NAFTA and the new Mexican presidency.

• Author: Murphy, Ewell E., Jr.

THE ANNUAL HENRY T. KING JR. ADDRESS ON NORTH AMERICAN RELATIONS BEFORE THE GREATER CLEVELAND INTERNATIONAL LAWYERS GROUP

CLEVELAND, OH

January 23, 2007

1. Three Pressing Problems

   When Felipe Calderon looks at Mexico from the window of his presidential office, he sees three pressing problems he must solve.

   The immediate problem is the disputed legitimacy of his election. The electoral tribunal declared him winner, (1) but the opposition claimed fraud; they blocked Mexico City's main avenue with protests, met massively in the central square, and proclaimed Andres Manuel Lopez Obrador as the duly elected President. Their fury was so great that Calderon could be sworn into office only by entering the Chamber of Deputies through a back door and slipping out again after a four-minute ceremony interrupted by catcalls from the opposition. To be an effective president of Mexico, Calderon must earn the support of more Mexicans.

   Even if Calderon earns that support, a continuing problem is the party make-up of Mexico's newly elected national Congress. In each house, Calderon's party has only a plurality, less than Lopez Obrador's party plus a significant third. (2) Unless Calderon can gather other-party votes for major projects, his legislative initiatives will be doomed from the start. Beyond those problems of public and Congressional support looms the third problem, Mexico itself. Mexico is the world's most populous Spanish-speaking country, (3) with more than 107 million people, (4) and Mexico is well-endowed with natural resources, but for most of those people Mexico's resources have produced only marginal and unevenly distributed gain. The richest 10% of Mexicans own 45% of all wealth; the poorest 10% have only 1. 6%. (5) Half of the population lives in poverty, surviving on less than four dollars a day. (6) Twelve million Mexican families scrounge at makeshift jobs in the "informal economy." (7)

   That economic disparity breeds waves of resentment against the governing class. Recent surges were the Zapatista insurrection in Chiapas, the civic rebellion in Oaxaca, and the anti-Calderon demonstrations in Mexico City. The disparity also breeds crime and corruption, which discredit government itself. To be an effective president, Calderon must move Mexico into greater and more equally shared prosperity.

2. Three Key Issues

   When President Calderon looks at Mexico, those are the problems he sees. But Mexican presidents must look at more than Mexico. An earlier Mexican president said it famously: "Pobre Mexico, tan lejos de Dios y tan cerca de los Estados Unidos." "Poor Mexico, so far from God and so near to the United States." (8) Calderon must look north; he must deal with issues that involve Mexico and the United States.

   When President Calderon looks north, he sees three key issues. By provision or omission, the North American Free Trade Agreement (NAFTA) brackets each of those issues.

   1. Immigration

      The first key issue is immigration. By one estimate there are 11 million illegal aliens in the United States, of which some 6.3 million are Mexicans. (9) Of the 1 million people who enter illegally through the Mexican border each year, half are Mexicans and the rest are mainly from Central and South America. (10) About 9% of Mexico's citizens live in the United States, and about half of Mexican-born U.S. residents are illegal aliens. (11)

      The last concerted U.S. response to that problem was a 1986 law that legalized nearly 3 million illegals and increased penalties against employers who hire illegals. Until recently the enforcement of those employer penalties has been lax. As the problem deepened, the U.S. Congress dithered. Finally, in December 2005, the House passed a bill to criminalize all illegals. In May 2006, the Senate countered with a bill to legalize most current illegals and to establish a guest worker and citizenship track for others. Reconciling those seemingly irreconcilable bills is a priority task of the new U.S. Congress of 2007. (12)

      Understandably, Mexico favors amnesty and guest worker access. In meetings with President Bush, Calderon's predecessor urged those solutions. In campaign speeches and post-election statements, Calderon has continued that advocacy. But the U.S. Congress must decide, and the friendship of future Mexico-U.S. relations hangs on the tone and substance of that decision. If Mexico sees U.S. immigration policy as a disdainful rejection of Mexicans, President Calderon will be politically obliged to distance himself from the United States, with resulting harm to both sides.

      On that immigration issue, NAFTA is almost silent. Regarding the movement of persons between NAFTA countries, NAFTA requires only temporary access for specified categories of "business persons;" (13) it speaks not a word on the more sensitive subjects of guest workers and illegal aliens.

   2. Energy

      The second key issue involving Mexico and the United States is energy. It has two dimensions, transnational and national. Its transnational dimension--the right to restrict the movement of energy products across the Mexico-U.S. border--is a milestone...