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Mexico

Index

Economic Growth

Following World War II, the government emphasized economic growth. During the mid-1970s, under the leadership of President José López Portillo, Mexico became a major petroleum producer. By the end of Portillo's term, however, Mexico had accumulated a huge external debt because of the government's unrestrained borrowing on the strength of its petroleum revenues. The collapse of oil prices in 1986 cut Mexico's export earnings. In Jan. 1994, Mexico joined Canada and the United States in the North American Free Trade Agreement (NAFTA), with the plan to phase out all tariffs over a 15-year period, and in Jan. 1996, it became a founding member of the World Trade Organization (WTO).

In 1995, the U.S. agreed to prevent the collapse of Mexico's private banks. In return, the U.S. won virtual veto power over much of Mexico's economic policy. In 1997, in what observers called the freest elections in Mexico's history, the PRI lost control of the lower legislative house and the mayoralty of Mexico City in a stunning upset. To increase democracy, President Ernesto Zedillo said in 1999 that he would break precedent and not personally choose the next PRI presidential nominee. Several months later, Mexico held its first presidential primary, which was won by former interior secretary Francisco Labastida, Zedillo's closest ally among the candidates.