Financial Times (London)
August 31, 2000
Fox's Vision Deserves a Second Look
Comment & Analysis: Thomas Niles applauds the Mexican president-elect's proposals for deepening relations with the US and Canada
By Thomas Niles
Vicente Fox, Mexico's president-elect, was greeted warmly last week in the US, where he met Bill Clinton and the leading presidential candidates. Yet to judge by Washington's cool official reaction to his plans for deepening the North American Free Trade Agreement, one would think Mr Fox had suggested some truly revolutionary and immediate changes.
In fact, they are neither. Given the importance of the US relationship with Mexico, Americans should be grateful that Mr Fox has clearly thought about the future and has established the agenda for his contacts with the next president of the US and, one hopes, with the prime minister of Canada. Realistically, Mr Fox was careful to characterise his ideas as a set of long-term goals, to be achieved after an ambitious programme of political and economic reforms in Mexico. Asa result, the proposals deserve to be taken seriously. Because the US has important strategic - in addition to economic - interests in securing a more stable southern border, Mr Fox's proposals make a great deal of sense, although the politics of achieving them will not be easy.
Ideally, the US-Mexico relationship should mirror that between the US and its leading trading partner, Canada: friendly and prosperous neighbours sharing a peaceful and lightly guarded border, trading with each other on equal terms, with largely free movement across the frontier. Clearly, a lot has to happen in Mexico before this can be the case.
It would appear that Mr Fox is proposing to address many of the most important impediments to a more balanced relationship. He made clear that his top priority would be to restore integrity to public life, root out official corruption and restore the rule of law. Furthermore, he said he would seek sustained economic growth - currently about 7 per cent - while ensuring a more equitable distribution of its benefits. In addition, Mr Fox promised a stepped-up effort against the drugs trade - always a hot issue in the US-Mexico relationship.
All of these ideas were welcomed in Washington. But Mr Fox's proposal to increase the number of legal immigrants in exchange for better border enforcement on the Mexican side, coupled with his longer-term vision of a North America without impediments to the movement of labour, were not warmly received. Even in this area, however, his proposals are really rather modest, given the time-frame of 25 years that he suggested.
For his part, Mr Fox has pledged to bring inflation, interest rates and budget deficits down to levels in line with the US and Canada within a decade. He also told those he met in Washington that he intends to invest heavily in education and infrastructure, and to create a climate where entrepreneurship can thrive.
Americans and Canadians should be able to identify with those objectives. If Washington and Ottawa were to commit funds to help Mexico develop its economy and public infrastructure, there would be many new opportunities in the process for US and Canadian companies. And Mexico, with its wide-ranging web of free-trade agreements with Europe and Latin America in addition to Nafta, provides US and Canadian companies with an ideal platform from which to benefit from greater liberalisation and economic growth.
My experience as US ambassador to Canada, the European Union and Greece leads me to give credence to Mr Fox's vision, especially given the long time-frame that he has proposed to realise his ideas. One need only consider the case of Spain, which 25 years ago was just beginning to emerge from Franco's shadow, with living standards lagging as far behind France and Germany as Mexico lags behind the US today. Spain has successfully made the transition to full democracy and, thanks in part to the dispensing of significant EU structural funds, has become a leading regional economic power.
Or think of Greece, where I witnessed first-hand the progress created through injection of EU funds for infrastructure investment - and the resulting opportunities for European companies. Or Ireland, whose per capita gross domestic product now surpasses that of the UK.
None of these economic success stories happened in a vacuum. In each case, associated countries created special institutions and programmes to inject capital and targeted assistance in order to right what had been a shaky economy fraught with often turbulent politics. The end result has been a stabilising of regional relationships and an overall levelling of migration between formerly unequal neighbours.
Europe's experience demonstrates that income differentials need only be reduced - not eliminated altogether - to result in a radical decline in emigration pressures, provided job opportunities in the poorer countries continue to grow. That is just the outcome that Americans should wish for their southern neighbour.
The writer is president of the United States Council for International Business, an industry trade group.
Copyright 2000 The Financial Times Limited
