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The U.S.-Mexico Relationship Is About More Than Migration

In the latest event from the Pivotal States Series, which examines alternative U.S. foreign policy approaches to the world’s key nations, American Statecraft Program Director Christopher S. Chivvis was joined by Vanda Felbab-Brown, senior fellow for foreign policy at the Brookings Institution, and Shannon O’Neil, vice president of studies and senior fellow for Latin American studies at the Council on Foreign Relations, to discuss the United States’ relationship with its southern neighbor.

Tino Cuéllar, president, Carnegie Endowment: Mexico and the United States are both enormous and intricate countries with outsized stories and importance beyond their own borders. The United States is a major pillar of what was once often referred to as the rules-based international order, and its massive economic and cultural influence are felt in nearly every corner of the world. Then there’s Mexico, which looms large in a Latin American region of nearly 700 million people and has in myriad ways been a major part of the story of the United States itself.

The relationship with Mexico is among America’s most important, but the global shocks of recent years from the coronavirus pandemic to the war in Ukraine to the ongoing Middle East crisis have turned attentions elsewhere and narrowed the public conversations on this relationship to challenges at their nearly 2,000-mile-long border all too often.

To be sure, the two countries faced significant shared challenges at the border, including irregular migration, trafficking, and organized crime. But there’s also a story of interconnectedness. In states like California and Texas, hundreds of thousands of people commute across the border each day to work, to attend school, to visit family members, to take part in daily life.

Earlier this year, Mexico became America’s largest trading partner, surpassing China. Bilateral trade during the first four months of 2023 represented over 15 percent of all the goods exported and imported by the United States. In addition to growing trade, Mexico is a site for American companies to invest, for global firms to move production, as part of a growing trend toward nearshoring. And Mexico’s economy minister said that some 400 companies were interested in relocating facilities from Asia to Mexico.

Nor can we ignore the shared challenges these countries face in a broad range of areas well beyond the border. The climate crisis and extreme weather were affecting agricultural productivity, livelihoods, and coastlines in both countries. Global shocks have had serious effects on the cost of living in both countries, and there’s an urgent need to control inflation. And of course, both countries face serious domestic challenges in their democracies. For all these reasons, today’s conversation about a more strategic approach to the U.S.-Mexico relationship is particularly important.

Christopher S. Chivvis, moderator: Vanda, you’ve written some great articles in Foreign Affairs and other publications recently, with the implicit view that U.S. policy toward Mexico is too focused on migration. Not that it’s not important, but that the way that the United States has approached Mexico has debilitated its capacity to address issues such as drug trafficking and fentanyl. Would you put less priority on migration than most people in the United States do right now?

Vanda Felbab-Brown: Migration is important to very many people. To me, the issue is not to downgrade it, but not to sacrifice other national interests and to be able to separate it from other issues where we need to have tough conversations with the Mexican government.

Unfortunately, what has happened since President Donald Trump’s administration is that successive Mexican governments, especially the current government, have learned that as long as they control the migration spigot and cooperate with the United States, but also allow migration flows to take place, they can deflect pressure from other issues such as cooperation on fentanyl, the collapse of rule of law in Mexico, and the way the criminal groups are really taking over the country. All of that is handled with velvet gloves because the migration issue so dominates the agenda. Essentially, it puts the United States in a straitjacket.

What I would really love to see is a robust migration reform at home that will allow the United States to have regularized flows of migrants so that it is not in this bind.

Christopher S. Chivvis: How do you think about U.S. interests in Mexico, Shannon?

Shannon O’Neil: I look at U.S. national security policy and its evolution in recent years, particularly the growing concern with the economy in national security and securing critical supply chains, whether it’s semiconductors, large-capacity batteries, electric vehicle batteries, critical minerals, or pharmaceuticals.

As the United States looks around the world, Mexico provides the most viable commercial solution to those challenges. How do you secure access to medicines, technologies, critical minerals? Mexico is a big part of that solution. There’s the drug issue, but a safer and more economically vibrant Mexico is incredibly important for U.S. national security because it reverberates into the United States across all of these dimensions.

Christopher S. Chivvis: How do you see the promise of an even deeper economic relationship with Mexico?

Vanda Felbab-Brown: We are already seeing deglobalization and the movement to nearshoring or friendshoring, which accounts for the fact that Mexico is now the number one U.S. trading partner. But Mexico also suffers from enormous challenges—the most significant and fundamental one is the collapsed rule of law.

