The Making of NAFTA: How the Deal Was Done

The Making of NAFTA: How the Deal Was Done

The Making of NAFTA: How the Deal Was Done

The Making of NAFTA: How the Deal Was Done

Synopsis

Northern reflections -- Understanding international negotiation -- Assessing the NAFTA bargain -- Getting to the table -- Opening rounds -- The Dallas jamboree -- Heavy slogging after Dallas -- End game at the watergate -- Another end game -- A Mexican tragedy -- Conclusions.

Excerpt

In the pre-dawn hours of February 4, 1990, a jetliner passed high over the Gulf of Mexico en route to Mexico City from Switzerland. On board, Carlos Salinas de Gortari and Jaime Serra Puche slept fitfully. The president of Mexico and his secretary of commerce, accompanied by other members of the cabinet and Mexican business leaders, were on the final leg of a nine-day mission to Europe. Their trans-Atlantic, red-eye flight was made necessary by an important ceremonial function that the president had to perform that day in the Mexican capital. The previous July, after arduous negotiations, the Mexicans had concluded an agreement with the advisory committee of their creditor banks on terms for rescheduling Mexico's enormous burden of debt. It had taken six months for the individual banks to decide to back the accord and to select one of the three options that had been identified for debt rescheduling. Now, finally, the Mexican debt agreement was ready for the president's signature. This formality represented another step in the reconstruction of Mexico's economy, battered by recession, inflation, and debt for most of the previous decade. Despite the ceremony, however, it was not a major step, because the agreement would only slightly reduce Mexico's debt service obligations. Further action would be necessary, and since Mexico could not count on its creditors for economic aid, it would have to seek capital from foreign investors.

The search for foreign investment had been the purpose of the mission to Europe, and it had been a resounding failure. Potential investors, preoccupied with the economic reconstruction of East European states emerging from decades of communist rule, showed little interest in investing in Mex-

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