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Media Conference Call: Shannon K. O'Neil and Arturo Sarukhan on U.S.-Mexico Relations

Speakers: Arturo Sarukhan, Former Mexican Ambassador to the United States, and Shannon K. O'Neil, Senior Fellow for Latin American Studies, CFR
Presider: Gideon Rose, Editor, Foreign Affairs, and Peter G. Peterson Chair, Foreign Affairs
April 3, 2013
Council on Foreign Relations

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OPERATOR: I would now like to turn today's conference over to Gideon Rose. Mr. Rose, please begin.

GIDEON ROSE: Hi, everybody. Gideon Rose here, the editor of Foreign Affairs. Welcome to another one of our conference calls. We have here two really impressive people today, Arturo Sarukhan and Shannon O'Neil, to discuss the new Mexico, the relations with the United States and the various issues on the bilateral agenda.

Arturo is one of Mexico's most distinguished and accomplished diplomats, most recently coming off a six-year appointment as ambassador to the United States. I first got to know him back when he was a counsel general in New York, and he really is one of the most impressive people in the diplomatic community more generally, not just in Mexico.

Shannon O'Neil, a fellow of the Council -- a senior fellow for Latin American studies, is also the author of the forthcoming book, "Two Nations Indivisible: Mexico, the United States, and the Road Ahead," of which there was a great article in the last issue of Foreign Affairs, "Mexico Makes It." And so they really are -- I can't think of a better pair of experts to guide us through the new -- the new issues.

We're going to start with -- talking with Arturo, and Shannon will join us in a second. So Arturo, you know, there's an article on the front page of the Times today that says, even if immigration reform took place, there wouldn't be a new wave of immigration, because there aren't that many people who want to come, and there are so many new opportunities in Mexico itself that the old bilateral agenda really is not one that we need to worry about, and there are a lot of new issues.

So what are the changes that have taken place in Mexico in recent years, and how have those affected bilateral relations?

ARTURO SARUKHAN: Thank you, Gideon. And it's great to be with you again and have a chat. Look, I think the piece today in the New York Times points to one of the seismic shifts that has been occurring in Mexico for quite some time. Obviously, some of those tectonic shifts aren't as sexy as some of the other news that had been prevalent in the -- in the media in previous years, but they're equally as important and profound.

One of the reasons why the New York Times was stating that, you know, the dynamic of -- the dynamics of transborder flows, migrant flows across the border may have changed have to do, first and foremost, with economic factors -- both the push and the pull factors. With the recession in the United States in 2009, a lot of jobs, especially in construction, which, as many of you know, was one of the biggest magnets for undocumented labor into the United States -- that dried up. Word of mouth is the best communicator of whether jobs are to be had or not. So the -- as the crises hit the U.S. and the global economy, this had an impact on transborder flows of labor.

On the other hand, what has been happening in Mexico -- and this is what I'm referring to sort of as the -- one of the most important changes to occur in Mexico's modern history -- it's through a combination of factors. The changing socio-demographics of Mexico -- birth rates have sharply declined over the past decade. Our birth rate is about 2.2, compared to the U.S.', which is about 2.4. In 10, 15 years, in a generation, Mexico will look a lot, demographically, like what the United States looks like today -- so changing demographics.

Second, responsible macroeconomic policy. Since the last economic crises that Mexico was responsible for -- we weren't responsible for 2009; that was -- that was homemade here -- but since 1994, the tequila crises, Mexico put its macroeconomic situation in order, very strict banking regulations that prevented the Mexican banks from going into subprimes and toxic assets. And that has had a very important impact on the soundness of economic policies in Mexico.

Very aggressive free trade agreements that have ensured that Mexico, along with Chile, has the largest network of free trade agreements on the face of the earth -- free trade and trade and export-led growth in Mexico.

And then finally, the -- what I think is one of the most successful extreme poverty alleviation programs on the face of the earth, a conditional cash transfer program called Oportunidades, which has been in play now for four consecutive administrations in Mexico -- five, actually, with the new one -- which has brought 14 million people plus out of extreme poverty in Mexico.

