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Mexico wants to dodge Trump with a transoceanic corridor
Publication date: 2/15/2017
The president of Mexico, Enrique Peña Nieto, has green-lighted the Trans-isthmus project and Mexico has already begun studies for the realization of the planned infrastructure. A rail and road corridor between the Gulf of Mexico and the Pacific, in the narrowest part of the Mexican Isthmus of Tehuantepec, is an old national aspiration. Its recent momentum, within an initiative of the SEZs, predates the presidency of Donald Trump in the United States, but his arrival at the White House makes it especially appropriate.
The Trans-isthmus railway would help Mexico better cope with the possible revision of trade between the two neighboring nations demanded by the new US president, facilitating the search for new markets beyond the United States, where Mexico currently sends 80 percent of its exports. However, the country's economic difficulties cast doubt on the implementation of the project, whose initial phase requires a public investment of 250 million dollars.
Last year, the government of Peña Nieto approved the plan for the creation of the first three special economic zones, designed to develop the south of the country, which is its most depressed part. In addition to the areas attached to the port facilities of Lazaro Cardenas and Puerto Chiapas, both in the Pacific, the government also announced the special area of the corridor of Tehuantepec, between the port of Salina Cruz, in the Pacific, and Coatzacoalcos, in the Gulf of Mexico.
Competing with Panama
This is what technicians call a dry canal, a corridor with rail infrastructure for freight trains and a road that will be a highway in some sections. The layout presents few engineering difficulties; the terrain is virtually flat. It lies between two mountain ranges and would be almost 300 kilometers long, i.e. one hundred kilomters more than the isthmus's total length in a straight line (the Panama Canal is 65 kilometers long).
Chinese products destined for the southern US would take one week less to arrive there, when compared to the length of the trip when going through the Panamá Canal. With ports at each end, Mexico's Trans-isthmus solution should serve for the departure of goods in the region, but especially for the connection of those maritime routes that involve saving time compared with the Panama canal. The latter occurs with all the routes departing from the US east coast to the Pacific, especially those that leave from the Gulf of Mexico. Thus, oil cargo shipments leaving Houston, Texas, which take 16 days to reach the Pacific when going through Panama, would only take 7 days to reach the waters of the Pacific. So says the national oil company, PEMEX, in a video. The company has already installed a pipeline network to connect the two coasts by land.
The Spanish empire's transoceanic route
The Spanish empire had already used Mexico as its exchange route to connect the Peninsula with Asia. The Manila Galleon was the first trade route that linked Asia with Europe via America: the galleon departed from Spain and arrived in Veracruz. There, the goods were carried by land, through Mexico City to Acapulco, where they were loaded again so they could be sent to the Philippines: a dry, 770 kilometers long route, which the Spaniards preferred over the Isthmus of Tehuantepec because it was outside the Viceroyalty's domain.
The US wanted to buy the isthmus of Tehuantepec for a possible canal, but ended up making it in Panama. Tehuantepec has always been among the options for a transoceanic canal. It was the most convenient place for the United States to make a canal, due to its proximity to their coast. Americans wanted to buy it in the mid-nineteenth century, but Mexico's negativity and the opportunities arising in neighboring countries, led Washington to lean towards Nicaragua and then to Panama, where they eventually opened the trench. Mexicans built a railway line in Tehuantepec in the early twentieth century, but it stopped being a profitable business in 1914, after the opening of the Panama Canal.
Several countries in the region are now trying to compete in transoceanic traffic. In addition to the initiative of a canal in Nicaragua, a Chinese project that clearly is not feasible, there are more serious projects to connect both oceans by land in Guatemala (which is currently in the process of acquiring the land) and in Mexico.
"We're skeptical about this project as, due to the crisis currently afflicting the country, some of these projects will have to be postponed or cancelled," stated El Imparcial, a journal of the isthmus area, in an editorial in late January. They also added that President Peña Nieto only had two more years in office, so it is wouldn't be easy for him to embark on an initiative that requires a long time. In addition, it is not the first time that the plan has been announced, and later backtracked.
However, the development of the integrated industrial parks in the SEZ, will depend on private investment; the improvement of road and rail infrastructure, which is paid for with public funds, would help attract private investment.
Publication date: 2/15/2017
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