News / Americas

Mexico Would Take Hit If US Debt Talks Fail

Craftswomen work on Christmas decorations in a workshop in the village of Chignahuapan in the state of Puebla, Mexico, November 26. 2007. Some of the spheres they produce are exported to the United States.
Craftswomen work on Christmas decorations in a workshop in the village of Chignahuapan in the state of Puebla, Mexico, November 26. 2007. Some of the spheres they produce are exported to the United States.
If negotiations aimed at preventing the United States from sliding over the so-called 'fiscal cliff' fail, the impact could be devastating to Mexico, America's third-largest trading partner.

The U.S. and its southern neighbor had $500 billion worth of trade in goods and services last year, mostly in electrical machinery, vehicles and crude oil. Mexico exported $15.8 billion worth of agricultural products to the United States in 201, making it the second-largest supplier of such goods.

If U.S. President Barack Obama and Republicans in Congress fail to compromise on a deficit-cutting package of revenue increases and spending cuts, it could spark a recession, which could mean layoffs for some Mexican workers.

"While Mexico is doing relatively well economically, the country would take a hit if debt talks fail," said Eduardo Garcia, with the Mexican financial website Sentido Común.

"Mexico's economy would suffer quite a bit if the U.S. fails to reach an agreement and these automatic fiscal measures go into effect because [Mexico] is so integrated into the U.S. economy," he said. Thirty percent of the Mexican economy is export-based and the U.S. consumes 80 percent of those products, he added.

In Washington Thursday, the Speaker of the Republican-led U.S. House of Representatives, John Boehner, accused President Obama of risking the "fiscal cliff" by stubbornly resisting spending cuts.

Republicans still are not budging on Mr. Obama's demands for higher tax rates on income above $250,000 a year, despite the president's election victory and opinion polls showing support for the idea.

The U.S. president has argued Republicans must accept higher tax rates on the wealthiest as part of any deal in order to avoid rates rising on 98 percent of Americans.

Without an agreement, tax hikes and spending reductions will begin taking effect in early January, steps that economists warn could renew the recession.

The Mexican economy contracted more than 6 percent during the 2008-09 U.S. financial crisis. While Garcia does not foresee such a large problem this time, he said the impact of any U.S. austerity measures would likely be immediate.

"Economies now react very quickly to these fiscal policies that are implemented," Garcia said. "So there's no doubt that as soon as it happens Mexico will start feeling the pain and the Mexican government will probably have to implement a few extraordinary programs to contain the blow," he said.

Mark Snowiss

Mark Snowiss is a Washington D.C.-based multimedia reporter.  He has written and edited for various media outlets including Pacifica and NPR affiliates in Los Angeles. Follow him on Twitter @msnowiss and on Google Plus

You May Like

Philippines, Muslim Rebels Try to Salvage Peace Pact

Peace process faces major setback after botched military operation to find terrorists results in bloody gunbattle between government forces, Moro Islamic Liberation Front fighters More

Republicans Expect Long, Expensive Presidential Battle

Political strategist says eventual winner will be one who can put together strongest coalition of various conservative groups that make up Republican Party More

Video New Wheelchair Is Easier to Use, Increases Mobility

Engineers have come up with a lever-operated design that makes use of easily accessible bicycle technology More

This forum has been closed.
Comment Sorting
Comments
     
by: mobilebay from: Texas
December 21, 2012 8:31 AM
I doubt that Mexico will ever have to worry. This, and several past administrations, have seen to it that Mexico is taken care of no matter what the situation is with their own people. US taxpayers must pay for the upkeep of illegal aliens from that corrupt, third world country who laughs at our laws. They disregard our immigration laws and believe they are "entitled" to all rights as "undocumented Americans."