All of these factors together have had a profound impact on border flows. If to this, you add greater operational security on the U.S. border because of manpower and technology and the fence and to one of the side effects of organized crime expanding its illicit business on the border and going into human smuggling -- all of these factors combined have fundamentally changed those dynamics of border flows. Pew, as most of you know, put out a study saying that Mexican migration to the United States has reached net zero. And I think this is what this piece in the Times was building upon. These are issues which Shannon addresses in her book, and these are issues which will have a profound impact not only on the debate of how immigration reform plays out in this country but of the socio-economic underpinnings of the U.S.-Mexico bilateral relationship.

ROSE: Thank you very much.

Shannon, that's a very rosy picture that Arturo just presented. Do you actually agree with it?

SHANNON O'NEIL: Well, it's interesting, the article today by Damien Cave in The New York Times -- he went to a town called Cargadero, and I actually was there a couple years ago. And immigration -- I do think there are fundamental changes. I agree with what Arturo said. And -- but the other question, the other side of this, is what it means for Mexico.

And that article laid out much of what I saw when I was there, and I do actually talk about it in the book, this visit, is you see these beautiful houses. You see lots of construction, you know, second floors and well-tended and lots of investment going to these towns, but there's nobody there.

And this is really the fundamental challenge, I think, for Mexico. When you look at this really unprecedented wave of immigration over the last 30 years, it has brought money back to Mexico in the form of remittances, which is, you know, second only to oil in some years and up there with tourism in terms of the amount of foreign exchange and dollars that it brings flowing in, but it hasn't necessarily brought development or long-term sustainable development.

So for Mexico, the challenge -- I do think if immigration reform moves forward, things that are -- that are important that will help Mexico -- it will help the bilateral relationship, take out some of the rhetorical and other hostility that sometimes occurs between the two countries over these issues. But the real challenge is how do you get Mexicans to stay, to invest in their own country and to start up the businesses and do the things that many of them end up doing in the United States instead of there?

And so that, as Mexico looks forward and we start thinking about immigration -- how do they entice more of these people -- yes, fewer people are coming because of demographic reasons, because some of the pickup in the economy, but how do you entice more of them to stay and really to invest in their own country?

ROSE: Well, I want to look back a little bit and then look forward. Twenty years ago, there was a lot of controversy over NAFTA, with opponents arguing that it was going to be disastrous for a whole variety of reasons. I -- as I read the evidence from your book and article, Shannon, it seems like it was a big success. Arturo mentioned the importance of free trade agreements, including that presumably. Is -- in effect, is the debate retrospectively about NAFTA really over, with the proponents having won, or am I missing something?

O'NEIL: I would say when you look at NAFTA and what happened, it was a success. You saw, in Mexico, a huge inflow of foreign direct investments. You saw a huge change in the ways things, over the last 20 years, of the way things are made. So you see integration between production between the United States and Mexico now in a way that you had not seen before, and you see actually with a few other trade agreements in the region. You also see a huge benefit -- which is often overlooked -- but a huge benefit for consumers in Mexico and the United States, but particularly in Mexico. And one study that's been done said that the prices of basic goods in Mexico have actually fallen almost by half since NAFTA came into place. So there's been huge successes.

It doesn't mean that there aren't also some costs. And in any sort of an agreement, there are winners and losers. And while I would argue there are many more winners with NAFTA, there were losers, and some of those losers have been rural areas. It's not just because of NAFTA but because of other policies that happened around the same time. But we have seen a movement off of the farms and some being pushed rather than pulled off of the farm.

And then I think the final thing with NAFTA and why it often gets a bad rap on both sides of the border, but particularly on the U.S. side, is when NAFTA was being sold to the American public and in some respect the Mexican public, it was really sold as a panacea for all sorts of problems or all sorts of worries. So whether it was migration or security or economic growth or globalization and how the U.S. would fit into it, NAFTA was sold as the solution to all of this.

And in the end, it really is a trade and investment treaty, and it doesn't actually include many of the things that would actually affect those factors, such as it doesn't include a migration agreement. So NAFTA has been a success. Now 20 years later, it's probably time to think about the next step that we take. But it never was designed to resolve all of the issues on the bilateral agenda, though sometimes it was sold as such.

ROSE: Arturo, what is the impression of NAFTA reputation in Mexico?

