In this century Mexico has had the slowest per capita GDP growth of any country in Latin America. It has made almost no progress in reducing poverty and it is plagued by drug gangs and corruption. But Thomas Friedman sees a Mexico that doesn’t show up in the data:
“In India, people ask you about China, and, in China, people ask you about India: Which country will become the more dominant economic power in the 21st century? I now have the answer: Mexico.”
How does he come to this conclusion? Well one of the big factors in Friedman’s story is that wages for workers in Mexico are falling behind wages elsewhere:
“with massive cheap natural gas finds, and rising wage and transportation costs in China, and it is no surprise that Mexico now is taking manufacturing market share back from Asia.”
While Mexico might not do well by standard economic measures, Friedman points out that it does very well when it comes to signing trade agreements;
“Mexico has signed 44 free trade agreements — more than any country in the world — which, according to The Financial Times, is more than twice as many as China and four times more than Brazil.”
In this same vein, Friedman excitedly quotes the Financial Times:
“Today, Mexico exports more manufactured products than the rest of Latin America put together.”
Let’s assume this is true. Much of what Mexico exports are products like cars where it imports most of the parts. These are then assembled in Mexico and exported back to the United States. This assembly doesn’t add much to Mexico’s economy, but if for some reason you think that exports by themselves are a measure of economic success, you can score big through this route.
After telling readers that people in Mexico use Twitter, Friedman then comments that U.S. companies are investing more in Mexico, “which is one reason Mexico grew last year at 3.9 percent.” Friedman apparently doesn’t realize that 3.9 percent was not an especially rapid growth rate for Latin America last year.
Just to ensure a regional balance, Friedman managed to overstate the cost of the war in Afghanistan by a factor three telling readers that:
“We do $1.5 billion a day in trade with Mexico, and we spend $1 billion a day in Afghanistan. Not smart.”
Yes, the war in Afghanistan may not be smart, but CBO puts the price tag at less than $100 billion in 2013.
Anyhow, it is easy to see why the NYT runs Thomas Friedman’s columns. He gives you all sorts of information that you would never find anywhere else.
Dean Baker is co-director of the Center for Economy and Policy Research. He also writes a regular blog, Beat the Press, where this post originally appeared.
Photo by Charles Haynes under Creative Commons license