative party? It's over to Caroline Lucas to find out
Gorillas nearly missed: BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter

Gorillas nearly missed

BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter
Downton Abbey effect sees impoverished Italian nobles inspired to open their doors to paying guests for up to €650 a night

The Downton Abbey effect

Impoverished Italian nobles are opening their doors to paying guests, inspired by the TV drama
China's wild panda numbers have increased by 17% since 2003, new census reveals

China's wild panda numbers on the up

New census reveals 17% since 2003