Author: mopress

Part Two: No Reason to Worry about the Leftists

Whoever wins the July 2006 presidential election will likely face a divided Congress, political parties that continue to be separated by profound programmatic and personal disputes, governors struggling to expand their still limited autonomy, and uni*ns and business leaders working to preserve their traditional privileges. The task of transforming this political raw material into a governing coalition will not be easy for any of the three leading presidential contenders—Andrés Manuel López Obrador of the Democratic Revolutionary Party (PRD), Felipe Calderón of the National Action Party (PAN), and Roberto Madrazo of the PRI. Each candidate has a different strategy for building a governing coalition and for exploiting the nonlegislative powers of the presidency. Each also has a very different set of policy preferences that he would pursue with governing capacity. But they all agree that Mexico must sustain democratic practices, invest in human and capital infrastructure, increase energy production, create jobs and enhance economic competitiveness, and preserve a good relationship with the United States. [Here the author reviews how the USA president got angry at the Mexico president when the latter failed to support the former’s UN campaign for war in Iraq, and how Mexicans as a whole have been insulted by the Congress of the USA for its recent exploitation of the immigration issue.]

The sobering effect of these experiences suggests that Mexico’s next president will move the country away from Fox’s tight embrace of the United States, rekindle efforts to build ties with the rest of Latin America, and renew its reliance on the principles that have traditionally guided Mexican foreign policy: self-determination, nonintervention, and the peaceful resolution of disputes.

This does not mean, however, that Mexico will become hostile to the United States, embrace the Latin American left, or end its participation in international institutions. Mexico realizes that its future is inevitably intertwined with its northern neighbor. Mexico obtains two-thirds of capital flows into the country and virtually all of its $20–25 billion in annual migrant remittances from the United States. It also sends nearly 90 percent of its exports to the United States, and more than 80 percent of tourists visiting Mexico are Americans. Mexico cannot afford a profound alienation from the United States. The Mexican population is also largely supportive of a warm relationship with the United States.

Indeed, behind the scenes the relationship has become increasingly institutionalized and stable regardless of who occupies the U.S. and Mexican presidencies. The NAFTA dispute resolution mechanism (as well as the World Trade Organization [WTO]) provides a formal framework for resolving trade disputes, and cooperation on security matters and efforts to combat drug trafficking are increasingly close and institutionalized. Regardless of who is inaugurated president on December 1, 2006, Mexico is unlikely to embrace Latin America’s radical left. There is little support for such a policy at home and a clear understanding that it would be of little practical advantage, especially given the damage it would cause to Mexico’s all-important relationship with the United States.

López Obrador is also very unlikely to embrace Hugo Chávez. To the contrary, he is the only Mexican presidential candidate in memory from the left who has not employed anti-American rhetoric.

Although López Obrador is not a great fan of free trade treaties, he is unlikely to pull Mexico out of its existing trade agreements with the European Uni*n, Japan, Chile, and other countries. But a López Obrador presidency is not likely to continue its predecessors’ support for a Free Trade Area for the Americas. Finally, López Obrador’s nationalism, his sensitivity to criticism, and his tendency to speak his mind freely will make him a prickly partner who is susceptible to perceived slights by the United States or its representatives, a historically common source of tension in the bilateral relationship.

All three candidates agree that although migration is a dominant foreign policy concern, it should no longer define Mexico’s dealings with the United States as it did under Fox. They also accept—in principle—Mexico’s responsibility to help manage the migrant flow by creating more and better jobs, helping to administer a temporary worker program, and recognizing U.S. security concerns related to migration. And they all accept the fact that controlling the border is a U.S. sovereign right. But the three candidates also insist that the United States has the responsibility to protect the human rights of Mexican nationals who cross into U.S. territory. They also uniformly favor amnesty for Mexicans living and working illegally in the United States. But they disagree over the weight each of these issues should have in Mexican migration policy. Calderón would sustain Mexico’s current migration policy but with an added emphasis on policing the northern border. Madrazo has proposed a new, more vigorous office for migrant affairs in the foreign ministry to symbolize his promise to aggressively protect the rights of Mexicans in the United States. López Obrador argues that the recent growth in migration flows is a national tragedy and a direct consequence of the “neoliberal” economic strategy’s inability to generate employment opportunities for the majority of new entrants into the job market. López Obrador would encourage the United States to support his effort to slow migration pressures by creating jobs in Mexico while actively protecting the rights of current migrants.

