Strategic Alliances and Other Deals

In Latin America in general, economic liberalization of the 1980s and 1990s has led to an increasing concentration of economic power in the hands of big economic interests. Strategic Alliances and Other Deals argues that in Mexico, the advent of a North American Free Trade Agreement with Canada and the U.S. has accelerated the shift of economic power towards dominant private sector interests. Indeed, Mexico opened up its economy at a greater pace and to a further extent than any country in the region (with the exception of Chile under the dictatorship of General Augusto Pinochet, 1973-1989).

In this book, Kleinberg shows how the formal mechanism established to bring private-sector demands to the NAFTA negotiating table forged a transparent, closer, more strategic alliance between the state and big business that goes beyond the coalitions and pacts created during the heavily protectionist substitution stage. Business was not only guaranteed a significant role in the free trade negotiations, but also greater influence in economic policy making as well. This has led to a newer, more consistent negotiating style between sectors of business and the state. Pacts made between the state, business, and labor during the economic crisis of 1995 demonstrated the dominance of business over economic policy decisions. The Mexican State has historically depended upon the cooperation of the labor and peasant sectors along with business. The shift in business-state relations poses grave challenges for future stability and democratization in Mexico. It is likely that the growth of political power of the business sector will not cause long-term socioeconomic instability.