The official theme of President Obama’s trip to Mexico centers on economics. In a press conference earlier this week the president said,
A lot of the focus is going to be on economics. We’ve spent so much time on security issues between the United States and Mexico that sometimes I think we forget this is a massive trading partner responsible for huge amounts of commerce and huge numbers of jobs on both sides of the border. We want to see how we can deepen that, how we can improve that and maintain that economic dialogue over a long period of time.
The issue of economic integration and bilateral trade should indeed be an important topic. After all, both countries share a two-thousand mile border and Mexico is the United State’s third largest trading partner, while the United States is Mexico’s number one trading partner.
There is also the economic issue of the movement of people, or immigration. Mexicans make up the largest group of immigrants (both legal and illegal) in the United States. The Pew Hispanic Center estimates that over 11 million Mexican immigrants currently reside in the United States. And beyond demographic impact there is the economic impact of immigration for both countries, but especially for Mexico where immigrant remittances represent the largest source of direct foreign investment.
However, there can’t be a fruitful dialogue on either free trade or immigration until the issue of drugs is addressed. The scope of Mexico’s drug war is so large and so encompassing that not starting there renders all other discussions irrelevant.
In the last six years, Mexico’s drug-related violence has claimed over 40,000 lives. To put that into perspective, the number of U.S. casualties in Iraq and Afghanistan have totaled seven thousand.
Mexico’s political infrastructure has also been a principal victim of the drug war. When former Mexican President Felipe Calderón initiated his offensive on the drug cartels he uncovered what many knew but did not want to admit – virtually every level of government had some sort of ties to the drug trade. Put differently, corruption stemming from the drug trade runs rampant in the Mexican government.
Mexico’s level of violence, together with its drug-corrupted infrastructure make any discussion of free trade difficult at best. Investors want to do business in contexts that are stable–both at the level of civil society and political infrastructure. Working to end Mexico’s drug war is a necessary condition for bi-lateral economic growth and trade.
The issue of immigration is also intimately wed to Mexico’s drug war. In the United States one of the strongest points of opposition to immigration reform regards securing the border and stemming spillover violence from Mexico. Border violence tends to be linked to immigration but the violence is in fact a product of the drug trade that has enveloped immigrant trafficking as one of its spin-off businesses.
But perhaps the biggest elephant in the room is the fact that in pure economic terms the U.S.-Mexico drug trade is in itself an important economic issue. It is estimated that the U.S. purchases between $19 and $29 billion annually worth of Mexican drugs. And the Brookings Institute estimates that close to half of the Mexican population works in the informal drug-related industry.
President Obama’s trip to Mexico has the potential to be transformative. But it won’t be. However, I hold out hope that both presidents will begin to address the elephant in the room when the cameras aren’t rolling.
Victoria Defrancesco Soto
Friday, 2 May 2013