Thread by @ACLatAm

9AM TODAY: Join @ACLatAm & @ACGlobalEcon for a conversation with Mexico's Secretary of Finance @ArturoHerrera_G and US Representative @RepCuellar on the interconnected #US-#Mexico economic relationship and the future of the USMCA #ACMexico. Tune in here: atlanticcouncil.org/event/destinat…

@ACGlobalEcon @ArturoHerrera_G @RepCuellar We applaud Mexico's commitment to free trade and economic cooperation in North America, remarks Katia Bouazza of @HSBC #ACMexico.

@ACGlobalEcon @ArturoHerrera_G @RepCuellar @HSBC The Mexican economy is very similar to some of its natural peers, such as Argentina and Brazil, but there are a few things that sets it apart, explains @ArturoHerrera_G #ACMexico.

@ACGlobalEcon @ArturoHerrera_G @RepCuellar @HSBC Chief among them is Mexico's rate of public investment - one of the lowest in Latin America, says Mexico's Secretary of Finance @ArturoHerrera_G #ACMexico.

@ACGlobalEcon @ArturoHerrera_G @RepCuellar @HSBC For instance, the public investment ratio for last year was only 2.9%. This gives rise to a host of challenges that we must resolve, explains H.E. @ArturoHerrera_G #ACMexico.

@ACGlobalEcon @ArturoHerrera_G @RepCuellar @HSBC Among the more obvious challenges are the need to change the composition of expenditures, and the need for the government to expand its role in the sector, says @ArturoHerrera_G #ACMexico.

@ACGlobalEcon @ArturoHerrera_G @RepCuellar @HSBC Mexico faces 3-4 of pressing economic challenges, says H.E. @ArturoHerrera_G. Most obvious is Mexico's growth underperformance relative to its regional peers. Since 1982 Mexico's annual GDP growth has hovered around 2%, while per capita GDP growth averaged around 0.8% #ACMexico.

@ACGlobalEcon @ArturoHerrera_G @RepCuellar @HSBC Another important issue is the variation in Mexico's economic growth across different regions, states and municipalities. GDP per capita is almost 7x higher than in Chiapas, for instance, explains @ArturoHerrera_G #ACMexico.

@ACGlobalEcon @ArturoHerrera_G @RepCuellar @HSBC The disparities are especially salient in the range of human development index scores between states - with some earning scores equivalent to Switzerland or the UK, while others are more similar to Eritrea or Burundi, comments @ArturoHerrera_G #ACMexico.

@ACGlobalEcon @ArturoHerrera_G @RepCuellar @HSBC Growth must be faster and more equitable. In the short run we must produce an environment that gives domestic and foreign investors the certainty they need to participate in the Mexican market, says @ArturoHerrera_G #ACMexico.

@ACGlobalEcon @ArturoHerrera_G @RepCuellar @HSBC Among other challenges that need to be addressed quickly is the expansion of fiscal revenue streams and the collection of taxes - Mexico only collects 13% of GDP in taxes, far below the Latin American mean, explains @ArturoHerrera_G #ACMexico.

@ACGlobalEcon @ArturoHerrera_G @RepCuellar @HSBC A state with limited resources will continue to spend less, and lower public investment will fail to kindle greater activity in the private sector, explains Secretary @ArturoHerrera_G #ACMexico.

@ACGlobalEcon @ArturoHerrera_G @RepCuellar @HSBC Another major issue is the lack of women in the Mexican labor force. For women between 15-64 years old, only 47% of them are in the labor force, one of the lowest ratios in the region, says @ArturoHerrera_G #ACMexico.

@ACGlobalEcon @ArturoHerrera_G @RepCuellar @HSBC Deepening global trade tensions were at the top of the agenda for attendees at recent G-20 meetings, explains H.E. @ArturoHerrera_G. More specifically, the manner in which these global trade tensions are taking shape is multi-polar, multi-actor and far more difficult to navigate

@ACGlobalEcon @ArturoHerrera_G @RepCuellar @HSBC The relationship between the US and Mexico is multi-faceted. The ties that bind our two countries together are geographic, familial, cultural as well as economic, explains @RepCuellar #ACMexico.

@ACGlobalEcon @ArturoHerrera_G @RepCuellar @HSBC "When someone sees Russia as a friend and Mexico as an enemy, we know that the world has been turned upside down. Mexico is a very important ally." Having strong and trusted neighbors to our North and South is within our own best interests, explains @RepCuellar #ACMexico.

@ACGlobalEcon @ArturoHerrera_G @RepCuellar @HSBC How will the USMCA encourage investors to enter or remain in the Mexican market, asks @EliseLabott? The USMCA is critical in dispelling the uncertainty that's encumbered US-Mexico economic activity since NAFTA 2.0 negotiations began, says @RepCuellar #ACMexico.

@ACGlobalEcon @ArturoHerrera_G @RepCuellar @HSBC @EliseLabott How is Mexico preparing to seize on the opportunities presented by the digital economy? It's already the fastest growing sector in Mexico, says H.E. @ArturoHerrera_G, and with the right support it has the potential to lead to greater financial inclusion #ACMexico.

@ACGlobalEcon @ArturoHerrera_G @RepCuellar @HSBC @EliseLabott But the nascent digital economy is not without its challenges, explains @ArturoHerrera_G. Mexico's tax code is ill-prepared to account for the intangible products and services made possible by the Internet #ACMexico.

@ACGlobalEcon @ArturoHerrera_G @RepCuellar @HSBC @EliseLabott H.E. @ArturoHerrera_G isn't wrong. Revising the tax code is a tall order, says @RepCuellar, and consulting with eager domestic and international investors in the digital space will make navigating the road ahead much easier #ACMexico.

@ACGlobalEcon @ArturoHerrera_G @RepCuellar @HSBC @EliseLabott US Chamber of Commerce has calculated that 40% of US exports are destined for Latin America, though unfortunately, "I don't think we pay 40% of our time to Latin America, which is very important to us," laments US Congressman @RepCuellar #ACMexico.

@ACGlobalEcon @ArturoHerrera_G @RepCuellar @HSBC @EliseLabott "If we (the US) don't pay attention and do more...a vacuum will be filled... The last thing we want is our neighbors to the South to have all these Chinese investments." We have to work with Mexico and our other partners in Latin America, warns @RepCuellar #ACMexico.

@ACGlobalEcon @ArturoHerrera_G @RepCuellar @HSBC @EliseLabott Attracting greater investment is key to addressing the disparate socioeconomic outcomes across Mexican states, reiterates Mexico's Secretary of Finance @ArturoHerrera_G #ACMexico.

@ACGlobalEcon @ArturoHerrera_G @RepCuellar @HSBC @EliseLabott "Our vision is to have three strong, prosperous, secure countries, and that's the way we ought to look at this... And I have to say the Mexicanos on this (USMCA) negotiation between the US and Mexico have just done a tremendous job." remarks @RepCuellar
#ACMexico.

@ACGlobalEcon @ArturoHerrera_G @RepCuellar @HSBC @EliseLabott For Mexico, as well as scores of other nations, the danger of the current global economic environment is the extent to which everyone is aware of an impending recession, but are showing very little appetite for cooperation to address it, says H.E. @ArturoHerrera_G #ACMexico.

@ACGlobalEcon @ArturoHerrera_G @RepCuellar @HSBC @EliseLabott As a result, the administration in Mexico has made efforts to establish the necessary countercyclical fiscal policies, explains Mexico Secretary of Finance H.E. @ArturoHerrera_G #ACMexico.