Mexico shares a 1,954-mile border with the United States, where 3 out of every 4 Hispanics (36.6 million) are of Mexican descent. In 2019, both countries exchanged US $677.3 billion worth of goods and services (US 1.3 million every minute). This year, Mexico has sold 12 times more goods to the U.S. than to the rest of Latin America combined. In 2021, 1.7 million migrants from a multitude of countries were detained at the U.S.-Mexico border while trying to enter the U.S. without papers; of this cohort, 40 percent were Mexican. It is estimated that 200,000 firearms illegally enter Mexico each year from the U.S., while 90 percent of the heroin, 88 percent of cocaine, 87 percent of methamphetamine, and 80 percent of fentanyl smuggled into the U.S. comes from Mexico. Our bond is inevitable.
Without getting into the debate about how far Mexico is from God, and how close to the United States (some say that Israel considers that conundrum in reverse), only two countries share a border with the most powerful nation in the world, which is happens to be the world’s largest economy. But, beyond that, the U.S. is the epicenter of the most disruptive technological revolution ever. No, China will not be the most dominant country this century. To make projections solely based on China’s recent performance, while extraordinary, would be a mistake. We must consider China’s astronomical debt (three times of its GDP), its colossal housing crisis (30 billion square feet of vacant space), and the demographic crisis which is just starting to become a nightmare (China could lose half of its population in the next 45 years). Beyond all this, we are talking about a country that is increasingly closed off from the rest of the world and that will not be able to compete with global talent that is predominantly concentrated in the U.S., and to a lesser extent in Europe.
We cannot squander opportunities when crises present themselves. Tragedies like the recent one in San Antonio, where 53 migrants suffocated to death inside a tractor-trailer, should be catalysts for change. At the very least, a sweeping migration agreement, one that would allow a large number of Mexican workers to legally enter the U.S., should be on the table, as America cannot contain inflationary pressure due to labor shortages. We should also accelerate the economic integration between both countries, taking advantage of the urgency of U.S. companies to move their supply chains out of China. Nearshoring will create more jobs in Mexico and lessen the need for many Mexicans to migrate north. We must understand that if we do not increase our relevancy, the days of the USMCA trade deal are numbered. During the USMCA negotiaton in 2018, the U.S. government added a sunset clause which will go into effect in 2026, if the three parties don’t agree to an extension of USMCA. If a Republican wins the presidential election in 2024, this will happen.
This moment in time offers many unique opportunities. Value chains are being regionalized. Yet, Mexico is driving away U.S. companies which have ended-up relocating their operations from China to Taiwan and Vietnam. Others are moving back to the U.S. by increasing automatization and robotization. Processes like digital printing, which makes small production runs cost effective, will reduce the importance of mass-producing goods, which was why many companies used to come to Mexico for. Soon they won’t need us.
The carrot to entice the U.S. is to lower the pressure of undocumented migrants, at a time when the Biden administration needs it most. However, instead of promoting common objectives and sound strategies, the U.S.-Mexico relationship is falling into disrepair. President Andrés Manuel López Obrador’s efforts to get leaders in Latin America to boycott the Summit of the Americas in Los Angeles was insulting. It’s equally disappointing to note that the U.S. Ambassador to Mexico Ken Salazar, someone who could help drive a stronger bilateral relationship given his closeness to President Joe Biden, forgot that his job description does not include being López Obrador’s enthusiast, or to entertain the Mexican presidents’s delusions.
The U.S. Ambassador tried to pull USAID’s support for MCCI (Mexicans Against Corruption and Impunity) one of the most respected civil society organizations in Mexico. Salazar accused the group of being partisan and also unfair with President López Obrador. Among other things, MCCI uncovered conflicts of interest between one of the President’s sons and Baker Hughes, a Texan oil field services company which has been awarded large contracts by Pemex -the state-owned oil firm- without tender. This was happening at the same time that the President’s son occupied, for free, a mansion in Houston owned by a former Baker Hughes executive. Accusing MCCI of partisanship is unfair, since it disclosed the two largest corruption cases against president Peña Nieto, AMLO’s predecessor, proving that they have not taken sides in their fight against corruption.
Today, more than ever, Mexico needs entities in civil society that defend democracy, transparency and rule of law. The López Obrador administration has harassed several of these organizations along with their funders through tax audits, and by disclosing their names during the President’s daily press conferences in order to encourage his supporters to attack them. Ambassador Salazar should understand that discouraging corruption and improving business practices in Mexico is not only in the interest of Mexicans but also of the U.S. government and of American companies: Mexican civil society’s efforts make the North American region more competitive.
Mexico’s only engine of economic growth during the López Obrador administration has come from our economic ties with the U.S.: we urgently need to enhance integration. The United States needs to send Ken Salazar back to Colorado, in order to replace him with someone who understands why supporting the gibes of a demented populist also threatens the stability of his own country.
* Jorge Suárez-Vélez is an economic and political analyst. He is the author of The Coming Downturn of the World Economy (Random House 2011). A Spanish version of this Op-Ed appeared first in Reforma’s newspaper print edition. Twitter: @jorgesuarezv