SARUKHAN: Well, look, as I think Shannon has stated, there are still people who strongly believe that NAFTA has created losers and that people have been affected, especially, again, as Shannon mentioned, when you look at some of its impact on the rural sector, agriculture in Mexico. Some people sometimes fail to understand that some of those subsistence farmers who've tragically been displaced and lost an ability to tap into the market and make livelihood, sometimes are being displaced by not American or Canadian producers but by high-yield, high-investment, high-technology Mexican companies and producers and investors.

And so it still -- as in the U.S. and as in Canada, there will still be a constituency out there that believes that this has been bad. But I think, on the whole, NAFTA has been a unmitigated success story. As Shannon says, NAFTA's purpose was to enhance and create trade between our countries. It's not a -- it's not an extreme poverty remedy. It is not a social-equalizer tool. NAFTA is a free trade agreement, and as such, it's been widely successful.

Look at our trade numbers. Mexico and the United States, on any given day, are trading more than $1 billion dollars -- with a B -- $1 billion of goods every day go back and forth across the border. That's a stunning number. Twenty-eight states in America today have Mexico as their number-one or number-two trading partner; 6 million jobs in the U.S. directly depend on trade with Mexico. This, I think, is the cornerstone or one of the cornerstones of Mexico's ability to compete and to show the numbers and the muscle tone its economy is showing today.

ROSE: OK. Let's talk about all the downsides of the relationship or the local issues on the border. I mean, we hear -- constantly you read the drumbeat stories about drug violence, about crime, about corruption. It almost seems like -- Shannon, as you would say -- that there are two Mexicos. So what about the downside stories, the crime, the drugs and all the spillover stuff? Is that getting better, worse? What needs to be done and by whom?

O'NEIL: Well, this is, I would say, Mexico's fundamental challenge. When you look at what's happened over the last 20 or 30 years, there's many things that are moving in the right direction. Economically it's moving that way, politically it's moving that way, socially I would say it's moving that way with the rise of middle class.

But what hasn't improved is the security aspect, and that actually has deteriorated significantly. I mean, where are -- where are we today? And that is a question, actually, as this new administration starts out. But it doesn't seem -- it seems like violence has plateaued but really not come down significantly. So this is a challenge for the new administration and for Mexico in general. And so how do you get in control of the violence?

I mean, the long-term solutions -- you look at other examples. You look at the United States, when we had moments in our past, several decades ago. You look at Italy, you look at Colombia. Other places have dealt with organized crime, transnational crime networks.

In the long -- it takes a long time in the long term. It means revamping your police forces. It means fixing your court systems and making it a place where, you know, you can punish the guilty and free the innocent. And Mexico's started moving in that direction, perhaps not quickly enough, perhaps not comprehensively enough, but that is sort of the long-term path.

The question is, for this government, how do you begin addressing it in the short term? How do you really start bringing down these violence levels? And there -- I have to say so far we haven't seen a coherent plan being presented by the new administration. It's continued many of the programs of the Calderon administration, many of which were important to put in place and begin, but we don't yet see what they are going to do over the next five-plus years to try to lessen violence and also how they're going to work with the United States on that.

SARUKHAN: Look, Gideon, there's no doubt that the biggest challenge Mexico faces or one of the biggest challenges that Mexico faces in the near future is how to enhance the rule of law and ensure an empire of liberty. And that's the structural heavy lift that Mexico will have to pull off in the coming years.

Organized crime feeds off of that issue. It is its most egregious expression. But at the end of the day, it's not about whether we agree or we don't agree that people should be able to light up a joint and smoke it. It's not a -- it's not a -- it's not a crusade against drugs or drug trafficking per se. It's at the end of the day, how do you ensure that the rule of law is prevalent?

And this is -- this is a generational challenge. It's going to take time. It's going to take sustained efforts. I -- I'm -- I was fond of saying it as ambassador and I will continue to say it, that whoever thought this fight was going to be over in two, three, four years or even in -- within one administration was probably smoking too much of the stuff that we were seizing in Mexico. This is a generational challenge. There are structural issues which are at play here as Mexico moves from one judicial framework to another.

But this is going to take time. It's going to take -- it's going to take the sustained commitment of the -- certainly the previous Mexican government, this Mexican government, of the U.S. administration, of civil society, of the private sector. We will need to ensure that all these co-stakeholders push back and enhance the ability of the state to improve the rule of law.

ROSE: Arturo, you have over 100,000 Twitter followers, which I find very interesting. Is the information revolution -- how is that changing U.S.-Mexico relations, and how is it actually -- on the side light, you were just ambassador for six years. How is it changing diplomacy?

