Mexican backlash threat if US blocks trade deal: President Salinas has staked much to bring about a thriving North American free market, writes Phil Davison

THE STREET vendors in Mexico City's bustling central Tepito market do not dress with the flair of Arthur Daley nor drive Jags. But like him they deal in what they call fayuca, slang for goods that 'fell off the back of a lorry'. Specifically, a lorry that came down from the United States illegally without paying import tariffs or taxes.

You can buy just about anything in Tepito - only a few blocks from the historic Zocalo (main square) and Cathedral - from designer perfumes to Japanese stereo sets, at half or even less than the listed price. Bribes to police and local officials ensure the marketeers' survival. But for how long?

From the Tepito street vendors and the chicleros who sell chiclets at traffic lights, to bankers, big businessmen and President Carlos Salinas de Gortari more than anyone, all Mexican eyes are on Wednesday's US congressional vote on the North American Free Trade Association (Nafta), the proposed accord between the US, Mexico and Canada.

Though most Mexicans remain unsure of its details, most believe any economic deal with the northern neighbour can only narrow the giant gap between them and raise living standards south of the border. Only the Tepito street vendors and the rest of the 'parallel', ie black-market, economy are worried that lowered trade barriers will put them out of business.

With an astonishing annual turnover of more than pounds 20bn ( pounds 13.6bn) a year nationwide, the parallel economy covers millions of people. According to President Salinas, the increased investment and trade certain to follow the passing of Nafta would allow them to be absorbed into the legal economic infrastructure.

President Salinas, whose term ends next summer, has bet his political career on Nafta, first negotiated with President George Bush and later amended to include changes on environmental and labour issues pressed by President Bill Clinton. If Nafta passes in the US, Mr Salinas is likely to retire with not only the massive wealth that Mexican presidents magically accumulate during their six-year term but with the reputation of having torn down what, along the banks of the Rio Grande, was in many ways an economic equivalent of the Berlin Wall.

Tens of millions of Mexicans have crossed the Rio Grande in the last 50 years seeking decent wages, and millions have stayed. Even if Nafta is passed, the migrant flow is unlikely to drop dramatically until Mexican wages - around one-fifth the US average -close the gap.

If the US rejects Nafta, Mr Salinas could eventually go down as the man who let slip the six-decade monopoly on power of his Institutional Revolutionary Party (PRI). Awaiting the US decision, Mr Salinas has delayed the 'unveiling' of the PRI's presidential candidate for next August's elections. Traditionally, naming the candidate has, due to the PRI's virtual monopoly on power, meant he was effectively naming the next president.

In the last election in 1988, however, Mr Salinas scraped through with a fraction more than 50 per cent of the national vote and only after a mysterious computer failure delayed vote counting by the PRI- controlled Electoral Commission. The populist candidate, Cuauhtemoc Cardenas, claimed he had been the true winner and had been robbed through fraud. Mr Cardenas is running again next year and, if Nafta is by then history, the likely anti-American backlash could conceivably sweep him to power and put an end to 65 years of PRI rule.

Mr Cardenas has been ambiguous on Nafta, not rejecting it outright but suggesting an accord that is more oriented towards development, ie of Mexico. He has warned that, if the PRI continues with its traditional fraudulent tactics next year, 'there will be a civil insurgency that would lead to a national confrontation'. With a tiny percentage of Mexicans controlling the vast majority of its wealth, and poverty rife in the countryside, that warning is more than mere rhetoric.

Although few Mexicans were able to follow the Ross Perot-Al Gore debate 'live' last week on cable television, news reports of Mr Perot's anti-Mexican remarks had even Mexican opponents of Nafta fuming. Had there been any doubt of the passage of the treaty in Mexico, in fact, the Texan businessman's remarks might have tipped the balance against his Nafta point of view.

'If the treaty is not approved, it would not be impossible that Mexico turns its eyes towards Japan or the European Community,' Octavio Paz, Mexico's Nobel laureate, wrote at the weekend in the Spanish daily ABC. 'What's more, a wave of anti-Americanism would break out that would not be long in spreading to the rest of Latin America. The consequences of a rejection of Nafta would be not only economic but political and historic'.

Mr Salinas is said to have a contingency plan ready should Nafta fall through, continuing the freeing of his economy, seeking further foreign investment and trying to increase productivity.

He is likely to have to raise interest rates to attract foreign capital. Up to pounds 5bn was said to have 'fled' the country in two days last week, and stocks plunged as speculators became edgy over Nafta's future. An interest rate rise of more than three percentage points, coupled with Mr Gore's perceived debate defeat of Mr Perot, brought much of the money back and the stock market regained its upward trend.

