Two things can be said of newly-seated Mexican President Andrés Manuel López Obrador: He’s a true populist and he’s very ambitious.
And, it seems, he wants to help POTUS Donald Trump reduce the number of people sneaking into the United States, albeit for different reasons.
As the San Diego Union-Tribune reports, AMLO, as he is called, has announced the creation of a “free zone” stretching along the entire U.S.-Mexico border and will be 25 kilometers (15.5 miles) in depth that he hopes will create new jobs and business opportunities for Mexicans, giving them less of a reason to want to go to the United States.
For communities within the border strip the Mexican government will:
- reduce income taxes from 30 percent to 20 percent
- slash the Value Added Tax for goods coming into the country from 16 percent to 8 percent
- boost the minimum wage 100 percent to 176 pesos ($8.80) per day, and
- make fuel prices the same as those in the U.S.
“It’s going to be the biggest free zone in the world,” López Obrador said. “It is a very important project for winning investment, creating jobs and taking advantage of the economic strength of the United States.”
“Migration should be a choice, not forced,” López Obrador said, noting that the project aims to improve the lives of those living within the strip while attracting others who want to do better without moving out of the country.
The idea isn’t really new, per se. For many decades the strip was known as Zona Libre, a duty-free zone for hundreds of goods and items. But after the imposition of NAFTA in 1994, the government of Mexico decreed that all residents of the country should be subjected to the same import duties.
Advocates and supporters like the idea because they say the border region is different from the rest of Mexico.
“We are a binational region, with different systems, different economies,” Pedro Romero Torres-Torija, a Baja California business leader who has advocated for a zone, told the Union-Tribune earlier this year.
There are drawbacks, however. Officials with the Mexican Tax Ministry have said they worry that if too many businesses move their operations to the border strip, the country will lose billions in annual tax revenue.
Also, by raising the minimum wage in the zone, employers elsewhere in Mexico will have a harder time attracting workers.
And, some analysts said the effects on illegal immigration to the U.S. won’t be felt immediately because it will take many years to build up businesses and economic opportunities in the strip.
Still, the strip is part of AMLO’s equally ambitious plan of creating 400,000 new jobs for Mexicans, again as a means of enticing them from wanting to migrate to the U.S., which would be of major benefit to the U.S. as well.
“He really is an economic nationalist,” Duncan Wood, director of the Mexico Institute at the Washington D.C.-based Wilson Center, told the paper. “He’s following through on his campaign promises.”
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