SARUKHAN: Look, I -- first of all, Mexico, I think along with Brazil, is the second-most -- I think Brazil is number one and Mexico is number two -- the second-most interconnected country south of the U.S. Social media has become a very important tool for the discussion of public policy in Mexico, for mobilization. We've seen it happen several times throughout the past, whether it's an issue related to the elections, whether it's an issue related to crime and public security.

These have become fundamental tools. Policymakers and certainly diplomats ignore these at their -- at their own peril. I do believe that these platforms need to revolutionize the way public policy -- policymaking and foreign policy are executed. I have found it to be a fascinating tool, not only because it allows -- it's fantastic, and -- I don't have to tell all those who are listening in today -- it's a fantastic open-source intelligence gathering locus for information.

In terms of the U.S.-Mexico relationship, I think it's allowing transborder communities to interact, to keep engaged with one another. It has certainly helped to empower the Latino and the Mexican-American community in the United States in many ways. This phenomenon of the dreamers and the push for providing kids that have been brought -- that were brought here to this country as youngsters and who've lived all their life in the United States, providing them with the ability to acquire some form of legal status I don't think would have happened without the use of social media and without the use of the Internet. So it is definitely playing a very important role in the fabric of my nation but certainly, in very critical issues, that impact the day-to-day bilateral relationship between both of our nations.

ROSE: OK. You know, we got a lot of really good people on this call, so let's get them into this discussion. Operator, let's start taking calls from our participants.

OPERATOR: Thank you. At this time we will open the floor for questions. (Gives queuing instructions.)

Our first question come from Jesus Esquivel with Proseco (sic) magazine.

QUESTIONER: Hi. The question is for Arturo. Arturo, in terms of security, in private, you always been saying that you -- if it were in your powers, you will change some things that the Calderon administration (did ?). Now that you are not afraid of the government of Mexico, I suppose, can you tell us exactly why, if you didn't agree with some policies of Calderon, you didn't resign.? My question is basically to you, are you a man of values, or you're a man of interest?

SARUKHAN: Jesus, I've never been afraid of the Mexican government. I have served the Mexican state for 20 years. And I would have nothing else to comment on your question.

QUESTIONER: Why not?

ROSE: Uh --

QUESTIONER: Why not? I mean --

ROSE: I think he's not going to -- I think we need to take -- (chuckles) -- another question on that one.

OPERATOR: Thank you. Our next question comes from Tim Fernholz with Quart V (ph).

Hi, guys. Thanks for taking the time. It's actually Quartz. Just a question about the reform that the new government is proposing, I'm just curious from both people how important particularly the education reforms that are being talked about and the antitrust reforms in the telecom area are to Mexico's future. And do you think that the early (progress ?) is going to be built upon by this government, or is this just a honeymoon period?

O'NEIL: Sure. I'll start off, and then Arturo, why don't you jump in?

I mean, I think both of these are quite important. And what you've seen overall in this first four months of government is a quite cohesive and a quite forceful push on big economic issues. So education was the first up. The antitrust, the telecom and others are now up. We've heard a lot of talk coming soon of energy and then perhaps tax reforms.

On both of these, though, while the beginning looked good, the real question is what will be in the details and what will be the implementation. And Mexico has unfortunately a long history of riding incredibly elegant and high-minded laws but not -- but the implementation often falls fall far short of the initial aspiration.

What I would say, though, with both of these is it's probably interesting that these are the first two out on the block, and in many ways it's because of where Mexico is today and how different it is than it was, say, 15-plus years ago when those -- when the PRI was last time in Los Pinos, in Mexico's White House. And it shows the importance of voters and what they care about.

And two things that you saw -- I mean, obviously, economic matters, security matters -- but things that voters and polls have shown people care about: They care about education, they care about their kids. They're frustrated when they -- when they feel their kids aren't getting a good education, that money's being poured in but the quality may be lagging.

And they also care about these monopolies, and particularly they see every month the cost of their cell phone -- they see how hard it is to get Internet access and how it's much more expensive than their cousin in the United States in terms of getting access in their home. And so I do think some of the reason these two issues -- it's the right thing to do and it's important for Mexico's long-term future. But it's also on the agenda, and they push so hard because of the electoral incentives for all of the parties.

