Different Consequences in Different Regions

Commerce between Mexico and South America dropped from $25.9 billion to $17.6 billion in 2009, a 32 percent decline. I'm not sure what corresponding decline in US-Mexico trade last year, but in the first quarter of 2009, it was 25 percent. Since the first- and second-quarter economic numbers were for the most part far worse than the third- and fourth-quarter figures, I imagine the annual decline was less than 25 percent, but I have no idea how much less. In any event, it seems safe to assume that trade with South America suffered more from the crisis than trade with the US.

You hear people argue from time to time that Mexico needs to shift its gaze southward. That sentiment often (though not always) seems motivated more than anything by a rejection of the status quo, and fails to address the fact that, for all its problems, the US offers a far larger and closer market than South America. At the same time, the last year and a half have brought into stark relief the dangers for Mexico relying too heavily on the US as the destination for 80 percent of its exports (followed by Canada with 2.4 percent and Germany with 1.7 percent). If one of the effects of the crisis in the US is a long-term reduction of debt-based consumption, and the US has five to ten years of slow growth ahead of it, both of which seem likely, now would seem to be the perfect time for Mexico to start pushing trade to other regions, both in the Western Hemisphere and beyond.