Life and Style
“What is it like being a girl?” was the question on the lips of one inquisitive Reddit user this week
News
peopleDave Legeno, the actor who played werewolf Fenrir Greyback in the Harry Potter films, has died
Arts and Entertainment
Armando Iannucci, the creator of 'The Thick of It' says he has
tvArmando Iannucci to concentrate on US show Veep
Life and Style
beauty
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Sport
Luis Suarez looks towards the crowd during the 2-1 victory over England
transfers
Life and Style
Swimsuit, £245, by Agent Provocateur
fashion

Diving in at the deep end is no excuse for shirking the style stakes

Sport
German supporters (left) and Argentina fans
world cup 2014Final gives England fans a choice between to old enemies
Arts and Entertainment
A still from the worldwide Dawn of the Planet of the Apes trailer debut
film
News
peopleMario Balotelli poses with 'shotgun' in controversial Instagram pic
News
A mugshot of Ian Watkins released by South Wales Police following his guilty pleas
peopleBandmates open up about abuse
Sport
Basketball superstar LeBron James gets into his stride for the Cleveland Cavaliers
sportNBA superstar announces decision to return to Cleveland Cavaliers
Sport
Javier Mascherano of Argentina tackles Arjen Robben of the Netherlands as he attempts a shot
world cup 2014
Arts and Entertainment
The successful ITV drama Broadchurch starring David Tenant and Olivia Coleman came to an end tonight
tv
Sport
Four ski officials in Slovenia have been suspended following allegations of results rigging
sportFour Slovenian officials suspended after allegations they helped violinist get slalom place
News
14 March 2011: George Clooney testifies before the Senate Foreign Relations Committee during a hearing titled 'Sudan and South Sudan: Independence and Insecurity.' Clooney is co-founder of the Satellite Sentinel Project which uses private satellites to collect evidence of crimes against civilian populations in Sudan
people
Arts and Entertainment
Balaban is indirectly responsible for the existence of Downton Abbey, having first discovered Julian Fellowes' talents as a screenwriter
tvCast members told to lose weight after snacking on set
Life and Style
More than half of young adults have engaged in 'unwanted but consensual sexting with a committed partner,' according to research
tech
Life and Style
A binge is classed as four or more alcoholic drinks for women and five or more for men, consumed over a roughly two-hour period
tech
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
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 General

JavaScript Developer (Angular, Web Forms, HTML5, Ext JS,CSS3)

£40000 - £45000 per annum + Benefits + Bonus: Harrington Starr: JavaScript Dev...

BC2

£50000 - £70000 per annum: Harrington Starr: Business Analyst Consultant (Fina...

SAP Data Migration Consultant

competitive: Progressive Recruitment: My client, a FTSE 100 organisation are u...

Programme Support, Coms, Bristol, £300-350p/d

£300 - £350 per day + competitive: Orgtel: My client, a leading bank, is curre...

Day In a Page

A History of the First World War in 100 Moments: Peace without magnanimity - the summit in a railway siding that ended the fighting

A History of the First World War in 100 Moments

Peace without magnanimity - the summit in a railway siding that ended the fighting
Scottish independence: How the Commonwealth Games could swing the vote

Scottish independence: How the Commonwealth Games could swing the vote

In the final part of our series, Chris Green arrives in Glasgow - a host city struggling to keep the politics out of its celebration of sport
Out in the cold: A writer spends a night on the streets and hears the stories of the homeless

A writer spends a night on the streets

Rough sleepers - the homeless, the destitute and the drunk - exist in every city. Will Nicoll meets those whose luck has run out
Striking new stations, high-speed links and (whisper it) better services - the UK's railways are entering a new golden age

UK's railways are entering a new golden age

New stations are opening across the country and our railways appear to be entering an era not seen in Britain since the early 1950s
Conchita Wurst becomes a 'bride' on the Paris catwalk - and proves there is life after Eurovision

Conchita becomes a 'bride' on Paris catwalk

Alexander Fury salutes the Eurovision Song Contest winner's latest triumph
Pétanque World Championship in Marseilles hit by

Pétanque 'world cup' hit by death threats

This year's most acrimonious sporting event took place in France, not Brazil. How did pétanque get so passionate?
Whelks are healthy, versatile and sustainable - so why did we stop eating them in the UK?

Why did we stop eating whelks?

Whelks were the Victorian equivalent of the donor kebab and our stocks are abundant. So why do we now export them all to the Far East?
10 best women's sunglasses

In the shade: 10 best women's sunglasses

From luxury bespoke eyewear to fun festival sunnies, we round up the shades to be seen in this summer
Germany vs Argentina World Cup 2014: Lionel Messi? Javier Mascherano is key for Argentina...

World Cup final: Messi? Mascherano is key for Argentina...

No 10 is always centre of attention but Barça team-mate is just as crucial to finalists’ hopes
Siobhan-Marie O’Connor: Swimmer knows she needs Glasgow joy on road to Rio

Siobhan-Marie O’Connor: Swimmer needs Glasgow joy on road to Rio

18-year-old says this month’s Commonwealth Games are a key staging post in her career before time slips away
The true Gaza back-story that the Israelis aren’t telling this week

The true Gaza back-story that the Israelis aren’t telling this week

A future Palestine state will have no borders and be an enclave within Israel, surrounded on all sides by Israeli-held territory, says Robert Fisk
A History of the First World War in 100 Moments: The German people demand an end to the fighting

A History of the First World War in 100 Moments

The German people demand an end to the fighting
New play by Oscar Wilde's grandson reveals what the Irish wit said at his trials

New play reveals what Oscar Wilde said at trials

For a century, what Wilde actually said at his trials was a mystery. But the recent discovery of shorthand notes changed that. Now his grandson Merlin Holland has turned them into a play
Can scientists save the world's sea life from

Can scientists save our sea life?

By the end of the century, the only living things left in our oceans could be plankton and jellyfish. Alex Renton meets the scientists who are trying to turn the tide
Richard III, Trafalgar Studios, review: Martin Freeman gives highly intelligent performance

Richard III review

Martin Freeman’s psychotic monarch is big on mockery but wanting in malice