Carlos Salinas, a son of a former cabinet minister, was elected president on July 3, 1988 but with the broadly held suspicion of electoral fraud. His chief opponent, Cuauhtémoc Cárdenas, had been ahead in the voting returns earlier in the day when the government announced a computer system crash. When the computers came back up, Salinas had won. The Interior Ministry which oversaw the elections, was led by Manuel Bartlett (the current director-general of CFE).
Inspired by the success of the European Economic Union, a Canadian-U.S. free-trade agreement was negotiated under President Ronald Reagan and concluded in 1988. President Salinas and President George H. W. Bush on June 10, 1990, endorsed a bilateral trade agreement. Canada joined in 1991.
To promote its cause before a skeptical American public, Mexico’s finance ministry reclassified Mexico’s national trade accounts for exports to include what, previously, had been “border transactions” (of maquiladora assembly plants). By the reclassification, Mexico’s trade with the United States surged after 1991, making Mexico its “2nd largest” trade partner (after Canada). By our analysis, both rankings reflected intra-company trade (Ford-Canada exporting to Ford-U.S.), not true exports
A preliminary agreement was reached in August 1992, and signed by the three leaders on December 17. It was ratified by the three legislatures in late 1993 and came into force on January 1, 1994.
Throughout the negotiations, President Salinas insisted that “oil was off the table.”
At some point between August 1992 and December 1993, Mexico introduced a ten-year, declining tariff on natural gas, starting at 10%. “The tariff,” in the words of Pemex Director General Adrián Lajous, “would give Pemex time to prepare to compete.”
Based on conversations we have had with members of the three delegations that negotiated the terms of NAFTA, a Mexican tariff on natural gas imports was never discussed.
But as MidCon Gas pipeline developers would soon discern, the intent of the tariff was to serve as a barrier against private competition in natural gas transportation pipelines. Pemex threatened the prospective anchor customers in Monterrey with retaliation if they were to support the Texas-Monterrey pipeline that Midcon was proposing. “If you import gas from MidCon, you’ll pay an extra 10%; but if you continue to buy it from Pemex, we’ll absorb the cost.”
Lacking an anchor customer, the project was about to be canceled when Pemex offered to contract for long-term capacity on the future pipeline (currently operated by Kinder Morgan, Inc. Since then, no other pipeline developer has sought anchor customers in the private sector.
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