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by Michael Webster: Dec16, 2007 6:00 PM PST
Our relations with Mexico and Canada -- our North American neighbors and so called partners -- are integral to our well-being and security as a nation. These relationships are grounded, in increasing measure, in shared values and perspectives. We share a faith in democracy and the rule of law as twin pillars of sustainable governance. We also share a faith in competitive open markets as the proven route to sustainable economic growth and development for our peoples and nations. When the United States, Mexico and Canada created NAFTA in 1993, trade between the United States and Mexico totaled only $81 billion. Our two-way trade hit over $500 billion by 2008 – over a 5-fold increase. Mexico is now our second largest trading partner. Today, we export more to Mexico than to all of Europe. The NAFTA legacy extends beyond a trade agreement, however. NAFTA represents a commitment by Mexico to modernize politically and economically and a commitment by the United States and Canada to support this great change. Since his election, President Calderon says, “ we are ushering in a new, more open economic environment in Mexico. The prevailing spirit is one of free enterprise and equal opportunity, in which entrepreneurship is rewarded and graft is punished.” In the more then a year since President Calderon's inauguration, we have seen the Government of Mexico dedicate itself as never before to combating crime, with a serious campaign against drug trafficking and corrupt elements in government including judicial and law enforcement agencies according to the U.S. State Department.
Mexico has taken these steps because it sees these scourges for what they are -- threats to Mexico's own national interests. President Calderon recognizes that as Mexico moves into the globalized world, it must offer its neighbors and investors a reasonable guarantee of security, protection of their interests, and recourse in a judicial system which affords them the protection of the rule of law said a member of the Mexican Parliament Jose Martinez. Mexico's actions are consistent with the message of the Finance for Development Summit in Monterrey Mexico: the globalized economy is a powerful engine for development, but each country must take on the responsibility to harness it by practicing good governance, adhering to the rule of law, investing in its people and encouraging political and economic freedom, The U.S. Justice Department official said. The U.S. Government feels like all three governments should focus on one of the key ingredients in the recipe for building strong economies: the protection of the competitive process. Our goal should be to secure a robust culture of competition throughout North America. According to sources in the U.S. Dug Enforcement Administration the U.S. should impose strong deterrent measures against hard core drug cartels whose activities make a mockery of the Mexican economic effort.” “Detection and prosecution of hard-core cartels should be every competition authority's top enforcement priority. Cartels -- whether in the form of price fixing, output restrictions, bid rigging, or market division -- raise prices and restrict supply, enriching producers at consumers' expense and acting as a drag on the entire economy. In the U.S., we view cartels as crimes, pure and simple, and prosecute those who perpetrate them as criminals. Commerce has become more global, so too have Mexican cartels. That is why the United States has been one of the leaders both in prosecuting international cartels and in encouraging other countries to do likewise. As a recent OECD study notes, "the amount of commerce affected by just 16 large cartel cases reported in the OECD survey exceeded $55 billion world-wide. The survey showed that the cartel mark-up can vary significantly across cases, but in some it can be very large, as much as 50% or more. It seems clear that the magnitude of harm from cartels is in the billions of dollars annually." Although hard data is often difficult to obtain when dealing with secret conspiracies, it is clear that much of harm from cartels falls on developing countries, who are often significant purchasers of cartelized products or services and must pay grossly inflated prices. Since 1996, the Division has prosecuted more than 50 companies for participating in international cartels affecting more than $10 billion in U.S. commerce, and we have obtained fines of more than $1.9 billion, and sentenced at least 20 senior executives to jail. While we are gratified at our success in prosecuting these cartels, we know our work has just begun. As the enforcement actions we have each brought against the lysine and citric acid cartels demonstrate, cartels continue to be a way of life in many parts of the world, impeding economic performance, promoting inequality, impoverishing consumers, and thereby providing fuel for those who oppose globalization and free market ideals. The NAFTA partners recognize that effective cartel enforcement requires that all countries have effective anti-cartel laws and that they enforce those laws. We worked together to secure approval of the OECD 1998 Recommendation Concerning Effective Action Against Hard-Core Cartels, which encourages each member country to ensure that its competition laws effectively halt and deter hard-core cartels and to cooperate in investigating and prosecuting those cartels. We must, and will, continue to work together to prosecute cartels within our own borders. See remarks of Simon Evenett at OECD Global Forum on Competition, February 14, 2002 - 16 international cartels for which data was available affected $81 billion of LDC commerce; prices often fell by 20-40% after break-up of the cartels involved.
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LemonFast
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