Mexico

Neighbors. Everyone has them, and the kind you have can make a big difference in your life. They can be frustrating or they can be a godsend, it all depends.  

Countries are in the same situation. Good neighbors can mean beneficial security and trade agreements. Bad neighbors can mean border crises, conflict over resources, and even war.  

Today we are looking at one of our neighbors - Mexico. By most measures they’re a good neighbor - it’s been a very long time since there was any military conflict between our two nations, and Mexico is arguably the United States’ most important trade partner. This closeness has allowed the U.S. to rely on peace in its own neighborhood, and to focus on other issues abroad. Still, a lot remains misunderstood about Mexico in the United States, particularly when it comes to hot button issues like trade, immigration and drug trafficking. 

I'm Gabrielle Sierra, and this is Why It Matters. Today, Mexico. 

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Gabrielle SIERRA: So let's do a little Mexico 101. If I know nothing about Mexico, what are some things that I should know? 

Shannon O'NEIL: So Mexico is our Southern neighbor. We share a 2,000 mile border with the country. It's a country of about 120 million people. It is a democracy though recently has been struggling as such. 

This is Shannon O'Neil, she’s a senior fellow for Latin America studies at the Council on Foreign Relations.

O'NEIL: When you look around the world, there's probably no country that affects more what happens day to day in the United States than Mexico. So the vegetables and fruits that are on your table that you eat every morning or every evening, the appliances that you buy, the other goods that you purchase that you fill your houses with, the communities in which you live and the restaurants that are down the street perhaps and the broader culture, all of those things as well as today some 11 million Mexicans and 35 million Mexican Americans who are a big part of the US population. So the communities that so many of us exist in and around too, are also tied to Mexico. It is our most important trading partner, ahead of Canada and ahead of China. It is important in terms of our shared environment along the border, in terms of our industries as well as our waterways. And it is important in terms of security, in terms of border security, but in terms of security overall and the joint fight against organized crime. 

Each of the connections Shannon just mentioned are at times headline issues in the United States. But among them, the economic relationship may be the most important, and least understood. In 2019, more than $677 billion dollars in trade was conducted between Mexico and the United States, affecting 5 million jobs. Again, that’s higher than overall trade with China in the same year. And underneath the big numbers, the ties go deeper.

O'NEIL: And so today interestingly, when you look at products in the United States, Mexico and Canada are integral to the making of those products and these countries are big buyers of US goods and services when they make products. So for instance, a product that comes in from Mexico, so it was imported into the United States from Mexico, on average, about 40% of that product was actually made in the United States. So US workers put things together that are then sent to Mexico to be assembled. If you look at products coming in from China, it's less than 4% that was made in the United States. So pretty much everything is made on the other side of the ocean. So Mexico and the United States are incredibly important to each other because they make things together.

But this level of cooperation hasn’t always been the case. And it’s not something that should be taken for granted. 

Shannon O'NEIL: So Mexico, if you look back in the 1980s, it was really a country that sold commodities north to the United States, primarily oil and some agricultural products, and it was a quite closed economy. So it had a lot of tariffs and other kinds of barriers that kept the US from selling goods to the south. The big shift really happened in the early 1990s with the formation and signing of NAFTA, the North American Free Trade Agreement that brought Mexico, the United States, and Canada together in a free trade region. And you see in the wake of NAFTA over the next decade, trade grow exponentially between the countries, and over these last 25, 30 years, the nature of that trade, not only has it grown fourfold, but it has also changed. So it's gone from commodities, from selling oil, from selling fruits and vegetables and like which still are sold, but to advanced manufacturing products. So auto parts and medical devices and airplanes and all kinds of other types of equipment and higher tech goods are now sold between all of these countries.

SIERRA: How did life in Mexico change for people after the country embraced free trade? And what has that meant for the United States?

Mariana CAMPERO: I mean, let me just give you an anecdote. 

This is Mariana Campero, she’s an expert in the Americas program at CSIS. She is also the host of the Mexico Matters podcast. And former CEO of the Mexican Council on Foreign Relations, COMEXI.

CAMPERO: When I was a little girl, I remember my trips to the United States as one of the most incredible things in the world, because I was able to buy US candy. My mother bought US toothpaste and shampoos. It sounds trivial, but in Mexico, we did not have, in our shelves, US  products, or very little of them. And those that existed in Mexico were very expensive. So one of the things that NAFTA, when it came into effect, it radically changed the life of Mexican consumers, because suddenly we were able to have every product from every part of the world, and with the best quality at cheaper prices. Sort of more importantly, because of NAFTA, Mexico, especially the Northern part of Mexico which was closer to the United States, and so therefore transport costs were lower, was able to develop, and it became a true manufacturing powerhouse. The Mexican economy was able to grow its Northern parts at rates that were close to Asian countries. Some parts of the Northern grew at 10%. That also allowed for a lot of the people in the south to move north to work in these maquiladoras or manufacturing facilities.

