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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Obama Heads to Mexico

by Shannon K. O'Neil
April 29, 2013

Mexico's President-elect Enrique Pena Nieto listens to U.S. President Barack Obama (R) in the Oval Office of the White House in Washington November 27, 2012 (Kevin Lamarque/Courtesy Reuters). Mexico's President-elect Enrique Pena Nieto listens to U.S. President Barack Obama (R) in the Oval Office of the White House in Washington November 27, 2012 (Kevin Lamarque/Courtesy Reuters).

When President Obama arrives in Mexico this week he will face almost two completely different governments when it comes to discussing security and economic relations. In an op-ed that I wrote for the Dallas Morning News (you can access it here or below), I discuss these differences and what the challenges will be for the bilateral relations going forward.

President Barack Obama heads to Mexico this week to meet with his recently installed counterpart, President Enrique Peña Nieto. On the two most important issues for the U.S.-Mexico relationship — economics and security — he faces two almost different governments, made up of disparate teams, agendas and strategies. How Obama and his administration manage each of these issues and groups will shape both countries far into the future.

Though at times given shorter shrift than security and immigration, growing U.S.-Mexico economic ties have the potential to transform both nations. Since the North American Free Trade Agreement began 20 years ago, trade has quadrupled to about $500 billion a year. In this, Texas leads the rest of the nation, with some $16 billion in goods crossing the border each month, supporting nearly 500,000 jobs.

As important as the sheer amount of trade, the agreement shaped the decisions of thousands of companies, including Texas-based Dell, Pilgrim’s and Taylor Farms, companies that began making and growing things on both sides of the border to gain a competitive edge. Today, for every manufactured product “made in Mexico,” on average, 38 percent was actually made in America by U.S. workers. These links far exceed other nations — the comparison for China, Brazil and the European Union is 4 percent or less; for Canada, our other NAFTA partner, it is 25 percent. In this age of global supply chains, Mexico is by far the best partner not just for U.S. companies but also for their workers.

As Obama focuses on these ties, he will find an able and willing partner in Mexico. Peña Nieto has prioritized economic reforms above all others, with a comprehensive and ambitious agenda to change Mexico’s labor laws, education system, telecommunications and broadcasting, financial architecture, energy sector and taxes. This effort is led by an aggressive and cohesive team consisting of the finance minister, foreign minister and commerce secretary, among others. It is also a group with years of experience living in the United States, completing impressive degrees from MIT, Yale and Wharton.

Yet no less important for the two neighbors is security. Under Felipe Calderón’s administration, more than 70,000 Mexicans were killed and many more disappeared in violence related to drugs and organized crime. Regular crime, too, has risen, with 40 percent of Mexicans in a recent survey reporting that they or a family member had been a victim of a crime in the past year. This growing crisis opened the door to greater bilateral efforts. After years of cautious circling, U.S.-Mexico security cooperation — through the Mérida Initiative and other efforts — blossomed, setting the two neighbors on a different and more collaborative path.

On this policy front, the direction Peña Nieto’s government plans to take is less clear. While repeatedly promising to reduce violence, the details of his administration’s security plan remain vague — suggesting more spending on prevention and social programs. Even the concrete shifts announced — for instance, creating a new federal gendarmerie — have been clouded by contradictory explanations and timelines. The efforts to recentralize the security apparatus by bringing the autonomous Federal Police back under the control of the Ministry of Interior still await the definition of basic reporting lines and the stamp of a finally confirmed executive secretary of the national public security system charged with coordinating security efforts (an area where the previous government struggled). Finally, the leaders of this side of Peña Nieto’s government — Osorio Chong, ex-governor of Hidalgo; Manuel Mondragón y Kalb, the deputy secretary of public safety and previously Mexico City’s top cop; and Jesús Murillo Karam, Mexico’s attorney general and also an ex-governor of Hidalgo — are less familiar to the United States, and some worry less open to working with their neighbor than their predecessors.

To be fair, security is harder. After more than a decade of underperformance, most Mexicans agree on what needs to be done economically. In contrast, there is no ready security blueprint for the way forward, for what will work to make Mexico — and by extension the United States — safer. And the issues on which there is some consensus — cleaning up Mexico’s police forces and courts and expanding programs to help youths and communities at risk — were started under the Calderón administration, making it a tricky sell for a government trying to differentiate itself.

For Obama, the challenge this week will be to push forward on both fronts, recognizing and embracing the economic ambitions while also ensuring that security cooperation doesn’t falter. What really matters is what happens after the visit and how the U.S. government works with all of these elements and directions in Peña Nieto’s Cabinet. Because the outcome matters — as no other country affects the United States on a day-to-day basis as much as Mexico.

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