U.S. & MEXICO

From distant neighbors to natural partners

 
 
MCLARTY
MCLARTY

tfmclarty@maglobal.com

Thirty years ago, the journalist Alan Riding began his best-selling book, Distant Neighbors, with this observation: “Probably nowhere in the world do two countries as different as the United States and Mexico live side by side.”

What was true then is now an increasingly distant memory. Over the last decades, the growing connections between Mexico and the United States — of our economies, our cultures and our interests — tell a story of breathtaking transformation. Besides the concrete achievements of increased trade and investment, we see a striking change in tone from officials on both sides, from the suspicion and defensiveness of generations past to confidence, optimism and, increasingly, trust.

As someone who has followed Mexico closely for more than 20 years, first as a White House official and since in private business, I’ve seen this alignment take shape. Today, perhaps for the first time, the shared upsides in the relationship are clearly trumping our differences. And they point to new opportunities.

President Obama can capitalize on this positive moment when he visits Mexico later this month for a summit of North American leaders. It will be the fifth trip to Mexico of his presidency — the most to any foreign country. He will face a generally positive agenda, but also an existential question: Where’s this relationship headed?

Several recent developments can point the way.

In late December, Mexico approved a historic liberalization of its oil and gas industry, opening the door to foreign investment for the first time in 85 years. The reform was the latest in a series of achievements by President Enrique Peña Nieto during his first year in office, including new laws governing telecommunications, education, banking and taxes. The energy reform is in many ways the most far reaching. It coincides with the revolution in oil and gas production across North America, and raises the possibility, impossible to foresee a decade ago, of a stable and self-sufficient regional energy market.

President Peña Nieto’s energetic leadership is promising for U.S.-Mexico relations. He is benefiting from openings in Mexico’s political system and building on the legacy of the North American Free Trade Agreement, which has gone far beyond trade. NAFTA played a central role in encouraging Mexico to look outward and connect with its neighbors and the world, much as it encouraged the United States to look south.

As Mexico has gone from being one of the world’s most closed economies to one of the most open, its middle class has grown and helped make the country the second largest importer of U.S. goods. Over the last two decades, annual trade between the United States and Mexico has grown six-fold, from $81 billion to more than $500 billion. And expanding commerce has helped improve the image of the United States: In a recent poll, nearly three-quarters of Mexicans under 30 said they had a favorable view of the United States.

On the U.S. side, the long overdue prospects for immigration reform finally seem to be sparking to life. This is an economic, social and (for Democrats and Republicans alike) political imperative. Some 33 million people of Mexican descent live in the United States — more than 80 percent of them legally — and are already a vital part of our national identity.

Of course, fixing immigration is just one of the challenges. Violence by organized criminals in Mexico, much of it linked to sales of illegal drugs in the United States, remains a grim reality. The State Department warns Americans about travel in nearly two-thirds of Mexico’s states. And misunderstandings are bound to surface as in any complex relationship.

The next chapter of the U.S.-Mexico relationship should focus on deepening not only security and trust, but also economic integration. Vice President Biden made a good start when he launched a high-level economic task force last fall.

This week, Commerce Secretary Penny Pritzker will lead her first trade mission to Mexico. And President Obama will also carry that message when he arrives in Mexico later in the month.

In a single generation, the United States and Mexico have gone from distant neighbors to natural partners. The next steps now await, and we should take them together.

Thomas F. “Mack” McLarty was White House chief of staff and Special Envoy for the Americas under President Bill Clinton. He currently serves as chairman of McLarty Associates and McLarty Companies.

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