I’d like to start this presentation with three snapshots that illustrate the current state of the U.S.-Mexico relationship under the Obama administration. As recent as this Monday, Mexico announced a plan to implement tariffs on 90 U.S. agricultural and industrial products as retaliation of the U.S. decision to block the entrance of Mexican trucks into American territory, something that contravened NAFTA. On Tuesday, Obama said that the Mexican drug-cartels “have gotten completely out of hand” after announcing a program to strengthen the surveillance in the U.S. South-western border (AP 2009). Hillary Clinton arrived in Mexico on Wednesday amid discussion within the American press and policy-circles on whether Mexico had become a failed state. (Clinton’s visit will be followed by stops next weeks by General Attorney Eric Holder and the Secretary of Homeland Security Janet Napolitano and by a two-day visit of President Obama himself in mid-April.)
Do these snapshots show any major shift in the US’s Mexican policy under the Obama administration? In this presentation, I will briefly outline the state of the three biggest issues that dominate the U.S.-Mexico agenda: trade, immigration and drug-trafficking. Then I will argue that the fundamental dynamics of the U.S. –Mexico relationship have not been significantly altered and that the policies toward Mexico pushed by Obama’s government do not substantially differ from those of previous administrations mainly due to structural reasons. Finally, I will comment what I would expect to see in the forthcoming months.
Let us start with the trade issue. In the heat of campaign, while courting the blue-collar vote in the deprived states of the Mid-West, Obama promised to renegotiate unpopular NAFTA and even threatened to withdraw the US from the trade agreement with Mexico and Canada. A number of economists and other observers think that re-negotiating NAFTA would be like opening a Pandora box. NAFTA is the largest trading bloc by PPP (purchasing parity power) standards. Canada and Mexico are U.S.’s first and third largest trade partners.
To be fair, the government has not still asked Congress the Trade Promotion Authority that would need to re-negotiate NAFTA without fearing amendments or filibusters in Congress. Yet many, particularly within the Republican Party, are arguing that the ghost of protectionism is roaming North America. The first draft of the stimulus pack bill of $787 billion included a provision called Buy American required the purchase of US-made iron, steel and manufactured goods for all building or public works projects funded by the spending bill. After complaints by Mexico and Canada, the Senate watered down the tone of the bill by including an amendment that stated that the requirement should be compatible with the country’s international trade commitments. Finally, the month Obama signed a bill that allegedly challenges NAFTA by cancelling funding for a pilot program that would allow Mexican trucks to travel on U.S. highways. Mexico retaliated by imposing tariffs that range between 10%-45% on some 90 U.S. products worth $2.4 billion in sales to Mexico each year. “The Mexican-American War of 2009”, was the title of an editorial in The Washington Times criticizing Obama’s trade policy. Editorials criticizing the administration’s protectionist policies were also published by The Washington Post, and The New York Times, amongst others.
Let us now move to issue of immigration. According to estimations by the Census Bureau by 2007 there were 11.4 million Mexican-born people living in the US, of which 7.9 million were not citizens at the time (U.S. Census Bureau 2007). It is therefore not surprising that illegal immigration, a U.S. domestic issue is Mexico’s main foreign priority. As recent as last week, the White House released a statement reassuring Obama’s commitment with a “comprehensive immigration reform” after a meeting with the Hispanic Congressional caucus (The White House Office of the Press Secretary 2009). The White House said that Obama will discuss immigration issues with President Calderon during his visit to Mexico next month. Both the statement and the announcement were well received by the immigration lobby in the US and within Mexico.
Finally, let’s move to the issue of drug-trafficking. Due to time constraints, I will not discuss here the reasons why the so-called war on drugs reached the levels of violence that we are currently witnessing in Mexico (last year more the drug-related violence left six thousand deaths) or who’s to blame for the worsening situation in Mexico. I’d rather limit to point out that during the short-lived Obama’s administration some sort of alarm about the drug problem in Mexico has permeated to the highest levels of the U.S. administration. On Tuesday the US Government announced a plan to increase surveillance in the border with the ultimate goal of, and here I quote Obama himself, “to make sure that the border communities in the US are protected and you’re not seeing a spill over of violence, and that we are helping” along with helping Mexico to deal with the problem
After briefly reviewing it, the question that would natural follow is whether the current state of affairs in the U.S.-Mexico significantly different from the past. There is certainly no precedent of anti-NAFTA rhetoric during the Bush Sr., Clinton or Bush Jar. Administrations. However, there is a long precedent of trade disputes and controversies between both countries after the signature of NAFTA. Currently, it is about trucks; previously, it was about avocado, tuna and even brooms. President Obama favours an immigration reform, so as George W. Bush and Ronald Reagan did. There has probably never been a level of drug-related violence in Mexico as now. However, ever since the murder in Mexico of DEA agent Enrique Kaki Cam arena back in 1985, drug-trafficking a continuous source of quarrel and mutual recrimination. Just recall the certification process of the 1990s. What results somewhat different is that the under Calderon the Mexican government has become more open to accept American aid to tackle the problem, whereas for the first time the U.S. government has fully accepted the Mexican argument that the U.S. should contribute in the war on drugs by controlling the flow of illegal arms and cash from its territory down to Mexico.
What can be expected in the near future? I would expect the drug problem to dominate the U.S.-Mexico agenda for a while. With or without basis, the current debate in US media outlets and think tanks is framed on whether Mexico is failing as a state and whether there is a risk of the violence spilling over to the U.S. The Mexican government, in my view, would have little room to push any other issue of its interest in the near future. The best thing the Mexican government can do at this point is to try to exploit the problem and request specific commitments or policies, for instance one of arms control. Are the trade disputes going to continue? I’d expect so, but I’d also expect some sort of accommodation. At the end of the day, Mexico is the third largest U.S. trading partner. Mexico’s imports of American goods are larger than the combined value of British, French and German imports of US products. Is Obama going to open and re-negotiate NAFTA? I wouldn’t bet on it. Doing so would require a lot of presidential leadership. Obama would need to obtain first, to get the TPA. A major change to NAFTA and would certainly be a very divisive issue with the Republican Party. The initiative, while supported by unions, would be resisted by powerful interest groups. The payoffs for embarking in such an enterprise are not clear for at this time. Finally, as for the immigration issue, I’d not see Obama spending political capital in the short term to actively promote an immigration reform that failed twice during Bush’s administration. It is not the most likely scenario to happen in the middle of an economic crisis. However I’d expect a reform and some sort of amnesty in the medium or long term, as some kind of consensus between the Democratic Party and at least a moderate wing of the G.O.P. that something should be done has been reached that something needs to be done and some sort of resignation among the public that it is just not realistic to deport more than 10 million illegal aliens that are believed in the US.
In short, the current state of the U.S.-Mexican states of affairs looks like one in which new faces are dealing with old and recurrent issues in this intense, asymmetrical and complicated bilateral relationship.