NAFTA eliminated taxes on imported and exported goods, as long as they met certain manufacturing requirements, allowing products, parts, and services to be traded essentially for free. As a result, prices went down, and choices became more abundant. This benefited businesses, shareholders, and consumers, and many economists would say that on net NAFTA was a good thing.

But not everyone shares this opinion. NAFTA was controversial from the moment it was signed, and over the years, many politicians, and many workers, have blamed NAFTA for US job losses.  

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Bill CLINTON: In a few moments I will sign the North American Free Trade Act into law, NAFTA will tear down trade barriers between our three nations.

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Ross PEROT: When you’ve not a 7:1 wage differential between the U.S. and Mexico you will hear the giant sucking sound.

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Donald TRUMP: NAFTA is the worst trade deal maybe ever signed anywhere, but certainly ever signed in this country. 

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Bernie SANDERS: Corporate America and the big money interests have told us that NAFTA is a good deal, I don’t believe them.

SIERRA: So in some political circles, I feel like NAFTA was also seen as something that cost American jobs. Is that the case?

O'NEIL: Well, it's interesting. When you look at the decade after NAFTA was signed, sort of the 1990s, jobs in all three countries increased and the sales between all three countries increased. And in fact, Mexico was one of the biggest consumer markets for US goods. Around 2001, that starts to change. And one of the big changes is that China comes into the WTO and you see more and more goods coming from China to the rest of the world. So that, you know, we talk about here in the United States, the China shock and the effect that China had on US goods and sales and US jobs. Well, they'd had a similar effect and perhaps even a bigger effect on jobs in Mexico. So whole industries that were based in Mexico, textiles and toy making and shoe making, so much of that disappeared. And as it disappeared, so did US-based suppliers that used to sell the leather for shoes or the high heels or the sorts of things down there. So you see this symbiotic relationship. So that first decade when China really wasn't part of the picture, you saw jobs increase throughout the three countries. Over the 2000s and into the 2010s, you saw jobs fall in all three countries, but in part because of challenges and competition from other parts of the world.

SIERRA: So is NAFTA still in place?

O'NEIL: So NAFTA was in place until just about a year or plus ago when it was replaced with the USMCA, the US, Mexico, and Canada Agreement. So this is basically a NAFTA update. It kept some of the things in the initial agreement. It added things that hadn't really been thought about in 1992, in 1993 when the initial agreement was negotiated. So things like the internet and e-commerce, digital trade and the like, digital information and how you store it, or the privacy rights. So all of those are new, bigger aspects of the USMCA that weren't all there in the original NAFTA.

SIERRA: All right, so I have to train myself to use a new acronym.

O'NEIL: I know. All the time.

SIERRA: All the time.

There’s a reason that NAFTA, and the USMCA, have gotten so much attention in the news and in election cycles. Jobs mean a lot to voters. And because feelings about them run so deep, politicians on both sides of the aisle have often taken up these trade agreements as campaign issues. It’s a clear example of how our relationship with Mexico shows up at the center of national debates.

There’s another big issue that shows up in the same way, one that is often just as misunderstood. Immigration.  This year, the number of undocumented migrants at the southern border hit the highest level in over 20 years. Migrants came from around the world as COVID and its economic consequences drove ever higher numbers of people from their homes.

SIERRA: Let's turn to the issue that we hear about most often, especially over these past politically tense years here in the US, immigration. So what have some of the most important inflection points been as this issue has played out over the years?

O'NEIL: So for many years, Mexico was the biggest source of migrants to the United States. And you saw an uptick start in 1970s and 1980s, continue in the 1990s and hit a real high in the early 2000s where Mexicans were coming to the United States for a whole host of reasons. There had been economic booms and busts that drove people north. There was a demographic boom. So lots of Mexicans were turning 16, 17, 18 every year and didn't really have anywhere to go in terms of their own labor market. And you also saw throughout the 1990s, Mexico struggling to democratize, to move from an authoritarian system to a democratic system and many people and families were pushed out by the authoritarian government before that. So there's lots of reasons that were pushing Mexicans to come to the United States. You have seen over the last 10 to almost 15 years a decline in Mexican migration to the United States. And here again, there are lots of reasons. So part of it is the economy has been doing better there. You haven't seen the wild swings in the past that would lead people to search for opportunities in different places. You've seen a more stable political system and a democracy. So many people feel their voices are heard now when they had not been in the past. And crucially, you also see changing numbers of people who turn 15, 16, 17 every year and are trying to enter into the labor market. So compared to 2000, they're anywhere between 100,000 and 200,000 fewer people turning 18 every year that are even looking for a job. So there's more space in the labor market in Mexico than in the past. 