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Liberia's Almost Last Ebola Patient Grateful but Still Grievingi
X
Benno Muchler
March 26, 2015 3:41 PM
Beatrice Yardolo was to make history as Liberia’s last Ebola patient. Liberians recently started counting down 42 days, the period that has to go by without a single new infection until the World Health Organization can declare a country Ebola-free. That countdown stopped on March 20 when there was another new case of Ebola, making Yardolo’s story a reminder that Ebola is far from over. Benno Muchler reports from Monrovia.
Video

Video Liberia's Almost Last Ebola Patient Grateful but Still Grieving

Beatrice Yardolo was to make history as Liberia’s last Ebola patient. Liberians recently started counting down 42 days, the period that has to go by without a single new infection until the World Health Organization can declare a country Ebola-free. That countdown stopped on March 20 when there was another new case of Ebola, making Yardolo’s story a reminder that Ebola is far from over. Benno Muchler reports from Monrovia.
Video

Video Cambodian Land Grabs Threaten Traditional Communities

Indigenous communities in Cambodia's Ratanakiri province say the government’s economic land concession policy is taking away their land and traditional way of life, making many fear that their identity will soon be lost. Local authorities, though, have denied this is the case. VOA's Say Mony went to investigate and filed this report, narrated by Colin Lovett.
Video

Video US, South Korea Conduct Joint Military Exercises

The Eighth U.S. Army Division and the Eighth Republic of Korea Mechanized Infantry Division put on a well orchestrated show of force for the media this week during their joint military training exercises in South Korea. VOA’s Seoul correspondent Brian Padden was there and reports the soldiers were well disciplined both in conducting a complex live fire exercise and in staying on message with the press.
Video

Video Space Program Status Disappoints 'Last Man on the Moon'

One of the films that drew big crowds last week at the annual South by Southwest festival in Austin, Texas, tells the story of the last human being to stand on the moon, U.S. astronaut Eugene Cernan. It has been 42 years since Cernan returned from the moon and he laments that no one else has gone there since. VOA’s Greg Flakus reports.
Video

Video Young Filmmakers Shine Spotlight on Giving Back

A group of student filmmakers from across the United States joined President Barack Obama at the White House this month for the second annual White House Student Film Festival. Fifteen short films were officially selected from more than 1,500 entries by students aged 6 through 18. The filmmakers and their families then joined the president and a group of celebrities for a screening of their films. VOA’s Julie Taboh reports.
Video

Video VOA Exclusive: Interview with Afghan President Ashraf Ghani

Afghan President Ashraf Ghani, during his first visit as president to Washington, gave a one-on-one interview with VOA Afghan Service reporter Said Suleiman Ashna, about his request for a change in U.S. troop levels, the threat from the Islamic State, and repairing relations with the United States and Pakistan. The interview was held at Blair House, late Sunday, in Pashto.
Video

Video California Science Center Tells Story of Dead Sea Scrolls

The ancient manuscripts were uncovered in the mid-20th century, and they are still yielding clues about life and religious beliefs in ancient Israel. As VOA's Mike O'Sullivan reports, an exhibit in Los Angeles shows how modern science is bringing the history of these ancient documents to life.
Video

Video Angelina Jolie Takes Another Bold Step

Hollywood actress and filmmaker Angelina Jolie has revealed she had her ovaries and fallopian tubes removed to lower her odds of getting cancer. Doctors say the huge publicity over her decision will help raise awareness about the importance of cancer screening. VOA’s George Putic has more

All About America

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More

More Americas News

US, Cuba Teams Discuss Telecommunications Issues

US delegation visited Cuba this week as the two nations continued efforts to restore diplomatic relations broken over 50 years ago
More

Egyptian Court Adjourns Trial of Al Jazeera Journalists to April 22

Two journalists are charged with aiding a terrorist organization, a reference to the Muslim Brotherhood, which Egypt banned following 2013 army takeover
More

Rio Exhibition Dramatizes Olympian Bay Cleanup Task

Display highlights problem of trash in Guanabara Bay, where sailing, windsurfing events are to take place in next Summer Games
More

Chile Says Drought Permanent, Lays Out Water Plan

President Michelle Bachelet says government will invest in desalinization plants and reservoirs to ensure access to potable water
More

Poll: Venezuelan Leader's Popularity Inches Up to 25%

Rise comes after United States declared Venezuela a security threat and ordered sanctions against seven officials
More

High Winds, Drought Feed Chilean Forest Fires

Blazes have ravaged swaths of China Muerta and Nalca Lolco reserves and Conguillio national park, revered for its ancient forests
More