Mexico and the United States - On a Collision Course?
In the following article, adapted from an address delivered at the Symposium on Orozco and the Mexican Revolution at Dartmouth College in October, Wayne Cornelius makes a convincing case that US relations with Mexico ought to be at the top of our foreign policy agenda.
By Wayne Cornelius Director of the Center for U.S.-Mexican Studies at the University of California, San Diego
Domestic problems and policy choices in both Mexico and the United States have placed the two countries on a collision course. In the U. S. these policy choices have already produced a shift in public attitudes and official responses to developments in Mexico, from a general posture of "benign neglect" to one of "unilateral protectionism" coupled with a renewed interventionist impulse.
During the past 150 years, U.S.-Mexican relations have been marked by brief interludes of close cooperation (the period of the U. S. Civil War and the French intervention in Mexico; the World War 11 era), within a long-term framework of mutual disdain and conflict. Nevertheless, in the three decades following 1940, there were no serious disputes between Mexico and the United States which could not be resolved - or at least managed - through conventional diplomatic and political mechanisms. This was the era of the so-called "special relationship" between Mexico and the U. S.
All that has changed during the last 15 years. The Mexican economic crises of 1975-76 and 1982-84, coupled with reverses suffered by the U. S. at home and abroad, have significantly raised the level of tension and suspicion in U.S.-Mexican relations.
The health of the entire U. S. financial system now seems threatened by Mexico's insolvency and inability to service its $96 billion foreign debt. Illegal entries by Mexicans seeking work in the U. S. have increased by more than 40%. The apparent end to Mexico's long-running "economic miracle" even after the discovery of massive new oil reserves provoked widespread skepticism in the U. S. about the capacity of Mexico's economy to absorb the current and future generation of Mexican workers into productive employment that offers a viable alternative to employment in the United States.
Combined with these problems, Mexico's defense of revolutionary regimes and movements in Central America has raised doubts among U. S. officials concerning Mexico's political stability and the capacity of Mexican leaders to behave in ways which would not damage vital U. S. economic and security interests.
There will be powerful forces and sentiments on both sides of the border which will resist further fusion of the two countries as an unacceptable encroachment on national cultures, economies and political systems. In this context, the burning issue will be how to prevent major confrontations and punitive policy responses between two systems which are intertwined and interpenetrated to an extraordinary degree, but which mutually resent and reject such interdependence.
These are long-term structural problems deeply rooted in the political economies of Mexico and the United States, as well as the changing realities of the international economy in which both countries must operate. The web of interdependence fashioned through millions of personal, commercial, financial, and cultural exchanges remains intact, and growing; but in the forseeable future such ties will not prevent Mexico and the U. S. from pursuing public policies which are increasingly inconsistent in their objectives and damaging to the interests of significant segments of each society.
The Immigration Question
There is no issue that better illustrates this than illegal immigration.
The U.S. public and most officials see virtually all the benefits accruing to Mexico (which gets a "safety valve" for its surplus population as well as cash remittances from its workers employed in the U. S.) while the costs are borne by disadvantaged U.S.-born workers (whose jobs are taken away by undocumented Mexicans) and by middle-class taxpayers (who must pay for public assistance provided both to displaced citizen workers and, they believe, to undocumented families as well). Mexicans stress the subsidy to U. S. consumers and to federal government programs such as Social Security which is paid by undocumented immigrants.
The truth is that, in both countries, the economic benefits outweigh the costs. The jobs of many thousands of U.S.-born workers in the Southwest and Midwest are being protected by a buffer of small, immigrant-dominated firms. It is the clustering of immigrant workers in the small, lower-tier firms that protects existing, higher-paying, often union jobs. As international competitive pressures increase, many of these upper-tier jobs now held by U.S.-born workers would otherwise be moved off-shore or eliminated altogether through automation.
Moreover, due to the depressed birthrate in the US since the early 1960s, the pool of U.S.-born workers available to fill low-skilled jobs in the US economy will shrink drastically in the last half of the 1980s and the 1990s, while the U. S. economy continues to create large numbers of low-skilled jobs (especially in the service sector).
These important complementarities are virtually absent from the public debate over Mexican immigration.