CAMPERO: In the last few years, you know, just before the pandemic and before this administration, Mexican migration to the U.S. was almost net zero. That means that the flows of people coming into the United States were more or less equal to the people coming back to Mexico, because there were job opportunities that were created in Mexico on a yearly basis. 

That’s right Mexico is close to “net zero” in terms of immigration to the United States. Though that fact is often lost in media coverage and political debate. 

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Al Jazeera: The U.N. has urged the Trump administration to immediately stop separating migrant children from their families at its border with Mexico. 

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Donald TRUMP: When Mexico sends its people they’re not sending their best.

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ABC News: More than 172,00 migrants were stopped at the border last month, the most in 20 years. 

O'NEIL: So the migration today that we're talking a lot about in the United States and have been for the last number of years is not about Mexican migration as much, but it's about migration from other places that comes through Mexico. So since 2014, 2015, we have seen waves of Central Americans coming up through Mexico to come to the United States. And we've obviously seen it just this last year in 2021, increases from Central America driven by violence and poverty and bad governance and corruption and all sorts of factors. Many Central Americans are leaving and looking for life elsewhere and many pulled to the United States.

CAMPERO: The biggest spike that we saw in the Northern border was migrants from Central America, particularly from the Northern triangle. What we're seeing recently is that Mexico is not only an export country, it became a transit country, and now it is becoming a receiving country. So now Mexico also has its own problem to deal with when the fact is that a lot of the people that were not able to stay in the United States or to cross the border into the United States, want to stay in Mexico. And they have asked for asylum in Mexico, and this has put tremendous pressure into our own communities, into our own governmental authorities that are trying to cope with thousands and thousands of people. So Mexico has a huge problem to deal with and we don't have not even close to the resources, nor the capabilities, to really deal with this issue in a humane or in a professional manner.

O'NEIL: So recently we've seen lots of Haitians, tens of thousands of Haitians coming, but we see people coming through Mexico from all different parts of the world, sometimes as far as Asia or as Africa, but coming to Mexico and then coming up to the US border seeking asylum or seeking to come in through other or means to try to find their way in the United States. So Mexico has become a gateway for migration to the United States. And so there's two things here. One is that is a tension, as we've seen in the United States both in the US trying to regulate the migration that comes into the United States. The other challenge is Mexico is absorbing tens of thousands, indeed more than that, of these migrants into Mexico. So they get, especially Central Americans get part way into Mexico and then they end up staying there as do Haitians as do others. So this is a nation that is a middle income country, has its own challenges with poverty and job creation and the like and they are absorbing now many migrants as well.

SIERRA: So then are the US and Mexico working together on immigration?

O'NEIL: The US and Mexico have been working together on immigration largely over the last few years to close or limit the movement of people into the United States across the US-Mexico border. We have seen over the last nine or 10 months under the Biden administration, some changes in those rules and the setting up and expanding of the immigration system at the border to process people in quicker and more comprehensive ways. So you're starting to see more families particularly and mothers and others with kids come through and be processed and brought into the United States. So there is cooperation on managing the system at the border. But I will say this has been one of the most difficult parts of the relationship because it is hard to do, to know what to do, and to build capacity to manage tens of thousands, hundreds of thousands of people that are flowing through. And one of the bigger challenges too is that Mexico just doesn't have the capacity to do that. 

How we build this capacity is an ongoing political debate. Many ideas have been floated, like increasing funds for child welfare professionals, translators, and medical staff at border facilities, and initiating community housing programs to limit the use of detention centers. Many of these ideas might be effective, but big change is a hard sell on both sides of the border.

One important step is recognizing that it’s a shared problem. The migrants seeking asylum have escaped persecution and violence in their home countries, and in order to get to the U.S., they need to cross through Mexico. As a result, Mexico has had to shoulder significant burdens of its own due to the migrant crisis, and is scrambling to find a solution, just as the US is.

Misunderstanding about shared problems emerges as a theme over and over again in US-Mexico relations. And that is certainly the case when it comes to another issue that has persisted for decades: drug-trafficking and gang violence.