All of these permutations of Mexican migration policy, however, share two limitations that have affected this policy for years. First, Mexico has not explicitly considered what it is willing to give the United States in exchange for continued access to the U.S. job market. Mexicans firmly believe the U.S. economy is far too dependent on migrant labor for Washington to seriously limit the flow. They find it difficult to comprehend that U.S. security concerns and domestic political pressures could override this perceived economic need. Mexicans tend to interpret congressional efforts toward restriction as racist posturing, which the U.S. business community will prevent from becoming law, rather than as a real reflection of public concern over the fiscal and security implications of large migrant flows. This perception has prevented Mexico from thinking seriously about what it can do to prevent a substantial reduction in its access to the U.S. job market, despite the knowledge that this eventuality would be catastrophic for Mexico. Second, Mexico’s vague promises to contribute to a comprehensive migration agreement by policing its borders and creating jobs are not credible.

Although López Obrador appreciates the importance of public security, he firmly believes that the best anticrime strategy is one that emphasizes fighting poverty and inequality. Investing more in policing strategies is important, but clearly plays a supporting role. As mayor of Mexico City, for example, López Obrador hired the security firm run by former New York Mayor Rudolph Giuliani to design an anticrime strategy for Mexico City, yet never implemented its recommendations.

The outcome of Mexico’s 2006 presidential election also matters greatly to the United States because of its impact on Mexico’s political capacity to deal with the domestic economic challenges discussed earlier in this report. Mexico’s ability to create more and better jobs is critical to any long-term migration solution and to its role as an important trading partner of the United States. Mexico’s ability to reform its petroleum sector is an essential prerequisite to ensuring Mexican oil exports to the United States in future decades. Eq

ually important but often overlooked for its impact on the United States is Mexico’s ability to improve its future economic competitiveness. U.S. companies rely heavily on low-cost production facilities and suppliers in Mexico to enhance their international competitiveness. About 80 percent of U.S. trade with Mexico is intra-industry trade designed to increase the global competitiveness of U.S. firms. In a global economy populated by the low-cost, yet increasingly sophisticated production, of countries like China and India, the integration of U.S. technology with lower-cost Mexican production will continue to be an important tool for sustaining the United States and North America’s international competitive advantage in the future.

Although the United States justifiably felt let down by Mexico’s delayed and tepid statements of sympathy after 9/11 and its lack of support for the Iraq war, U.S. officials seem to have underestimated the depth of Mexican disappointment at having fallen off the U.S. foreign policy agenda. Mexico feels underappreciated by the United States and now further disrespected by the tone of the migration debate in the U.S. Congress. Hurt feelings and wounded pride on both sides of the border have inevitably limited policy cooperation. The United States should take the lead in changing the tone of the relationship by reaching out to Mexico’s new president as a valued policy partner, and Mexico should reciprocate by thinking realistically about migration and attacking its pending domestic economic and security agenda.

First Part: Reviewing the Past

The victor in Mexico’s July 2, 2006, presidential election faces many of the same domestic policy challenges as his predecessor—fiscal dependence on volatile petroleum revenues, enormous pension liabilities that expand with Mexico’s aging population, insufficient investment capital in the energy sector, declining global competitiveness, weak job creation and growth, corruption, inadequate rule of law, and increasing crime. How these problems are addressed during the six-year tenure of the new president will determine Mexico’s economic and political course well into the future. The main contenders for the Mexican presidency present a fairly broad array of programmatic solutions to Mexico’s challenges, ranging from continued heavy reliance on the free market to a more activist state that promotes and regulates private economic activity. Rarely have Mexican voters been able to make such an important choice about the future course of their nation. The stakes for the United States in this election are large as well. Finding a solution to the immigration question inevitably involves Mexico. A politically and economically stable Mexico is necessary to manage the flow of Mexicans into the United States, coordinate binational efforts to fight drug trafficking, and resolve a long list of border issues. A stable Mexico plays an important role in fostering U.S. national security. And a stable and prosperous Mexico can contribute significantly to U.S. efforts to ensure its energy supplies and to enhance the global competitiveness of important sectors in the U.S. economy.1 The United States has also come to rely on Mexico as an important ally in trying to secure a hemispheric free trade agreement and mitigating the efforts of Venezuelan President Hugo Chávez to build an anti-U.S. block of Latin American states. The outcome of the 2006 election will determine the tenor of U.S. relations with its southern neighbor and will therefore place Mexico squarely at the center of both the U.S. domestic and foreign policy agendas.

