A Reset for America and Mexico?

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On June 2, Mexican voters will head to the polls to elect a new president, congress, nine governors, and tens of thousands of local officials. Competing for the top job are Claudia Sheinbaum—the chosen candidate of Morena, the ruling party, and former Mexico City mayor, who commands a significant lead in the polls—and Xóchitl Gálvez, a successful businesswoman and former senator supported by a coalition of opposition parties. Six months later, north of the border, the United States will follow suit, with U.S. President Joe Biden and Donald Trump each seeking a second presidential term.

Over the past six years, the tenor of U.S.-Mexican relations has been set by Mexico’s current president, Andrés Manuel López Obrador, also known as AMLO, who has wielded his domestic popularity and influence over migration to the United States to shape bilateral relations in his favor. This has allowed him often to ignore commercial disputes with the United States, domestic security issues, and U.S. concerns over governance in Mexico—a dynamic that has not always sat well with leaders in Washington.

Mexico’s next president, however, will not have the domestic political leeway AMLO enjoys. Whether in or out of office, AMLO has been a fixture of Mexican politics for decades. He commands the personal loyalty of a broad and ideologically diverse set of politicians, is enormously popular throughout the country, and has consolidated a personalist brand of power. His successor will have to navigate the country’s messy political landscape without these advantages.

She will also have less money to spend. Despite symbolic austerity measures, such as cutting his own and other public salaries and selling the presidential plane, AMLO has spent lavishly on white elephant infrastructure projects; patronage programs for the elderly, students, and farmers; and bailing out the state-owned energy company Pemex, which has lost money because of rising labor costs, among other things. These measures boosted his popularity but will hamstring the next administration, as it will not have the resources to sustain such governmental largesse. On top of fiscal constraints, the next president will also have to operate with a more fragile political coalition. Neither candidate is likely to have as strong a congressional majority or as much sway over members of congress as AMLO has enjoyed. Mexico’s down-ballot races are close, and today’s uneasy political coalitions could fracture. This situation leaves space, whether by inclination or necessity, for broader discussions and joint efforts with the United States.

The coming change in administration in Mexico—and the possible return of Trump in the United States—will present an opportunity to reset relations between the two countries. For its own security and prosperity, the United States should seek to boost economic ties with Mexico by enforcing free trade rules and insisting on the fair and equal treatment of businesses. It should also encourage Mexico’s green transition, improve regional security, and work with Mexico to address a host of global issues including financial stability and climate change. For too long, Washington has feared that publicly airing differences with Mexico City would provoke knee-jerk nationalism among the Mexican public. But the United States must not be afraid of committing to defend democracy and human rights in Mexico and supporting Mexican civil society and leaders who demand political transparency and accountability. If it fails to do so, it will squander an opportunity to help make its southern neighbor safer, greener, more prosperous, and more democratic—all of which will also ultimately benefit the United States.

THE CONSEQUENCES OF NEGLECT During the past two U.S. administrations, the fixation on migration has made cooperation on other critical challenges more difficult. AMLO, eager to avoid tariffs and U.S. interference in his country’s politics, agreed to Trump’s push to expand the so-called Remain in Mexico policy, which left Mexico hosting tens of thousands of asylum seekers awaiting processing by the U.S. immigration system. He also acquiesced to Trump’s use of the COVID-19 public health emergency measure known as Title 42 to expel hundreds of thousands more migrants across the border. Trump also worked to tackle perceived trade imbalances, replacing the 26-year-old North American Free Trade Agreement with the U.S.-Mexico-Canada Agreement (USMCA), at the expense of other important subjects, including human rights abuses in Mexico, potential democratic backsliding, fitful efforts to combat climate change, and even security issues. But for all of Trump’s rhetorical tirades against Mexico, he and AMLO still got along relatively well. After all, both proved transactional in their politics and fundamentally more interested in their own domestic political projects than in investing in international relationships.

When Biden took office in 2021, he tried to forge a broader, more cooperative, and less publicly combative relationship with Mexico. The two governments restarted discussions on security issues, supply chains, and commerce. The United States included Mexico in its industrial policy plans, giving the country special access to Inflation Reduction Act subsidies for electric vehicles. Washington also leaned on USMCA enforcement rules to support Mexican unionization efforts, and U.S. legislators and other officials expressed concerns about human rights abuses in Mexico, including about the murder of journalists.

