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By ANTONIO GARZA, former U.S. ambassador to Mexico

With the holidays just around the corner, 2022 will soon come to a close.

As in prior years, I have looked back at some of my end-of-year columns, in which words like complexity and uncertainty were the norm. I’ve found that perhaps the best characterization of what 2023 has in store to be Adam Tooze’s “Welcome to the World of the Polycrisis.”

One year ago, it felt as though we were inching beyond the pandemic. Yet, we continue to live with its lingering repercussions.

Inflation has remained high, and on Wednesday, Dec. 14, the U.S. Federal Reserve raised interest rates by 0.5 percent and signaled it will continue to increase rates in 2023 to “tame inflation.” Continuing Russian aggression in Ukraine, uncertainty about China moving away from its Zero Covid policy and recent signs that China is aligning itself more closely with Russia feed a sense of polycrisis.

Global growth will likely decline to less than 2 percent in 2023, the weakest growth in over a decade. This is in large part due to economic contractions in the United States and Europe, as well as slowing growth in emerging economies.

Across Latin America, countries are facing political turmoil and low economic growth prospects. In Peru, President Pedro Castillo was ousted after trying to dissolve Congress in order to stave off an impeachment. Chile suffered from violent protests when its new constitution failed to pass. And Argentina is teeming with hyperinflation and political scandal, although the country will no doubt unite on Sunday, Dec. 18, to cheer on its national team in the World Cup final.

By comparison, the economic outlook for Mexico is stable, particularly in the mid- to long-term. In November, Fitch gave Mexico a BBB- rating, and inflation was the lowest it’s been since May. Remittances from Mexican expats, primarily in the United States, continue to reach new historic highs, providing support for the economy.

On Wednesday, Dec. 14, Mexico’s Congress approved a “Plan B” reform of Mexican President Andrés Manuel López Obrador’s (AMLO) proposal to weaken oversight of the country’s electoral system. This issue has caught the eye of U.S. editorial boards and provoked the ire of Mexicans across the country.

In the U.S.-Mexico relationship, we’ve seen mounting tension this year over multiple disputes filed under the United States-Mexico-Canada Agreement (USMCA)A trade dispute-resolution panel recently made a preliminary ruling in favor of Mexico and Canada, which had filed a complaint about car components against the United States. Yet, the thornier issues — such as energy and genetically modified corn — remain unresolved.

On Monday, Dec. 12, Mexico submitted proposals aimed at settling a USMCA dispute filed in July by the United States and Canada, claiming that López Obrador’s energy policies give preference to state-owned firms. It’s been particularly difficult to make progress on this issue given López Obrador’s strong ideological positions that remain at odds with the USMCA and investor expectations.

Mexican Foreign Relations Secretary Marcelo Ebrard will be in Washington D.C. on Thursday, Dec. 16, to discuss “points of agreement on genetically modified corn” in  hopes of avoiding an official U.S. complaint. This comes after Mexico appeared to be moving forward with a ban on imports of genetically modified corn, which would lead to an estimated loss of $74 billion for U.S. companies over 10 years. Mexican Economy Secretary Raquel Buenrostro has suggested that Mexico may delay the ban until 2025.

Immigration continues to confound officials on both sides of the border. It is possible that the Title 42 expulsion policy will end on Dec. 21 due to a court order, though the Joe Biden administration has appealed the ruling. The administration is reportedly in “intense” negotiations with Mexico over potential measures if in fact Title 42 is lifted. Additionally, this past week saw a mass kidnapping of migrants in northern Mexico and record numbers of migrants crossing near El Paso, Texas. And lastly, prospects are dimming for the passage of legislation affecting the future of DACA (Deferred Action for Childhood Arrivals) recipients.

This year has once again shown that our greatest challenges — including the economy, security and migration — do not stop at our borders. As I have long believed, the United States and Mexico are both made stronger by working together. This partnership was on display on Monday, Dec. 12, when the United States and Mexico came together to celebrate 200 years of diplomatic relations.

On Jan. 9 and Jan. 10, López Obrador will host President Biden and Prime Minister Justin Trudeau in Mexico City for the North American Leaders Summit. This will offer another chance to tackle the region’s biggest obstacles and leverage opportunities to create a more prosperous and competitive North America, even in the midst of a global polycrisis.

ANTONIO GARZA is a U.S. lawyer who served as his country’s ambassador to Mexico between 2002 and 2009. In recognition of his work, in 2009, the Mexican government bestowed on him the Águila Azteca, the highest award granted to foreigners. Prior to his appointment as ambassador, Garza served as Texas’ secretary of State from January 1995 to November 1997 and was also chairman of the Texas Railroad Commission. He is currently a lawyer at White & Case, specializing in cross-border issues. He is also currently a director at both Kansas City Southern and MoneyGram.

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