If you want to ingratiate yourself with the Teamsters, you dont allow Mexican 18-wheelers to come roaring into the Southwest. Its politics, pure and simple. Recovering economyMexico's future as a NAFTA partner and a customer for U.S. products hinges on its continuing economic recovery. "The tariffs lowered by NAFTA aren't the issue," says Hinojosa, who led the UCLA study. "What we must consider is how we help sustain real Mexican stability and growth." By many accounts, Mexico's economy is showing a strong turnaround. In January Mexico paid off its $13.5 billion U.S. loan plus $560 million in interest three years early. Mexico's inflation rate, which soared from 7 percent in 1994 to 52 percent in the 1995 recession, began to dip in January 1996 and ended that year at around 27 percent. This year analysts are forecasting inflation between 17 and 18 percent. Interest rates, too, are dropping from a peak of nearly 75 percent in April 1995 to 31 percent this year. The peso appears to be stablilizing and is expected to trade at about 8.5 to the dollar for most of this year. Mexico's Gross Domestic Product (GDP), which measures all economic activities, has been rebounding, with a growth rate of 5.1 percent last year. Direct foreign investment is a bright and critical spot. In part because of optimism inspired by NAFTA, some analysts say, direct foreign investment in Mexico jumped from $4.3 billion in 1993 to $10.9 billion in 1994, according to the Central Bank of Mexico. It settled back to $6.3 billion in the last two years and was expected to reach at least that level this year. This relatively quick return of foreign investment is one reason Mexico's economic recovery is moving faster than it did after the last recession in 1982-83, according to Nora Lustig, a senior fellow in Foreign Policy Studies at the Brookings Institution. "After the crisis in 1982-83 you did not have a recovery until the late '80s," Lustig said. "Mexico suffered fr...