Yet the challenges posed by millions of people arriving at the U.S. southern border quickly subsumed these other issues, and AMLO took advantage of migration’s political salience in the United States to narrow the bilateral agenda to his liking—to migration, where he could extract the most concessions from Mexico’s northern neighbor. Moreover, the Biden administration’s decision to deal with its Mexican counterparts mostly in back rooms rather than in public helped the Mexican president dismiss U.S. concerns about the erosion of democratic institutions, the increasing power of organized crime, and Mexico’s reneging on climate change commitments. AMLO has faced little pushback from U.S. diplomats and has not had to address any kind of counternarrative advanced by Washington. Allowed a free hand, AMLO has pressed his domestic political advantage at the cost of U.S. economic access, the rule of law in Mexico, and democratic checks and balances, leaving his country less safe, less prosperous, and less democratic—and a greater challenge for the United States.

STRENGTH THROUGH TRADE After it becomes clear who will be in charge in Mexico City and Washington, the two administrations must set about strengthening commercial ties. To be sure, trade between the two countries is flourishing. Mexico has displaced China as the United States’ biggest trading partner, with exchanges nearing $900 billion a year. U.S. efforts to near-shore manufacturing and secure supply chains have also boosted investment in Mexico; foreign investors spent over $35 billion each year in 2022 and 2023, and investment in 2024 continues to climb. These deepening commercial ties help the United States gain greater market access across Latin America and establish supply chains in a host of strategic sectors—including the production of large-capacity batteries, electric vehicles, semiconductors, and pharmaceuticals—that have fewer connections to China.

But the recent economic surge comes largely in spite of government policies, not because of them. The AMLO administration, propelled by economic nationalism and a desire for political control, has not been particularly friendly to U.S. policies, including near-shoring. Mexico City has been slow to issue permits and construction licenses for industrial parks and in streamlining customs and border controls, slowing the arrival of new operations and the cross-border movement of goods. It has not invested in energy, water, roads, rails, ports, or other connecting infrastructure that would lower logistics costs and enhance Mexico’s economic competitiveness.

And since AMLO came to power, U.S. companies have found it harder to do business in Mexico. They have faced challenges in the form of arbitrary regulatory changes and enforcement practices, the politicization of the granting of permits and licenses, barriers to market access, and even the sudden abrogation of contracts, to the point that many companies have turned to the U.S. government and the terms of the USMCA for help. The biggest concerns center on energy. In 2013, under the leadership of President Enrique Peña Nieto, Mexico altered its constitution to allow private investment in all aspects of the energy sector. Hundreds of billions of dollars flowed into energy exploration, renewable power generation, storage and distribution, and retail gas stations. AMLO, who as a statist and nationalist is ideologically opposed to these reforms, has thwarted private-sector investments in Mexican energy by suspending auctions, denying permits and grid access, and passing legislation to favor state-owned power producers over private ones (measures later deemed unconstitutional by the country’s Supreme Court).

More broadly, investors are increasingly nervous about the possibility that the USMCA might be repealed, with the trade agreement headed for a mandatory review in 2026. If Washington, Ottawa, and Mexico City cannot agree on the terms of the agreement—with divisions already looming over energy, corn, dairy, cars, and Chinese influence in North American supply chains—then the protections for extant foreign investments will become temporary and will have to be renegotiated every year. Although both of Mexico’s presidential candidates have expressed support for the USMCA, tensions and disagreements remain, particularly regarding energy and genetically modified food. Where Sheinbaum supports the current government’s more nationalist stance, Gálvez has asserted that she will embrace private investment in energy and work to resolve other outstanding cases.

A CLEAN ENERGY FUTURE? Another area that could benefit from closer collaboration between Washington and Mexico City is the decarbonization of Mexico’s economy. Access to clean and affordable energy underpins Mexico’s future economic growth. Yet Mexico has doubled down on dirtier fuels in its energy mix and backtracked on its Paris Agreement commitments, setting targets that, according to the Climate Action Tracker, will raise emissions. And with AMLO having sidelined the private sector, asserting the preeminence of state-owned companies and utilities, Mexico has lost out on the investment necessary to guarantee the country’s energy security. A 2023 study by Morgan Stanley estimates that Mexico will need nearly $40 billion in investment over the next five years in electricity generation to keep up with demand—money its state-owned enterprises do not currently have. To attract multinational corporations that have pledged to decarbonize production, much of Mexico’s new capacity will need to be green.