Instead, the predominance of Mexicans and other Spanish speakers is viewed by most Americans as being the bearers of a language, a culture, and a set of social and political values which are undesirable. Thus, the current wave of immigration is viewed by many people as a direct threat to the dominant culture of the United States. Only when the U.S.-Mexico complementarities in labor demand and supply become more visible can we expect any dimunition of U. S. public concern about Mexican immigration.
Mexico's Economic Crisis and its Aftermath
Oil, which was supposed to be Mexico's ticket to economic independence from the United States - perversely ended up deepening Mexican dependence and increasing Mexican vulnerability to economic problems (e.g., high interest rates exported from the United States.
The de La Madrid government's strategy for economic recovery and future development rests heavily upon the stimulation of manufactured exports. With prices and demand for Mexico's primary product exports (mostly oil, some agricultural products) likely to remain flat or decline in the forseeable future, this is the only way for Mexico to earn enough foreign exchange to service its external debt and finance imports that are essential to industrial growth. But the success of this manufactured export-led recovery strategy will depend upon continued strong growth of the U. S. consumer markets than protectionist forces in the United States have been willing to grant.
Herein lies one of the most vexing conflicts of interest between Mexico and the United States in the 1980s. Fueled by a massive increase in the U. S. trade deficit (an estimated $130 billion for all of 1984, rising to $135 billion in 1985), and the hundreds of thousands of lost U. S. jobs reflected in these statistics, protectionism is on the rise in the United States.
The openness of the U.S. economy to Mexican and other Third World imports will probably decline in the years to come, thereby limiting the expansion of U.S.-Mexico trade which is essential to a renewal of economic growth and job creation in Mexico.
This points up a fundamental dilemma confronting policy-makers in both countries. Most economists contend that future expansion in the U. S. and Mexico will require extensive restructuring of both economies. In the U. S., traditional industries will perish and be replaced by more modern, higher-technology enterprises. On the Mexican side, major technological innovation as well as a gradual withdrawal of government subsidies and tariffs for inefficient industries will be needed to boost productivity and international competitiveness. These structural changes will be painful, resisted by powerful interest groups, and in some cases labor-displacing (at least in the short-term).
Foreign observers have pointed out than an "open economy" may be the price that Mexico may have to pay in order to achieve socially acceptable rates of economic growth and job creation; but the strengthening of the alliance between the Mexican state and foreign capital is certain to generate additional political tensions within Mexico as well as increased friction with the United States.
Mexico's Political Stability
Congressional testimony during 1984 by General Paul Gorman, commander of U. S. military forces in the Central American region, and other statements suggest that at least some elements of the U. S. military and foreign intelligence community share a view that the Mexican political system is little more than a corrupt dictatorship, led by men who are incompetent even to run their own country, let alone take a responsible position on the conflicts in Central America. In late September, 1984, the New York Times reported that the Central Intelligence Agency's senior analyst for Latin America had resigned in protest when CIA Director William Casey insisted that he rewrite a report on the Mexican situation to stress the potential for political destabilization.
The tendency to define "the Mexican stability question" as a U. S. national security problem has been evident since the last two years of the Echeverria administration in Mexico (11975-76), when an economic crisis far less severe than the current one provoked large-scale capital flight and rumors of a military coup. The virtual collapse of the Mexican economy in 1982 and the nationalization of the country's banks by outgoing President Jose Lopez Portillo in September of that year were taken by some observers as proof of a dangerously unstable regime in Mexico, and by others as evidence of a radical policy shift in Mexico toward socialism.
A Crisis in the Development Model
Most members of the U. S. political and economic establishment seem unwilling to engage in such fundamental questioning of the structural inadequacies of Mexico's post-1940 development model. Instead, the Mexicans fear, the U. S. will be tempted to take advantage of this situation to turn Mexico into a virtual ward of the U. S., denying the need for structural changes to correct imbalances in the Mexican economy and society, and rejecting the legitimacy and domestic political importance of a Mexican foreign policy that is independent of Washington.
Business-as-usual in Mexico during this period will not be socially tolerable nor politically sustainable, regardless of the political management skills of the Mexican incumbents. If serious conflict in U. S. relations with Mexico is to be averted, major policy departures from the status quo in Mexico must become politically acceptable in the United States.