Freithaler undertakes to answer the question whether Mexico’s favorable economic record between 1940 and 1965 sustains or refutes the thesis that in the course of development the rate of growth of imports tends to be more rapid than the rate of growth of national output, creating a “trade-gap problem.” The Economic Commission for Latin America and more lately Gerald M. Meier have supported this thesis, but Freithaler seems to come out on the side of a limited refutation. His refutation is qualified, I think, for special reasons in the case of Mexico that would make her experience largely irrelevant for many if not most other less-developed countries.
Since 1940 Mexico has not faced a trade-gap problem, principally because of two chance external circumstances, her proximity to expanding U. S. markets for her primary products and the location of her major export industries in the states adjacent to this expanding market. Of equal significance, perhaps, has been a stable government in Mexico, constantly willing to assist the development of exchange-earning export activities—principally tourist services and border trade, along with cotton, sugar, cattle, and seafood, among others. At the same time, government policy vis-à-vis import substitution (possible because of a unique combination of circumstances) has apparently minimized Mexico’s “irreducible-import needs.”
This volume, I believe, amply illustrates Víctor Urquidi’s proposition that the economic fortunes of the less-developed countries depend largely on policies and unplanned events in the more highly developed industrial nations. A good example is the Mexican foreign-exchange earnings made possible by “free markets,” “free enterprise,” and “free trade” in sugar, cotton, coffee, seafood, metals, and sulfur. Of special interest is the case cited in which the U. S. Tariff Commission opposed a tax which the U. S. Senate proposed to levy on shrimp imports because, “many of the best shrimping grounds in the Bay of California and the Gulf of Mexico fall within the Mexican nine-mile limit and could, therefore, not be exploited by the U. S. fleet” (p. 90).
Freithaler’s work also points up the problem of wide disparities in mean per capita income distribution, especially the north-south division, aggravated by the fact that Mexico’s major foreign exchangeearning activities are located in the northern states. Perhaps the moral is that the bulk of Mexico’s land mass should run east and west, contiguous to the United States.
In summary, Freithaler may have intended to question the “trade-gap” thesis by his ease study of Mexico, but he has really shown the Mexican experience to be unique for development because of her proximity to the U. S., thereby leaving the thesis quite intact with regard to less developed countries in general. Although the number of charts and tables may seem excessive, the text is well-written, concisely summarizing export-development capacity in Mexico since 1940. The selected bibliography is useful.