Australia and Mexico - so far yet so close

Jess Chalker's picture

As trading partners, Australia and Mexico are beginning to go steady. But with speculations that Mexico is on the brink of failed state status, could this become a bad romance? It certainly doesn’t seem that way…

Just last year, Australia and Mexico’s two-way merchandise trade was worth $2 billion. Our people-to-people links are growing stronger, there are more opportunities for bilateral trade on the horizon than ever before and education links are flourishing; with more and more Australian and Mexican students taking advantage of our countries’ reciprocal education programs.

Multilaterally our union is strong too, as we continue to work harmoniously on issues such as climate change, whaling, and in forums, including the United Nations, G20, WTO and APEC.

Clearly, the Australia-Mexico relationship shows much promise. Still, many pundits would have you believe that our partner is unsteady on its feet.

In its influential Foreign Policy magazine, US think-tank Fund for Peace (FfP) recently referenced Mexico  in the warning category of its failed state index. Even the US Joint Forces report (JOE 2008)  named Mexico alongside Pakistan as a state ‘on the brink of rapid and sudden collapse’.

The reason? Mexico’s ongoing drug wars.

The bloodthirsty battle, which has claimed 28,000 lives since 2006, is mostly due to in fighting between the cartels and the Mexican government. But sadly, innocent civilians, police, politicians and journalists have all been caught in the crossfire. Corruption is rife, and impunity is ubiquitous.

While Mexico is seeing turbulent times, does Australia have cause to be concerned about our economic partnership? Not really.

There’s no question that a failed state would be a less than desirable trading partner for Australia, but putting Mexico into a ‘failed state’ category seems a bit of a stretch, especially if you are comparing it to a country like Pakistan.

Let’s consider: Unlike Pakistan’s, the Mexican government has not lost control of its territory. In fact, since its installment in 2006, President Calderon’s government has been the most proactive yet in its determination to crush the cartels, which pose its greatest threat. Having deployed 45,000 troops and 5,000 federal police to fight them, the increased violence we are now seeing is a result of the Mexican government finally flexing its muscle against the enemy. And lets face it; the cartels were never going to go quietly.

It is a coup not without flaws of course; the human cost has been dear. But, according to a recent survey by independent think-tank Pew Research, 80% of Mexicans support the government’s use of the army to fight the drug traffickers, especially in the absence of a stronger alternative.

Although the legalisation of drugs debate has been re-opened in Mexico as an alternative to the current strategy, it is unlikely such a bill could ever be passed unless the US (whose citizens demand for illicit drugs fuels the war) relaxes its own drug laws.

Economic decline is another symptom FfP lists (again, evident in Pakistan). But on the contrary: Mexico’s economy is on the up.

Former Mexican Minister of Finance, Agustin Carstens (now Central Bank Governor), recently forecast a 4-5% GDP growth for Mexico in 2010 , evidence the country is bouncing back after the global economic crisis. Only two years prior in 2008, Carstens claimed that the violence and deteriorating security in Mexico was jeopardizing foreign investment , reducing the nation’s GDP by 1% annually.

The IMF now ranks the Mexican economy 11th in the world according to its GDP, with Australia not far behind at 17th.
Dismissing failed state conjecture; things look positive for the Australia-Mexico economic partnership; even more so when you consider our complementary trading profiles and economy size.

Simon Crean, former Minister for Trade, was also confident. In the speech he delivered to the Mexican Council of Foreign Relations (COMEXI) and Industrials Club in Mexico City in April this year, Crean waxed lyrical of future trade relations between our two countries. He encouraged a creative partnership that is co-operative and understanding; one he was “committed to strengthening”.

Indeed, with the Australia-Mexico trading partnership delineating the potential to only grow stronger (not weaker), a strong will is required of both nations ongoing. This will help to instill a mutual confidence in both partners of the fecund political and cultural benefits our continued alignment can provide.


Jess Chalker is currently undertaking a Masters at the School of Letters, Arts and Media at the University of Sydney. She also holds a Bachelor of Arts degree from the University of Sydney, where one of her majors included Spanish and Latin American studies.