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AFTER
more than a decade of neoliberal, trade-friendly
government, a new era of protectionism is
gripping Mexico, whose people voted two
years ago for the return of the leftist
Institutional Revolutionary Party.
This
was the party that ruled Mexico from 1929
to 2000, and under whose stifling protectionist
nationalism cramped economic freedom to
such an extent that revulsion towards its
increasingly authoritarian ways brought
in the reforming neoliberalism of President
Vincente Fox, who headed the National Action
Party.
But
that ended when Fox's party was voted out
in 2012 as the mood of Mexico darkened after
the 2009 financial crisis and became introspective,
no longer able to surf waves of prosperity
buoyed by world trade and the increasing
benefits of the North American Free Trade
Agreement (NAFTA).
In
January, Mexico passed a raft of anti-free
trade laws that may yet run afoul of World
Trade Organisation (WTO). There has been
a widespread perception that the opening
up had gone too far. Demand growth from
its biggest trading partner, the United
States, had slackened and falling oil prices
soured the public mood, given that Mexico
is the world's 11th biggest petroleum producer.
The
new anti-trade laws are aimed at combatting
"unfair trade practices" affecting
the textiles and apparel. The measures,
including soft loans for equipment upgrades
and more customs hoops for importers to
jump through and another delay in scheduled
tariff reductions on footwear and apparel.
At
the same time, Mexico benefits from a migration
of manufacturing from China in recent years.
This has also been a process of "nearshoring",
as retailers preferred to have manufacturing
under greater control closer to their retail
shelves particularly in a time of slow steaming.
But
this hardly helped move Asian shipping volumes
and what surviving throughput there is,
comes through Manzanillo (pop 161,000),
its biggest port, serving Mexico City (pop
8.8 million) and Guadalajara (pop 1.4 million).
Then there is its chief rival, 344 kilometres
or 218 miles down the coast, called Lazaro
Cardenas.
Ten
years ago Lazaro Cardenas (pop 179,00) which
lifted 1.05 million TEU in 2013, became
the great hope of ocean carriers and global
port operators, like Maersk's APMT and Hong
Kong's Hutchison Port Holdings.
This
hope was based on the notion that the Asian
cargo flow would soon overwhelm the ports
of Los Angeles and Long Beach, not to mention
the truck routes and rail lines. All the
negatives of the existing system were paraded
as the horrors of tomorrow, and Lazaro Cardenas
was trumpeted as the great escape.
The
idea was to create an end-run around the
SoCal horrors. Instead going along the rail
lines of the clogged Southern Corridor,
heading south east all the way to El Paso,
Texas, before turning north east, the new
regime would skip California altogether.
Instead
cargo would land at Hutchison or APMT terminals
in Lazaro Cardenas, be loaded Kansas City
Southern trains and move directly to where
the cargo wanted to go - to the promised
consumer-rich lands east of the Mississippi.
But
it has been something of a bumpy ride for
Lazaro Cardenas since. In November 2013,
the Mexican military took the reins from
the port in an attempt to crack down on
surrounding drug war. The port also saw
a significant loss of its market share to
west coast ports in Canada and the US in
the first half of 2014. Only last
month did the authorities decriminalise
much of the steel export volume to China,
allowing legitimate consignments through
once more.
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