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Al Jazeera: More than 300,000 people have been killed in Mexico since the start of the US-led war on drugs in 2006. And today, Mexico continues to make headlines as one of the most dangerous countries in Latin America.

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CBS Mornings: Officials along the southern border say Mexican drug cartels are moving much larger shipments of drugs into the US. The amount of fentanyl, an especially dangerous substance, that was confiscated by the Texas Department of Public Safety jumped 800% in just one year.

O'NEIL: Security is a huge issue in the US-Mexico relations and it goes both ways. Mexico has since the late '80s through the '90s become one of the biggest sources of drugs that are imported into the United States, starting with marijuana and cocaine, and then moving into 2010s to meth, and then today, much of the fentanyl that comes into the United States, it's from abroad comes through Mexico. The precursors come from China mostly, but they come through Mexico. So it is a huge source of illegal drugs that come into the United States. On the other side, the United States ships back lots of money that pays for those drugs, as well as guns that go to Mexico that many of these cartels and organized crime buy. So there's a illegal trade happening in both directions, both of them problematic and harmful to the two societies on either side. And what we see, obviously we have huge costs here in the United States due to illegal drugs and particularly in recent years, the rise of fentanyl. We saw 70,000 Americans die last year from fentanyl and opioid overdoses. You know, in Mexico, we saw a record high homicides last year as well and largely tied to organized crime and just the violence that's associated with illegal activities, drug trafficking being one of them, contraband being others, human trafficking and migrants, as well as other types of illegal activities, especially extortion and others on the ground. So insecurity on both sides of the border feed into each other and make both countries less safe.

It’s a tragic feedback loop, and the United States contributes to it in complicated ways. For example, it’s estimated that half a million guns are smuggled from the U.S. to Mexico each year. The problem is so severe that the Mexican government has filed a lawsuit against several US gun companies, alleging that they knowingly supply the criminal gun market.

CAMPERO: The fact that the United States has not been able or to curb the sale of arms to the Mexican cartels has become an irritant. From a Mexican point of view, I don't think we have fully recognized our own fault and our lack of rule of law that obviously has allowed the Mexican cartels to grow and be all-powerful, and they are even a threat to the state.

In 2020, there were 34,515 homicides in Mexico, a per capita rate several times higher than in the United States. In the most recent midterm election 89 politicians, including 35 candidates, were killed. And that’s not all, according to Mexico’s National Search Commission, there are nearly 100,000 unresolved cases of missing people in the country, a problem that goes back decades. 

SIERRA: It's difficult for me to imagine a reality in which organized crime has so much power, a world where it might be a relatively common experience to have a friend or a loved one disappear and to suspect or know that it likely involved a cartel.

CAMPERO: Yeah. I think it's a horrible reality, and in Mexico, it is a reality that a lot of people have lived. I mean, you probably remember the case a few years ago in which a students just disappeared and they they have not been found. So their bodies were burned or what happened to their bodies, it's really unclear yet. There has not been a full investigation as to what happened to those students. But it is the reality of a lot of mothers in Mexico have taken upon themselves to go out and find their own loved ones, and they have found mass graves, in which they have sort of done the work to identify what are the remains of their own family members. It is a reality, unfortunately, for a lot of people in a lot of Mexican communities.

SIERRA: Do we see the US and Mexico cooperating on security problems?

O'NEIL: The US and Mexico have had moments of close cooperation on this. And in fact, in 2007, 2008, we saw a whole new initiative called the Mérida Initiative which was signed between at the time President Calderone in Mexico and Bush here in the United States that really opened up security cooperation in ways that hadn't been there for many years. That has in more recent years fallen somewhat by the wayside. And in fact, the current president, López Obrador, and his foreign minister have said that it's not working and they want to renegotiate it all. And you see frustration in the US Capitol on the Congress as well as the executive branch in security cooperation attenuating or sort of dissipating in recent years. So I think this is a real challenge for the two countries because it is so tied. You can't fix the problem in one place without also addressing it in the other. So the security cooperation, there have been strong moments in the bilateral relationship and in the history, but today isn't one of them.

Trade, migration, drugs and security.  These are complex challenges that hit deep political nerves in both Mexico and the United States. And their persistence through the years raises questions about how leaders on both sides of the wall are handling the relationship.  

SIERRA: Can you tell me a little bit about Mexico's current president known to the world as AMLO?

