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Mexico is the United States’ third largest trading partner, after Canada and China, in terms of total trade in goods, while the U.S. is Mexico’s largest trading partner. As such, the economic ties of the U.S. and Mexico are significantly important to the economy and society in both countries.
Further, the U.S.-Mexico border is not a static line drawn on a map, but a dynamic and ever-evolving place along which substantial daily interaction takes place. Yet the resounding refrain we repeatedly hear from some members of Congress is that building a 1,969-mile fence to separate us from one of our largest economic partners, and the eleventh largest economy in the world, is a key component to solving the issues presented by an outdated immigration system and a requirement that must be completed before moving forward with proposed immigration reforms. To be clear, there is a need for secure borders, but there is also a need for further streamlining and efficiently facilitating the daily cross-border flows of people, goods and services important to the bi-national economic relationship of the United States and Mexico — an economic relationship the following facts highlight.
When President Obama dined with Mexico’s President Enrique Peña Nieto this month at the Mexican leader’s official residence, the meal started with “laminas de atun,” thin slices of tuna.
The appetizer was not a surprising choice. Mexico has tried to get its yellowfin tuna on American plates for decades. Its fishermen are essentially frozen out of the lucrative U.S. market because they catch tuna with a method that has led to the demise of millions of dolphins, and falls below a standard U.S. officials set as “dolphin safe.”
But in recent months, Mexico has made progress in convincing the world that it is being treated unfairly because the U.S. tuna fishing regulation is not applied uniformly.
When former Mexican President Felipe Calderón waged his war on drug cartels, the media were guaranteed a crime photo op every few weeks. Alleged gangsters were thrust before the press along with heaps of guns, money and narcotics. These narco-perp walks were often accompanied by videos in which heavy-breathing suspects confessed how they had committed hundreds of murders and smuggled tons of cocaine to American users. And the parades often coincided with top U.S. officials visiting Mexico and trumpeting how the two nations stood shoulder to shoulder in their joint fight against cartel crime.
However, it is unlikely that U.S. President Barack Obama will be shown any such displays when he visits Mexico this Thursday. Since President Enrique Peña Nieto took power in December, the parades have stopped as part of an overhaul in the government’s security strategy. (Human-rights defenders also decried these staged pantomimes of justice.) Peña Nieto has shifted focus from fighting cartels to modernizing the economy and has encouraged media outlets to dedicate less coverage to decapitations and shoot-outs. In the run-up to Obama’s visit, both governments have emphasized trade and immigration reform over the battle with the cocaine kings. “The Peña Nieto administration has made it clear it wants to reduce the emphasis on violence and wants to talk about other things such as its reform agenda,” says security analyst Alejandro Hope, a former official of Mexico’s intelligence agency, CISEN. “It wants to change the conversation.”
The world’s most important trade body needs a major shake-up in leadership to revive the long-dormant Doha round of global trade talks or else it will become irrelevant among newer, fleeter free-trade agreements, said Herminio Blanco, one of the candidates to take over the World Trade Organization.
Mr. Blanco, who was Mexico’s chief negotiator to create the landmark North American Free Trade Agreement and represented Mexico in the last successful global trade round that created the WTO two decades ago, told The Wall Street Journal in a recent interview that the WTO risked becoming a simple referee of its increasingly outdated rules rather than leading global trade.
As the top suppliers of manufactured goods to the American market, China and Mexico have typically been in direct competition over the past decade. More often than not, the business went to China. But with labor costs rising there and Mexico pushing for new access to Chinese consumers, the rivalry is shifting, economists and trade analysts say.
No longer pure competitors but not quite partners, the two countries are moving toward an expanded trade relationship that could ultimately benefit the United States by boosting U.S. exports and keeping cheap imports flowing to U.S. consumers. Mexican President Enrique Peña Nieto’s recent trip to China, coming just four months into his term, has been viewed here as a smart overture aimed at mending ties between two nations that have often been at odds over trade issues.
President Barack Obama will find that much has changed in Mexico when he arrives on May 2. Our neighbor to the South — and second-largest export market — has moved far ahead with reforms. As Congress crafts comprehensive immigration legislation, Democrats and Republicans must keep in mind that Mexico is changing rapidly, and policies crafted to reflect yesterday’s Mexico will not help the U.S. make the most of the potential of today’s and tomorrow’s Mexico.
Mexico’s future is bright, and tapping into this growth and economic prosperity is vital to U.S. competitiveness. But the U.S. needs immigration reform to build on its huge bilateral trade with Mexico — more than $1 billion in goods and services each day, or $45 million an hour.
Mexico envisions a trade deal tying it to the European Union, U.S. and Canada as the future of transatlantic commerce and would welcome joining talks between the U.S. and EU, Foreign Minister Jose Antonio Meade said. An agreement that binds the nations of the North American Free Trade Agreement to the EU, the world’s two largest free- trade areas, makes the most sense because it would leverage the economic power of the Nafta nations, Meade said. Mexico already has a free-trade deal with the EU, while Canada and the U.S. are each negotiating their own trade deal.
Having each nation in a separate bilateral agreement with the EU wouldn’t “take full advantage of the economies of scale and scope that have resulted from Nafta,” Meade said in an interview yesterday in Washington. “We would be very willing to participate from the outset if from the outset it would be made to be something regional rather than bilateral.”