As investment capital returned to Mexico, encouraged in part by the North American Free Trade Agreement (NAFTA), which institutionalized Mexico’s opening to the international economy, Mexico’s political leaders lauded the resulting spurt in economic growth as clear evidence of the success of their market-based strategy. Unfortunately, many Mexicans blamed the ensuing collapse of the peso in 1994–95 and its associated economic crisis on the very same economic strategy. A 7 percent drop in economic activity in 1995, an increase in unemployment, and the spectacular and costly failures of the recently privatized banking and highway systems soured Mexicans on privatization and reinforced the position of politicians who opposed the “neoliberal” economic model. When the opposition took control of the Congress in the 1997 midterm elections, economic reform ground to a halt, leaving behind a broad array of structural weaknesses in the Mexican economy that today threaten the country’s capacity to generate growth and jobs.

Before the 1990s, Mexican foreign policy was based on broad principles—self-determination, nonintervention, and the peaceful resolution of disputes—rather than specific national interests. This policy focus made pragmatic sense for a country that lacked the capacity to stop great powers from meddling in its internal affairs. It also was feasible because Mexico’s insular model of economic development created very few economic interests that needed protection in the international arena. The opening of the Mexican economy to international trade, however, created Mexican national interests that could be protected only by engaging the international community, including the need to ensure access to markets and to protect domestic producers from unfair competition. Since the vast majority of Mexico’s international economic interactions involved the United States, foreign policy innovations focused on its relationship with the United States.

The deepening of these bilateral ties, however, was hindered by domestic opposition in Mexico and the 1994–95 economic crisis. Important segments of the Mexican populace were never comfortable with this new foreign policy focus. Many in the political and intellectual elite, the media, and the urban middle class believed this institutionalization of Mexico’s dependence on the United States was a mistake. NAFTA’s role as the symbol of the new U.S.-Mexico relationship and its association with Mexico’s broader economic opening also made the country vulnerable in the aftermath of the 1995 economic crisis. The crisis weakened the president, forcing him to choose his political battles carefully. Although President Zedillo solidified the bilateral cooperation established by his predecessor, he downplayed the significance of these cross-border ties and did little to promote their expansion or formal institutionalization.

In the economic realm, the country deepened and institutionalized previous policy advances rather than adopting additional measures to ensure future growth and democratic stability. Consequently, the competitiveness of the Mexican economy fell steadily over the past five years. (Mexico surrendered its position as the number two exporter to the United States to China.) The country is still unable to generate more than a fraction of the formal sector jobs needed to absorb new entrants into the job market. The underlying causes of these economic problems are weak investment in human and capital infrastructure and inefficiencies in the country’s energy and labor sectors. Mexico has not yet implemented fiscal reform to increase tax collection, which remains one of the lowest rates in the Western Hemisphere, 11 percent of gross domestic product (GDP). Such a move could generate the funds urgently needed to finance investments in human and capital infrastructure while reducing the government’s dependence on volatile petroleum revenues. Nor has it undertaken changes to the national petroleum company, Pemex, in which declining production and a profound shortage of investment capital threaten the economic viability of a firm that generates a quarter of Mexican exports. Finally, Mexican labor law has not been revised to allow for the increased flexibility characteristic of modern labor markets and to encourage uni*n democracy and transparency in order to eliminate the traditional practice of Mexican uni*n leaders enriching themselves at the expense of workers and economic efficiency. The pension liabilities of the Mexican government, meanwhile, are already greater than the country’s GDP and growing rapidly.