O'NEIL: Yes. So his full name is Andrés Manuel López Obrador, but everybody calls him AMLO because you couldn't say that every day. He has been running for president or he had been running for president for many, many years. He lost two elections. Then he finally won on the third time, which was in 2018. He is seen as outside of the normal political elites. He talks with a bit of a different accent. He speaks much more slowly than people from Mexico City, and he positions himself as being outside of those circles of fancy people or what he calls them fifis. So sort of those who are elite and have traveled and speak English and do other kinds of things. He sees that as not his base. That he is tied to the more average Mexican and the issues that they deal with. So he paints himself really as a populist, as an outsider, and came in with a really sweeping majority So that was the wave that brought him into power a few years ago.

SIERRA: Seems like there's a “but” coming here.

O'NEIL: There is a but coming. And so while he came in and he said he was going to tackle crime and he was going to tackle corruption, which were the two things Mexicans most wanted change on, he has not. And in fact, he if anything is going in the opposite direction. So under his watch, we have seen homicides and crimes increase, not decrease as he has shaken up the overall security situation not funded or underfunded state level and local level police officers in favor of the military and things like that. So he hasn't fixed the security problem or started to diminish the violence and the real challenges that people face day to day in their life. And he also came in riding this anti-corruption crusade that he would stop the backroom deals and the stealing that unfortunately did happen in the Mexican government and throughout very parts of society and the like, and unfortunately that has not happened either. And there have been some videos of his family members taking bribes in various cases in cafeterias and the like and wondering where that money goes. So there's a feeling there that things really haven't changed.

SIERRA: What is the Biden-AMLO relationship like? Do they get along?

O'NEIL: Well, interestingly, Trump and AMLO got along very well. I think for two reasons. One is they have somewhat similar temperaments. They are believe very strongly, very self-assured in their own ability to do things, they see themselves as messiahs or leaders in many ways, but the other real reason is that Trump didn't ask very much of AMLO. All he asked is that he stopped migration to the border. But all the other things AMLO was doing in Mexico, the various economic changes or political changes or AMLO's attacking of the press and these things, Trump didn't care very much about at all. In fact, didn't care about. Even security issues, he really didn't press. And so I think it was an easy relationship for AMLO.

So fast forward to Biden, the Biden administration is much broader. You see them, yes, of course they care about migration and we see that as continuing, but they care about security issues, they care about economic issues, they care about labor issues, they care about democratic checks-and-balances, human rights, these sorts of things and that interest of the United States and what's happening inside Mexico in the domestic agenda I think is quite uncomfortable for AMLO and he's let that be known.

So I think there is a real challenge in Mexico today as he has a very strong agenda where he wants to roll back energy reforms and bring the energy sector back to the Mexican government, the control of the Mexican government. He wants to kick out foreign investors and others that have been there, particularly in this sector. He wants to limit the role of political opposition and political opponents and the like. So there has been already a democratic backsliding within the country.

It’s unclear where that democratic backsliding is headed, but like so much else with Mexico, it’s worth keeping an eye on. Because walls aside, what happens in Mexico will continue to affect life in the United States, every day. 

O'NEIL: One of the most important reasons to root for a stable Mexico is that they are at our border. So if Mexico does well, the United States will do well. If Mexico is doing poorly, then it will be a huge problem for the United States. And Mexico through the last several decades has been with all of its ups and downs, a pretty stable and safe and good neighbor to the United States. We have a neighbor that does not have terrorism, we have a neighbor that has a quite stable economy, we have a neighbor that, yes, has sent us migrants, but those have enriched very much our economy and many of them have then headed back and gone back to Mexico. And we have a neighbor who for the last 25 plus years has been a democracy. And I think all of those things, stability, the shared values, and the economic ties that have developed between the two countries have made the United States safer, have made the border more stable, and have actually made the United States more competitive. So the flip side of that is if you did not have a democratic Mexico, if you did not have a stable Mexico, if you saw organized crime and others grow to the point where they controlled the territory, those would pose huge problems for the United States, both the cities along the border and the states along the border, but for the overall economy given how linked we are economically, societally, culturally, and the like.

For resources used in this episode and more information, visit CFR.org/whyitmatters and take a look at the show notes.

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Why It Matters is a production of the Council on Foreign Relations. The show is created and produced by Asher Ross, Jeremy Sherlick, and me, Gabrielle Sierra. Our sound designer is Markus Zakaria. Rafaela Siewert is our associate podcast producer. Our intern is Natalia Lopez.

Robert McMahon is our Managing Editor, and Doug Halsey is our Chief Digital Officer. Extra help for this episode was provided by Claire Felter and Diana Roy. 

Original music is composed by Ceiri Torjussen. Special thanks go to Richard Haass and Jeff Reinke. 

For Why It Matters, this is Gabrielle Sierra signing off. See you soon!