This is an area where the two candidates appear to diverge more firmly. Gálvez has embraced private-sector energy investment and laid out plans to close inefficient refineries and electricity generators to stanch the losses at Pemex and the Federal Electricity Commission, the country’s largest state-owned electric utility. And although Sheinbaum, a climate scientist, is known for her green credentials, she is still AMLO’s hand-picked successor who will have little leeway to diverge from his statist and nationalist vision. She has advocated for more renewable sources of energy, such as solar plants, but ultimately remains determined to rely on the cash-strapped Pemex and CFE to lead the way, an emphasis that will invariably slow the energy transition.

AN EPIDEMIC OF VIOLENCE The United States can also help Mexico get a better handle on the deteriorating security situation in the country. Before AMLO took office, violence plagued Mexico as organized crime rings clashed with each other and with the authorities in what amounted to a bloody, low-grade nationwide war. The circumstances have only worsened under AMLO. His security strategy, aptly captured by his phrase “hugs, not bullets,” involved easing off criminals and crime rings, expanding social policies, and relying on the military rather than state and local police forces to ensure public safety. Over five years, it has done little to reduce violence—or to stymie the illegal export of fentanyl and other drugs into the United States, where they kill over a hundred thousand Americans each year. Moreover, as corruption and impunity have run rampant among the ranks of elected officials and law enforcement, Mexico’s organized crime networks have continued to expand throughout the country and into other sectors, including by forming protection rackets for the export of avocados and limes, the sale of contraband oil, and the smuggling of migrants.

AMLO has neither sought nor allowed much assistance from Washington. On entering office, AMLO worked to wind down security cooperation with the United States. He ended the Mérida Initiative—a bilateral program that ran from 2008 to 2021 and allocated billions of dollars for equipment, training, and judicial programs to strengthen the rule of law in Mexico—because of his long-held suspicion of U.S. involvement in Mexican affairs. It was replaced by the policy-light U.S.-Mexico Bicentennial Framework for Security, Public Health, and Safe Communities, under which bilateral programming and spending have fallen significantly. AMLO has also hamstrung Drug Enforcement Administration (DEA) operations in Mexico and limited other joint security initiatives, reducing the number of drug and asset seizures and arrests, and limiting visibility into illegal drug supply chains even as U.S. overdoses related to these substances continue to rise.

As mayor of Mexico City from 2018 to 2023, Sheinbaum took a different tack. She focused on enforcement, hiring thousands of new police officers to patrol the capital, installing tens of thousands of cameras, and expanding police training and raising salaries to improve skills and performance. She granted more police the power to investigate crimes and to work with prosecutors to build stronger cases against criminals, and she created neighborhood watch programs to involve communities in crime prevention and public safety. And her city government was, albeit quietly, more open to working with the U.S. government and the DEA. Gálvez, too, has promised to go after criminal groups and expressed openness to working with the United States, calling for a yet-to-be-defined North American security agreement. She is less keen on the military taking the lead, as troops are not trained in domestic law enforcement or legally able to investigate crimes. Instead, she has promised to prioritize civilian policing, a measure that would both improve public safety and strengthen the rule of law.

THE MIGRATION CONUNDRUM Migration will continue to loom large in the bilateral relationship. In both 2022 and 2023, U.S. authorities had over two million encounters with migrants crossing the southern border, breaking the previous record highs from around two decades ago. And where once most migrants hailed from Mexico and Central America, more than half of those stopped at the border today come from countries much farther afield, such as China, Colombia, Ecuador, India, Turkey, and Venezuela—the knock-on effect of mounting global crises, such as climate change, as well as economic instability, political repression, and violence.

The Biden administration has maintained Trump’s policies, forcing Mexico to take back tens of thousands of migrants of many nationalities, where they must either wait for asylum proceedings or are consigned to permanent deportation. At Washington’s behest, Mexico has broken up migrant caravans, pulled people off trains, set up checkpoints, and bused people back down south toward the border with Guatemala. In the presidential campaign, neither Mexican candidate has delved into exactly how they would cooperate with the United States on this issue or address the challenges of integrating hundreds of thousands of people stranded on the Mexican side of the border. If either lets the status quo persist, the border could well become even more chaotic and deadly.

