What Does Donald Trump Need

To Understand About Mexico?

Donald Trump has made Mexico-bashing a major part of his

public discourse. Trump still brags about the thousands of people

who attended his campaign rallies and gleefully shouted,

"Mexico!" when asked who would pay for a new border wall.

During his final few days before taking office President-elect

Trump repeatedly boasted about his efforts to discourage

investment in Mexico and has singled out Ford, Toyota, GM, and

BMW for criticism. Trump seems to be convinced that he can

take an aggressive stance in his negotiations with Mexico and

squeeze out some extra value for the U.S. Unfortunately,

however, Trump also demonstrates a frightening lack of

understanding about the complexities of modern manufacturing

and Mexico's internal politics. His continued insistence that

Mexico will pay for his border wall chafes with Mexican voters

and may impact Mexico's upcoming presidential election in

2018. Trump has yet to define a clear policy agenda in regards

to Mexico. As he and his team prepare their plans for next four

years, I reached out to Eric Farnsworth, the vice president of the

America's Society, a Latin America-focused think-tank, to ask

about what factors Trump should take into consideration as he

designs his Mexico strategy.

Nathaniel Parish Flannery: Mexico has played a big role in

Trump's discourse so far. In terms of the U.S.-Mexico economic

relationship, what's at stake as Trump starts his negotiations?

Eric Farnsworth: What’s at stake is the global competitiveness of

the U.S. economy. The relationship with Mexico is deep, broad,

and multi-faceted. Mexico is our second largest export market

and third largest trading partner after Canada and China. No

longer do we simply trade together, now we design and make

products together, including services. The relationship has grown

and evolved dramatically since the days before NAFTA. In fact,

according to the NBER some 40% of Mexican production is U.S.

content; for Canada the equivalent number is 25%, for China,

four. Production is truly a shared enterprise, and when Mexico

does well, so does the United States and vice versa. We don’t

make stuff and send it to them and they don’t make stuff and

send it to us. It is a co-production model based on the mutual

benefits including comparative advantages and production

efficiencies that we both bring to the table. Unfortunately, the

impression has developed from both the left and the right that

the primary indicator of economic well-being is the U.S. trade

balance. But the trade balance is a one dimensional statistic; it

does not illustrate the significant surplus that the United States

routinely runs with Mexico in services or take into account the

critically-important investment side of the economic relationship.

The United States now threatens to misdiagnose the problem,

and may therefore be inclined to prescribe a course of action

that actually makes matters worse. Mexico is not, in fact, the

cause of U.S. economic sluggishness; it is a critical partner in

helping the United States compete effectively with China and

other emerging economies. If the United States takes steps now

to dismantle or complicate the relationship, not only will our

economy and the jobs that depend on trade with Mexico suffer

concretely, but we will also show our closest trade and

investment partners that the United States is no longer a reliable

long-term partner. This is already causing them to seek diversity

in trade and investment relations, namely by building further

linkages with Beijing. As well, we need to remember that Mexico

has its own politics; with the next presidential elections scheduled

for 2018, perceptions that the United States is no longer a willing

partner will surely amplify the political attractiveness of populist,

nationalist candidates who have little interest in building relations

with the United States. This would be a setback of historic

proportions.

Parish Flannery: Trump has made the issue of immigration into a

major focal point. But, trends in migration in Mexico have

evolved greatly over the past few years. What does Trump need

to take into consideration as he works to shape his discourse with

Mexico on the topic?

Farnsworth: Net migration to the United States from Mexico is

now essentially zero, and has been for some time. This represents

both a reduced attractiveness to potential migrants of the U.S.

economy and social environment while also indicating the

greater attractiveness of the Mexican economy for its

nationals. There is no massive flow of Mexican migrants across

the southern U.S. border that a new, almost 2000-mile wall would

ameliorate. To the extent migration is a problem that must be

addressed, the primary surge of migrants in the past several

years has come from Central Americans desperate to leave the

violent circumstances and dead-end economic prospects that

many face in their home countries. In order to address these

issues effectively the United States actually needs Mexico’s

cooperation to reduce the throughput of migrants from Central

America as well as to assist with repatriation as appropriate. (The

gathering storm of Cubans stuck in Mexico intending to migrate

to the United States and now prevented from doing so by the

change in U.S. policy is a perfect example.) And, in order to

address the issues longer term, so that Central Americans prefer

to stay at home and work for better circumstances there, the

United States and Mexico clearly have consistent

interests. Cooperation to achieve improved results, however, will

be much less forthcoming if relations between Washington and

Mexico City become frosty.

Parish Flannery: The issue of security plays a big role in U.S.-

Mexico relations. Will Trump's hardball tactics undermine

Mexico's cooperation on U.S.-led anti-drug and anti-terrorism

initiatives?

Farnsworth: Security cooperation with Mexico can never be

taken for granted. The history, politics, and sovereignty issues are

too significant and never far from the surface. In recent years,

both countries have managed to put aside the natural

suspicions that have haunted the relationship at least since the

1840s, and have found meaningful, pragmatic ways to

collaborate on critically important yet exceedingly difficult

security issues. The process of confidence building has taken

years and endured numerous hiccups, including the traditional

Mexican view that security issues, specifically drug trafficking and

control, are a much greater problem for the United States than

for Mexico and therefore the primary burden remains with

Washington. Due to sustained, bipartisan efforts, the security

relationship—on drugs, terror, and new threats including cyber—

have arguably never been better nor yielded more concrete

results. Even embarrassing episodes such as the prison escape of

Joaquin “El Chapo” Guzman can be turned into positive

examples of security cooperation including re-capture and

extradition from Mexico to the United States. El Chapo was

extradited to the U.S. on January 19. This type of cooperation is

relatively recent. Mexico's willingness to bear the costs of U.S.-led

initiatives is not to be taken for granted. The current Mexican

President, Enrique Pena Nieto, will serve for less than two

additional years and the race to succeed him has already

begun. Pena Nieto and senior Mexican government officials

have given notice publicly in recent days that they will re-

evaluate the relationship with the United States across all aspects

to the extent the Trump Administration pursues actions

inconsistent with a more collaborative bilateral relationship. But

the real test may come in 2018, when Mexicans go to the polls

and will have the opportunity to vote for a new president with a

more strident, anti-American platform seeking to take

advantage of a new strain of nationalism that may already be

emerging across Mexico as a reaction to the aggressive rhetoric

that started during Trump's presidential campaign. It is difficult to

paint a scenario whereby the deterioration of the overall

bilateral relationship would have anything other than a

commensurately negative impact on Washington’s security

agenda. The United States is safer and more secure to the extent

our borders are shared by peaceful, prosperous partners willing

to work with us to address common security concerns. That is

just a fact. Weakening ties with Mexico ultimately weakens the

U.S.

http://www.forbes.com/sites/nathanielparishflannery/2017/01/20/what-

does-donald-trump-need-to-understand-about-mexico/#65190d312a40