Criminal groups have a daily presence and impact on the lives of many Mexicans. They are essentially ruling larger and larger parts of Mexican territory. They are deeply implicated in manipulating elections. They are taking over legal economies in Mexico. It’s kind of notorious that if you buy an avocado in the United States from Mexico, you have paid money to a cartel. You can extend that to corn and citrus too. Water distribution to Mexican citizens is deeply penetrated by Mexican criminal groups. So very many domains of what the state should be in charge of are, at minimum, interfered with and sometimes outright controlled by vicious criminal groups. For the two countries to deeply integrate economically requires rule of law in Mexico, and we have the opposite of it.

Christopher S. Chivvis: Shannon, what do you think about that?

Shannon O’Neil: The rule of law is a huge issue, especially as you move down these supply chains. The big multinationals can pay for security or get the attention of the governors and the like in order to deal with some of the challenges they face. But the suppliers that are often smaller, down the tiers of the supply chain, often have significant challenges.

Another challenge is access to energy, particularly clean energy. Many of these companies have made climate promises, and not having access to clean energy in manufacturing might be a no-go for shareholders. There are also infrastructure challenges in Mexico. It hasn’t invested in the kinds of infrastructure that would really allow the manufacturing boom you’re seeing in some other places, particularly in Asia.

Christopher S. Chivvis: Some members of the U.S. Congress have discussed the possibility of an authorization for the use of military force against the cartels. There’s been talk about designating them as foreign terrorist organizations. What do you think are the pros and cons of that kind of an approach to Mexico?

Vanda Felbab-Brown: I think there really are no significant pros to military action into Mexico. So whether this would be the use of drones, for example, or special operations forces, one can imagine a set of targets. But they will be very limited in what they can actually accomplish. They will be able to take down a lab or a certain amount of cartel members—none of which really have a significant impact.

What we need is for Mexico to find the will to start taking back its sovereignty. Mexico is often complaining about the imperialist gringos undermining its sovereignty, but the reality is that the criminal groups have taken Mexican sovereignty away from the Mexican people. The Mexican people and government need to realize that for their own reasons they need to be moving against the cartels. And this is not what’s going to be set off by any kind of U.S. military action into Mexico. In fact, that agenda, in my view would, be worsened.

There are Mexican law enforcement officials, military officials, and people who are enormously frustrated by how the cartels are undermining their lives. They would like to see far more robust cooperation, and they would like to see far smarter security policies in Mexico. But even those voices would be hampered in the ability to embrace cooperating with the United States if we had U.S. military action.

The issue of designating criminal groups as foreign terrorist entities is a more complex one. The negative is this is enormously politically explosive in Mexico, and we would likely see some retaliation of Mexican policy. The big downside would be the economic implications. Mexican criminal groups are deeply infiltrated into many legal economies in Mexico. Paying extortion fees might be necessary for survival for the business, but it’s certainly in violation of material support clauses. Those clauses carry very significant penalties in the United States, and they carry penalties for U.S. businesses engaging with those who provide material support. So you could jeopardize trade, outsourcing, and nearshoring.

One of the advantages is the designation would significantly boost the priority that the United States accords to intelligence gathering in Mexico. The cartels and the fentanyl smuggling are killing more Americans than any other issue, so you think Mexico would have high prioritization on national intelligence collection. In fact, collecting intelligence on China and Russia, both of which are players in Mexico, is far more important than collecting on the cartels. Designation would allow a wide set of actors to collect intelligence as well as engage in operations. It would really enable a far greater rule-of-government approach.

Shannon O’Neil: One of the biggest challenges is that Mexico spends less than 1 percent of its GDP on security writ large. You just can’t make a country secure if you’re only spending that amount of money. Also, as we’ve seen over this last Mexican administration, there has been a move away from relying on state and local police officers and building up those civilian forces to a focus on the military. You don’t solve a problem like this by surgical strikes into communities and pulling back. You need community policing, you need to know who are the people who are participating in these networks, and then you need to find a way to bring rule of law through community by community. Mexico has seen successful cases where communities have taken back their streets from these criminal organizations, at least in large part.

In the early 2010s, Ciudad Juárez, which is across the border from El Paso, was the most dangerous city in the world. It’s still not the safest place in the world, but it’s so much better. And partly that was because local police, local community business leaders, and civil society really came together. You’ve seen a similar thing in Monterrey, which is the hub for all of this nearshoring that’s happening in Mexico today. They had moments that were incredibly difficult in terms of security and violence, and they’ve been able to move back from some of those brinks. This is not a hopeless problem that can’t be solved, but it is going to be incredibly difficult.