DEMOCRACY NOW The fate of Mexico’s democratic institutions will affect the United States in the years to come, as their further corrosion will likely slow economic growth, increase insecurity, and spur migration. Mexico’s democracy remains young; the country’s official transition to democracy only took place in 2000, after decades of single-party rule under the Institutional Revolutionary Party (PRI). But it is fragile and made weaker by AMLO’s actions. He has eroded or done away with many of the painstakingly built checks and balances over his five years in office. Throughout his tenure, AMLO has vilified and cut funding to the independent electoral agency and the freedom of information institute in an effort to personalize and expand his presidential powers. He has replaced experts and civil servants with loyalists in once independent regulatory agencies, independent watchdogs, and the Supreme Court. He routinely attacks journalists and civil society leaders in his daily press conferences, brooking no criticism for his government or his policies.

It is unclear whether Sheinbaum will follow AMLO’s lead on the use of presidential power. Although she may be more technocratically inclined, and could reinstall some experts in relevant governmental roles, she, too, supports limiting the independence of government watchdogs and courts. Gálvez, on the other hand, has promised to reinstate experts in regulatory agencies and oversight committees and maintain the independence of judges. She has also discussed bringing back the National Anticorruption System, an agency designed to go after public graft, as it was effectively shuttered under AMLO.

A RELATIONSHIP BUILT TO LAST Of course, the status of U.S.-Mexican relations also depends on the outcome of the United States’ own elections. A Biden administration is more likely to lean into green transition, human rights advocacy, and a broader security agenda. A second-term Trump administration, however, is likely to care little for renewables, less for private investment guarantees, or for the niceties of human rights and democracy, doubling down instead on suppressing migration—red meat for the Republican Party’s base.

Trump is also likely to bring back the public threats in dialogue with Mexico’s leader. In the short term, this may be more effective than Biden’s quieter, more conciliatory approach and may lead Mexico to acquiesce when challenged on matters such as migration. But the singular focus on the southern border, and on unilateral policy rather than cooperation, would be a mistake; Mexico’s economic, social, and political health are also of major importance to the United States.

Regardless of which administration ends up in the White House, several key policies will serve U.S. interests with its southern neighbor. For starters, Washington should work to shore up the USMCA. The Biden administration has formally disputed Mexico’s restrictions on genetically modified corn imports, which affect U.S. farmers, but hesitated to officially do much on energy—the largest companies involved have managed to reach resolutions without Washington’s intervention, and the issue is very politically sensitive. This serves neither economy well, favoring powerful companies while still subjecting small and medium-sized enterprises to unfair treatment on the part of the Mexican government, discouraging future investment. More aggressive enforcement of USMCA regulations, along with a commitment to sustaining the accord well into the future, is vital to spur investment in Mexico—in ways that will ultimately benefit the U.S. economy as well.

Mexico’s next president will not have the domestic political leeway AMLO enjoys. Migration will remain a central subject in the bilateral relationship, as people keep coming; and both Biden’s and Trump’s failures to stem the flow of migrants signal that it is time for a major policy change. Mexico is likely at its breaking point, with the government incapable of halting the hundreds of thousands of people heading north each month—or of supporting the millions who wind up remaining in the country. To prove that it is willing to act as a partner on this shared issue, the United States can provide more resources to support Mexico’s asylum system, which is groaning under the weight of nearly 400,000 backlogged cases of its own, and for communities looking to integrate millions of refugees and asylum seekers.

Most important, the United States can speed its own migrant processing system by adding hundreds of judges and asylum officers so that wait times can fall from years to months. Greater transparency, efficiency, and efficacy at the border will bring more certainty to migrants with credible asylum cases and help dissuade those unlikely to pass the legal threshold of asylum from embarking on the arduous journey to begin with. And the United States can continue to expand legal pathways for migrants, including through guest worker programs, family reunification, and humanitarian visas, so that people do not have to trek to the U.S. border simply to present themselves to U.S. officials.

As the United States expands its agenda with Mexico, it is also time to change diplomatic tactics. Confidential conversations remain helpful when addressing difficult issues. But public disagreements are useful, too, setting guardrails on issues that matter to Washington, including the unequal treatment of companies, unfulfilled climate change pledges, corruption, and state-sponsored political persecution south of the border. And for the many Mexicans pushing for more openness, transparency, and accountability from their own government, the United States should publicly reaffirm that it takes its own commitment to democratic values seriously.

Little change in the bilateral relationship will happen between now and the resolution of both countries’ elections as domestic politics reign. But as the two new presidential terms begin, both neighbors should work together to better address the host of inescapable and shared challenges they face.

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Source link : https://www.foreignaffairs.com/mexico/reset-america-and-mexico Author : Publish date : 2024-05-27 03:00:00 Copyright for syndicated content belongs to the linked Source .