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Mexico and China have shown how to strengthen win-win trade ties and promote South-South cooperation despite US' disruptive moves

By EDUARDO TZILI-APANGO | China Daily Global | Updated: 2024-02-06 08:23
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Mexico and China have shown how to strengthen win-win trade ties and promote South-South cooperation despite US' disruptive moves

On Jan 3, Mexico City inaugurated the operations of a light train railway, manufactured by a Chinese company, to strengthen mobilization in the southern part of the city. At the same time, the agriculture ministers of China and Mexico had an in-depth exchange on various topics including climate-smart agriculture. The Mexican government also launched an artificial intelligence talent development program in collaboration with Chinese tech companies to train Mexican people in cutting-edge digital technologies such as machine learning, deep learning and Open AI.

These are just the most recent examples of how China and Mexico are setting a positive example for South-South cooperation in the context of competition led by the United States. Mexico and China are among the most important trade and economic partners of the US. In 2018, the US government initiated a trade war against China, imposing several trade tariffs on Chinese imports, and it renegotiated the North America Free Trade Agreement (NAFTA).As a result, many Chinese digital and technological products were sanctioned in the US, and the NAFTA became the US-Mexico-Canada Agreement (USMCA) which contains a controversial clause that supposedly limits Mexico's opportunities for expanding trade ties with China.

Nevertheless, China and Mexico have managed to face these restrictions in a peaceful and responsible manner, and with the objective of promoting common development, which is one of the main goals of South-South cooperation. Since the establishment of the comprehensive strategic partnership between Mexico and China in 2013, Mexican exports to China have almost doubled, from $6.17 billion in 2013 to $10.7 billion in 2022. In the three months, from January to March 2023, Chinese foreign direct investment in Mexico reached a record $407 million, mostly in equity capital.

Trade between the two countries is highly complementary and diverse, while investments have focused on infrastructure and productivity. Notwithstanding the USMCA's so-called anti-China clause, Mexico and China have also started a new boom on near-shoring with win-win implications.

China and Mexico ought to maintain the pace in their cooperation based on cautious strategic balancing, which means consolidating South-South cooperation by taking into consideration the geopolitical realities in Mexico's vicinity. This implies to advance in securing independent, strong and fair bilateral relations, not bound by major-country ideological and geopolitical competition.

In fact, Mexico, along with the rest of the Latin America and the Caribbean region, has implemented a cautious strategic balance amid an emerging multipolarity in the global order. Besides South-South cooperation cases in China-Mexico relations, three LAC examples also come to mind.

First, the establishment of the China-Latin America and the Caribbean Technology Transfer Center in Dongguan, Guangdong province, in 2023 is aimed at boosting the LAC technological capabilities in new energy, information technology, as well as in disaster prevention and emergency response.

Second, the opening of the China-Cuba e-commerce "Dofimall" store at the end of 2023 has strengthened the "China-Latin America Industrial Park" project, and deepened bilateral supply chains.

Third, the establishment of the Phoenix Park Industrial Estate in Trinidad and Tobago, which is the Caribbean's first comprehensive intelligent industrial park, has boosted South-South cooperation under the framework of the Belt and Road Initiative.

In clear contrast, the US has failed to cooperate more with LAC countries and it has not helped the region to enhance its infrastructure and productive capabilities. It seems the US wants Mexico and the other LAC countries to commit to an ideological agenda that does not bolster important development necessities in the LAC region, as it is seen in Washington's political treatment of Cuba.

The emerging multipolarity in the world order appears to be a period of confrontation and convergence between the Global North with its ideological agenda and the Global South with its pursuit of development. Hopefully, this competition will turn into cooperation. China and Mexico have set a positive example of how to achieve cooperation for development. For other LAC countries, it is fundamental to maintain this South-South trend to maintain multilateralism.

the author is an associate professor and researcher at the Politics and Culture Department of the Metropolitan Autonomous University, and a member of the Mexican Eurasia Studies Group. The author contributed this article to China Watch, a think tank powered by China Daily.

The views do not necessarily reflect those of China Daily.

Contact the editor at editor@chinawatch.cn

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