From 1983 to 1989 Mexico pursued a strategy of integration into the global economy and reducing dependence on the US economy. That strategy was based on bilateral sectoral negotiations with the United States and multilateral negotiations through GATT to obtain recipiocity for Mexico’s own trade liberalisation, combined with efforts to attract Japanese and European FDI. Economic reforms included rather harsh macroeconomic adjustments (notably fiscal-deficit reduction), which lowered annual inflation from 200 to 20 per cent, and trade liberalisation, which has helped to make Mexico a leading exporter of manufactures. More gradual and pragmatic reforms were undertaken to promote FDI, deregulate industry and privatise state enterprises.

The globalisation strategy was perceived as too ambitious, however, and abandoned in mid-1989 for three principal reasons: the US-Canada FTA was seen as a threat, changes in Eastern Europe were thought to undermine possibilities for significantly ...