NY Times, February 18, 2000 After Helping Oil-Producing Nations to Push Prices Up, Mexico Is Having Second Thoughts By SAM DILLON VERACRUZ, Mexico, Feb. 18 -- For two years, Mexico has worked with other oil producing nations to lift prices, and their efforts have borne fruit. But in an about face, senior Mexican officials are now trying to talk prices down. The problem is that lofty oil prices conflict with Mexico's new economy, propelled by exports of cars, televisions and other manufactured goods. "Mexico is now so integrated into the U.S. economy that it's no longer in Mexico's interest to rock the boat on oil prices," said Eduardo López, a Mexican who is an analyst at the Petroleum Finance Corporation, a consulting firm in Washington. (clip) Mexico's role in influencing world oil prices is surprising, given its trade partnership with the United States, its repeated previous refusal to take part in OPEC and President Zedillo's outspoken advocacy of free markets. "Mexico's economic policies had been been well known," said Rogelio Ramírez de la O, an economic consultant based in Mexico City. "Mexico stood for free trade and had spoken out against price volatility. "Now the government has helped restrict the market to raise oil prices, and suddenly officials are getting messages from Washington: 'Hey! You're hurting us. You're fueling inflation. You're playing with fire!' And they're trying to back out of this with the least embarrassment possible." But the discomfort already appears intense. "It seems absurd, idiotic and contrary to our national interest that there could be more revenues and the government says they don't want them," Cuauhtémoc Cárdenas, the presidential candidate heading a leftist coalition, told 10,000 supporters at a rally in Monterrey on Thursday. "If there was nothing to spend the money on," he said, "I could think that increasing the oil exports could be logical. But I've never seen anybody whose product is selling at a high price say, 'I want you to pay me less.' " Mr. Cárdenas is the son of the former president. "The man in the street thinks Cárdenas is right, that we need that money to build schools and pave streets," said Jorge Montano, a former ambassador to Washington. "They don't understand," Mr. Montano said, "that weeks from now, if these high prices continue, the interest rates will rise, our stock market will fall and we'll all sink." Political cartoons have lampooned Mr. Téllez as a puppet manipulated by the United States. "Richardson Comes to Pressure Us Over High Crude Prices!" said a headline in the leftist daily La Jornada. But if Mr. Richardson intends to urge higher production to ease prices, he will be preaching to the converted. "We're going to tell Mr. Richardson that we'll take measures that are good for Mexico, not only for the oil sector, but also for the growth of the rest of our economy," Mr. Téllez said. Mr. Téllez is hoping that Mr. Richardson will help him convince 100 million Mexicans of the wisdom of forgoing short-term profits for the greater economic good. "It's important that the Mexican public understand that there is a real possibility that world economic growth will slow," Mr. Téllez said. "I hope Mr. Richardson will say this loud and clear." Full article at: http://www.nytimes.com/library/world/americas/021900mexico-oil.html Louis Proyect Marxism mailing list: http://www.marxmail.org/
