Doug, I'm glad you widened the potential scope of the "Mexican" recession to Latin America. With nearly 90% of Mexico's exports going to the US and layoffs announced earlier this year by DaimlerChyrsler, Black & Decker and others in Mexico, a Mexican recession is really no surprise. But Mexico has also pursued numerous trade agreements with many Latin American countries, connecting them via the foreign sector with ample room for the transmission of foreign disturbances.
I'm not hopeful, however, about how quickly Mexico will be able to reduce its dependence on the US with the EU-Mexico Free Trade Agreement. Since establishment of the agreement in July 2000, 82% of Mexico's industrial exports can presently enter the EU duty free with an eventual increase to 96% by 2007 -- sounds great, eh? -- nevertheless the percentage of overall Mexican exports to the EU is essentially zero!
Diane