Shannon K. O'Neil

Latin America's Moment

O'Neil analyzes developments in Latin America and U.S. relations in the region.

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U.S. and Mexico: Ties that Bind

by Shannon K. O'Neil
June 20, 2012

Yolanda Guzman and her daughter leave Mexico City's Martinez de la Torre Market Yolanda Guzman and her daughter leave Mexico City's Martinez de la Torre Market (Daniel Aguilar/Courtesy Reuters).

This past week I talked with PBS NewsHour about Mexico’s upcoming elections, economic transformations, and deep ties with the United States. I look forward to your feedback in the comment section and on twitter.

As Mexicans move to elect a new president on July 1, whoever wins the keys to the official residence, or Los Pinos, will be tied to the United States in a number of ways: on border security, as trading partners, and as a top energy supplier to its northern neighbor.

“There’s probably no other country in the world that’s as intertwined with the United States. Our economies are intertwined; Mexico is now the second destination for U.S. exports and the third largest trading partner overall,” said Shannon O’Neil, fellow for Latin American studies at the Council on Foreign Relations.

The U.S. automotive, food, and computer and electronics industries depend on Mexican consumers, said O’Neil. “For twenty one out of fifty states, Mexico is the No. 1 or No. 2 destination for their exports,” she said. “And it’s not just the states on the border that have huge trade with Mexico, but as far away as New Hampshire, Vermont, Michigan and Indiana.”

Mexico also is a friendly source of oil, O’Neil noted. It’s the United States’ third largest supplier behind Canada and Saudi Arabia, according to the U.S. Energy Information Administration.

“So keeping our lights on and our cars going depend today much on Mexico,” she said.

Since the two countries share a border, they also share the problems and responsibilities of regulating the environment, preventing drug trafficking and maintaining security.

Every president of Mexico has had a different take on U.S. relations, but all of the top contenders in the current race have indicated they will work with the United States, said O’Neil.

The economy in Mexico is recovering faster than the United States. Helping transform Mexico’s economy is a growing middle class, she said. View a chart of GDP growth in both countries:

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“Thirty-plus years ago, Mexico was a commodity-driven, oil-driven, inward-looking economy,” said O’Neil. “Today it is a manufacturing and services-based economy, export-led with a focus on the U.S. market and that is fundamentally different than just a few decades ago.”

Partly because of Mexico’s economic growth, immigration between the two countries has slowed to a net zero last year. The slowdown also can be attributed to a demographic shift in Mexico in the last several years, O’Neil said. “There are fewer Mexicans turning eighteen and looking for jobs than there were in the past. And more and more Mexicans are staying in school longer and investing in their future and investing in their skills. So they’re not leaving the country. They’re not thinking about going abroad at fifteen or sixteen anymore, they’re staying in school.”

Mexico is becoming an increasingly urban society as well, said O’Neil. “So the old days of a campesino (peasant) wearing a sombrero riding a burro—it’s a reality for a few Mexicans now, but very few. It’s a more urban society. And that’s a total transformation from back in the fifties or sixties.”

Helping drive the current conditions is a transformed government. “There are still problems with corruption, accountability and transparency—in particular at the state level,” she said. “But it also is a democracy. They’re about to have elections that almost everywhere in the world people think are going to be free and fair. And that’s something new.”

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