Vanda Felbab-Brown: Unfortunately, in many of the places where progress was achieved, it was not sustained. Ciudad Juárez is a prime example. The advantage that the temporary narco peace brought to those communities has really not been sustained to improve law enforcement and policing. And this has now been compounded under President Andrés Manuel López Obrador’s administration by a willful policy on the part of the federal government not to support any efforts to resist the cartels.

I was in Mexico for six weeks in the summer, and I heard from local officials and people about the security challenges. And the key theme was, “We have no backup from the federal government. How do we resist the cartels if we have no backup to take them on?” And that is what Mexico needs to confront.

Christopher S. Chivvis: How should we be thinking about China’s relationship with Mexico, in particular as a provider of precursor chemicals for fentanyl? What would it mean if China were to invest much more heavily in the Mexican economy?

Vanda Felbab-Brown: China has been the principal supplier of precursor chemicals for fentanyl and for amphetamine, both of which are manufactured overwhelmingly in Mexico. Unfortunately, over the past three years, and very intensely so over the past eighteen months, the United States has had no meaningful law enforcement cooperation at all [with either Mexico or China]. The Mexican government would act on some U.S. enforcement efforts and desires but it was zero with China. China has a very different view of law enforcement than President Joe Biden’s administration and the United States.

The United States would like to see law enforcement cooperation be separated from the geostrategic relationship, which obviously has tanked. China subordinates law enforcement cooperation to the geostrategic relationship. And as the U.S.-China geostrategic relationships and competition ramped up in very many different domains, China pulled back from cooperating. But in both Washington and Beijing there has been an effort to put a floor underneath the collapse of the relationship, and that has paid off in the recent summit between Biden and Chinese President Xi Jinping. Xi has again committed himself to cooperating on stopping the flow of precursors from China.

I am not holding my breath as to how robust and how long-lasting that will be, but any cooperation for some months is absolutely better than zero cooperation. China has already taken some actions. It has sent out notices across the Chinese chemical industries that it’ll start cracking down on precursor flows. It has acted on some of the companies—entities that the United States has indicted. And I hope that we can get to far more cooperation with Mexico and that the cooperation will not be reduced to these occasional high-value target arrests.

Christopher S. Chivvis: To what extent should we be thinking about Chinese investment in Mexico and having much of the production that we’re importing from Mexico simply be Chinese firms and production simply in Mexico?

Shannon O’Neil: I think it depends what the nearshoring is for. So historically, for Mexico and China’s relationship, Mexico was unlike other South American nations, where their economies were complements. These South American nations had huge booms in commodity sales because China was using up iron ore, copper, soy, and beef and sending back manufactured goods. Mexico has always been a bit of a competitor. It made the same kinds of things: shoes and toys and electronics. We talk here in the United States about the China shock and the jobs lost. Mexico lost more jobs per capita for sure, if not in absolute terms, because of China’s rise, because the two countries were in direct competition over so many of those jobs in the early 2000s.

So for many years there wasn’t much Chinese investment in Mexico, but you have started to see just in the last few years that it’s growing. I think the question for U.S. national security interests is: what are they investing in? Do we really care if it’s Chinese investment in, say, Mexico-made washing machines or Nike shoes? But if Huawei technology goes into Mexico’s telecommunication grids, especially those near the border, does that matter? So I think it really matters what the investment is. Not all investment is a threat to U.S. national security, but there are specific sectors.

Vanda Felbab-Brown: We are unfortunately in the situation where the current Mexican administration has been indifferent about, for example, accepting highly sensitive Chinese technologies with the potential for backdoor spying along the U.S.-Mexico border. Mexican criminal groups are also nearshoring into Mexico. There is a rise and intensification of the presence of Chinese criminal groups that are engaged in a variety of highly complex relationships beyond drugs with the Mexican cartels. Many Chinese criminal networks are also apparently connected to Chinese government officials. China regularly uses criminal actors as a systematic tool in its foreign policy, from espionage and intelligence to punishing and controlling the diaspora. And in the U.S.-Mexico context, we are seeing a big growth of the role of Chinese money laundering actors on both sides of the border.

Source : Carnegie Endowment for International Peace