The culprit was a series of structural and transitory factors that undermined governability throughout the Fox administration. Understanding the nature of these obstacles, and particularly the balance between the structural and the more transitory barriers to effective governance, is essential to determining their probable long-term impact. As the last five years have demonstrated, it is not sufficient to propose viable technical fixes to Mexico’s political and economic problems; they also require the political capacity to act. The impact of the 2006 elections on Mexico and U.S.-Mexico relations, therefore, depends heavily on the policymaking environment that will greet the new president, how it interacts with his particular policy preferences and political skills, and his consequent ability to deal with Mexico’s pending reform agenda. Excerpts from Pamela K Starr’s June 17 Report from the Council on Foreign Relations(2005)

“CBP P-3s based in Jacksonville, Florida and Corpus
Christi, Texas contributed to the seizure of over 210,779 pounds (105 tons) of illegal drugs – over 38,600 more pounds (19 tons) than last year,” says Assistant Secretary of Policy for Homeland Security in his May 11 testimony to a congressional committee. But did you know that border security is also busy preventing illegal exports? According to the Assistant Secretary, there were 5,670 investigations into “illegal exports” in FY ’05.

Beyond these stunning facts, the testimony speaks to a high velocity of reoganization in border matters, with a few hot nodes to watch. Most interesting as a node in play is the Program Executive Officer (PEO) of the Secure Border Initiative:

PEO will establish the proper foundation that will enable DHS components to create and maintain a functional and seamless network of capabilities that control the border and disrupt and dismantle the continuum of border crime into the interior of the United States.

The plain language indicates that this office will be the handoff point when Homeland Security awards its multi-billion dollar SBInet Contract in the Fall. A fine node for considering the confluence of big biz and border policy.

We bet that a fine stack of paper is collecting around the activities of the ICE-CBP Coordination Council, which we would prefer to call the council of de-confliction:

The Council meets regularly to proactively consider and address issues to better coordinate and resolve operational and policy matters and to monitor implementation of Memoranda of Understanding (MOUs), among other things. The Council reports to the Secretary on outstanding issues, resolutions, and
disagreements that require further direction or de-confliction. The Council also interacts closely with the Assistant Secretary for Policy, the Director of Operations Coordination and the Chief Intelligence Officer.

The Council is co-chaired by the leaders of each agency, and membership includes the heads of the main operational divisions and main policy and planning arms of both ICE and CBP. The Council’s ongoing mission is to identify and address areas
where greater cooperation can enhance mutual achievement of our missions and be proactive in fostering improved coordination efforts. It addresses a revolving agenda of ICE-CBP touch points, developing, as appropriate and necessary, interagency policies, prioritizations, and procedures to better guide ICE and CBP interactions and
communicate roles and responsibilities in those matters.

During a Council meeting in February, for example, ICE and CBP agreed to issue a joint memorandum to clarify and reinforce key components of the
existing policies by which CBP refers cases to ICE for investigation and to ensure that enforcement results are routinely and effectively shared between the two agencies. The signatories of this memorandum will be Acting Commissioner Spero and Assistant
Secretary Myers, prior to its distribution to the field.

Together ICE and CBP have generated many cooperative successes in the last two years, such as Operation ICE Storm, Operation Texas Hold ‘Em, the ABC Initiative, the LAX Initiative, and the Expedited
Removal Working Group.

http://hsc.house.gov/files/TestimonyBaker.pdf

. . . the Strategic Resource Assessment (SRA). The SRA combines statistics on workload, facility and stakeholders, identifies current and future needs, and outlines short and long-term facility project needs prioritized across the national portfolio. Two pilot region-sites have been completed, Buffalo NY and Tucson AZ. The reports for these sites are under development, but they will establish key trends/facts and priorities.

The next SRA for the San Diego region is underway. CBP is requesting input from SCT and INDAABIN in this area and is scheduling another site visit to gather this information. The schedule for the other regions has been established, with El Paso to be completed in December 2005, and Laredo in September 2005. Source: JWC Meeting Minutes; Las Cruces, New Mexico;
May 24-25, 2005. USDTransportation, Federal Highway Administration, JWC U.S./Mexico Border Transportation Planning.