Mexico, seen from the US

Luis Rubio
Mexico today – January 27, 2021

“It’s in the United States’ best national interest for Mexico to become a prosperous country,” Lieutenant General Brent Scowcroft, former National Security Advisor under President George H. W. Bush, told me when I interviewed him for a book on NAFTA’s 20-year anniversary. Back in 1992, the signing of the NAFTA treaty was perceived in the U.S. as the dawn of a new era in the U.S.-Mexico relationship. NAFTA also entailed a moment of radical change in the way Americans perceived themselves. It was a moment of elation in which the entire establishment reveled. Now, Mexico finds itself once again in a new era, with a new U.S. president that has no margin for error.

Throughout the 20th century, Mexico chose to follow its own path, far from its northern neighbor, so much so that achieving U.S. recognition of the governments emanated from the Mexican civil war was itself an epic feat.

By the 1980s, the U.S. saw Mexico as an anomaly: a country that had not finished resolving its own problems and crises, and that kept its distance. Mexico, for its part, had experienced sudden shifts in its economic policy, fallen into increasingly acute financial and foreign exchange crises and spent years in recession and on the brink of hyperinflation, all due to excessive indebtedness in the 1970s. Rather than adapt to the changes that had taken over the productive world in Japan, the U.S. and Europe, Mexico exhibited a singular lack of clarity regarding the course it needed to follow to achieve its development objectives.

Sometime in the late 1980s, the Mexican government completed an in-depth review, acknowledging for the first time in decades that the financial and economic problem was a product of its responsibility (irresponsibility, in fact) and began to implement a series of reforms capable of transforming the country’s reality. One of those changes was in the relationship with the U.S.

The new Mexican approach crystalized in NAFTA —a mechanism to promote investor certainty— was perfectly aligned with the U.S. geopolitical logic. The problem was that what Mexico was willing to do in the following years did not meet U.S. expectations. Mexico did not see NAFTA as the beginning of a transformative era, but as the end of a process of pared-down reforms. With the end of the Cold War, Americans, for their part, moved on to other issues, largely forgetting about Mexico.

All this eventually led to a clash of perceptions. For Mexico, NAFTA was a lifesaver that allowed a return to economic growth, albeit one it did not fully exploit. In the U.S.’ view, Mexico squandered NAFTA as a lever for transformation, ending up mired in a sea of corruption, human rights violations, and institutional weakness. The expected cross-border integration of education and services never came about. The U.S. disappointment that followed was no small thing, and lingers to this day.

Twenty-five years after NAFTA, Mexico has improved in countless ways and achieved a financial stability that stands in stark contrast to the chaos that preceded it. However, the country’s fundamental challenges -poverty, regional inequality, a dismal justice system, violence, and crime (much of it linked to the U.S. through drug trafficking) and, above all, an incompetent government- remain. In practice, NAFTA’s success allowed Mexico not to have to transform itself.

Mexico’s lethargy translated into growing U.S. desperation which led to developing projects aimed at forcing Mexico to carry out a complete overhaul of its institutions. That’s to say, the context of Joe Biden’s arrival to the White House is not favorable to the old Mexican political system that President Andrés Manuel López Obrador has been recreating for the past two years. A system that he is strengthening minute by minute. The accumulated U.S. disappointment will inevitably have practical expressions that do not fit well with the distancing and contempt shown by the current Mexican government toward Biden. The pretense that the depth of interconnection between the two countries can be ignored free of cost or consequences is absurd. Disregarding the shared U.S.-Mexico interests is even worse.

Today, there are two key factors in the North American region that will determine Mexico’s future.

The first factor are the tensions within American society itself, largely the result of technological change, economic globalization, and the information age. Although Mexico is not the cause of these changes, it is a key player in them, reason why Donald Trump made us a scapegoat. The end of the Trump era does not, however, entail the end of strains that already existed and that he capitalized on. In a rational world, this would lead Mexico to develop of a strategy of rapprochement, with the U.S. people and government, to try to ease these sources of conflict. The opposite of what President López Obrador is doing now.

The other key factor is the conflict between the U.S and China. Mexico has a great opportunity to attract much of the North American investment currently concentrated in China. However, that would require a strategy politically, economically, and radically unlike the one undertaken by the López Obrador administration. Inexplicably, Mexico faces once again the possibility of missing its next great development opportunity for the sake of following a series impoverishing 1970s economic dogmas.

* Luis Rubio is chairman of México Evalúa-CIDAC and former chairman of the Mexican Council on Foreign Relations (COMEXI). A Spanish version of this Op-Ed appeared first in Reforma’s newspaper print edition.
Twitter: @lrubiof

https://mexicotoday.com/2021/01/27/opinion-mexico-seen-from-the-us/