RACHEL MARTIN, HOST:
Over the weekend, President Obama met with Chinese President Xi Jinping. The two leaders pledged to build a new model of relations. Before coming to the U.S., President Xi spent three days in Mexico. In years past, China and Mexico have kept each other at arm's length as both competed to manufacture cheap goods to send to the U.S. But that seems to be changing.
We called up Enrique Dussel Peters. He's a professor of economics at the National Autonomous University of Mexico. And I started by asking him the source of tension between his country and China.
ENRIQUE DUSSEL PETERS: In the last 10, 15 years, China has become a major investor in Latin America. Today, China is the second source of foreign direct investments for the full region but not in Mexico. No? So what we find today is there has been a lot of disengagement, a lot of misunderstandings, in particularly regarding trades. The business sector in Mexico and business organizations have been very critical of massive illegal imports coming from China. And, according to the business sectors and many analysts, in 2012 we reached the worst relationship among both countries in the last 40 years.
MARTIN: I'd like to ask you to put on your global economics hat and talk a little bit about what this means, this closer relationship between America's greatest economic rival, China, and our southern neighbor?
PETERS: (Chuckling) To put it very concretely, we've been working, for example, on the automobile sector. No? So China today is producing almost 20 million cars; the U.S., around nine million; and Mexico, around three million. No? So we have a mass producer of cars, which is China, who will start exporting cars in the very short term massively. No? Foreign producers, but increasingly Chinese brands, are preparing themselves very well for challenging Ford, Chrysler and many others.
MARTIN: Do you think that means that Mexico is going to start pressuring the United States and Canada to start thinking more strategically about the trade relationship with China?
PETERS: I hope. In the worst-case scenario, if the respective governments do not take decisions in this direction, we will have suddenly new Chinese firms in the auto parts sector, in the automobile sector that produce in the region. And that will challenge rules of origin, trade, employment, investment, wages in the region. No?
So if we do not address to stop it very clearly, we will have a very harsh competition that will have an effect in terms of jobs, employment, wages in the three countries.
MARTIN: Enrique Dussel Peters is a professor of economics at the National Autonomous University of Mexico. He joined us from his home in Mexico City.
Thank you so much for talking with us, Professor Peters.
PETERS: Thanks a lot.
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MARTIN: Latin America is the world's most violent region, suffering from an epidemic of shootings and kidnappings. Tomorrow, NPR's Steve Inskeep reports on the heavy price one Venezuelan family has paid. That story and the day's top news on NPR's MORNING EDITION.
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