SARUKHAN: I would simply act -- add that Shannon is absolutely right in the sense that the proof in -- the proof of the pudding is going to be in the secondary laws, the regulations that provide for the implementation of these reforms or potential reforms that are in the pipeline. That is where this will have or will not have teeth.

But I think it is increasingly clear to a majority of political actors across the spectrum in Mexico that the statu quo ante is untenable if Mexico is to deliver the promise that it -- that I think it has of becoming a major economic power and of providing enhanced social-economic well-being for all its citizens.

And the -- as the new government starts moving forward with some of these key reforms, I think it will be very important to see how some of these secondary regulations are put in place.

OPERATOR: Thank you. Our next question comes from Alonso Aguilar. And as a reminder, if you would like to ask a question -- (gives queueing instructions).

We now have Alonso Aguilar with Noticieros Televisa.

QUESTIONER: Yeah, this question is for Shannon. I just read your article, "Mexico Makes It," and you're being -- you're being very positive about the path of Mexico in the democratic way, in the economic way, and all the other ways you describe in your article. So, I would like to know your opinion: How do you compare Mexico's situation with Brazil, with Venezuela, Argentina, and all other countries in the south border of the U.S. Is Mexico still the giant of the Latin American region?

O'NEIL: Sure. Let me start talking a bit about Brazil because I think that's probably the most obvious comparison today, or the one that's really being made in the -- in the press and in other circles.

And here, it's interesting but I think both Brazil and Mexico have a lot in common. They both are emerging markets; they face many of the same challenges. They face challenges of infrastructure and how they will expand that and improve that to facilitate trade and economic growth overall. They face challenges in their educational systems which do not always provide the best quality for all levels, particularly different socioeconomic levels.

You know, they also face the challenges of competing with other emerging markets. They're different challenges in many ways, so Brazil for instance, benefits from China's growth or has over the last 10 years, and that's part of the growth that we've seen, while Mexico often competes there. But they face the challenge of how do you become competitive, how do you increase productivity, how do you overall increase GDP growth?

When you look at the differences between the two economies, it doesn't cut just one way where Brazil is favored or Mexico is favored. You know, when you look at infrastructure, Mexico is perhaps a little bit better off than Brazil is when you think about specifically how big Brazil is. When you look at China, Brazil obviously so far has benefited more than Mexico has in other ways.

One thing I would say Mexico -- an advantage it has over Brazil, even though these are costs and benefits and that no one comes out particularly as a winner, one thing Mexico has already done, which Brazil has yet to take on, as does especially Venezuela and Argentina, which you -- which you threw into the mix, is modernize the economy. And I was speaking with someone a couple weeks ago who, in the 1990s, had worked for DESC -- so, one of the big conglomerates in Mexico. And when NAFTA hit, their whole manufacturing side, almost all of it had to be written off because it wasn't globally competitive. It was an industry that had developed with subsidies, with quotas, with high tariff, with the protective walls that were taken down with NAFTA.

And, you know, fast-forward today, DESC has recovered and is doing things, and thousands of other companies have grown up, expanded or been created to take advantage of global markets. And Mexico is now one of the most globally competitive economies out there, and you look at its exports and over 75 percent are manufactured goods. So Mexico, with many bumps along the way in the last 20 years, has found a way to compete in global markets in manufactured goods. And that's something Brazil actually has not yet done.

You look at manufactured goods as a percentage of the economy or as a percentage of trade, and it's quite low. And it still is benefitting from or in some ways hiding behind tax breaks, quotas, subsidies, preferable lending from the development bank and the like. So we haven't yet seen this transformation.

It's not that Brazil can't do it, and I think they will at some point, down the road, do it, but it is a fact that Mexico's already come out on the other wise. And while it was difficult process, it means when companies start up and grow and thrive in Mexico, they are globally competitive. So they are -- I see a benefit on the Mexican side there.

But one drawback I throw out there, and the worries I have for Mexico, I would say, was many of the things -- as you mention in the article, I think many things are moving in the right direction. But it doesn't mean it's all there. It means there are -- it's at the crossroads, and there's things Mexico needs to deal with.

One is the concentration of the economy. We've talked a bit about telecoms and broadcasting, which is on the agenda for reform. But many, many other sectors, from everything from cements and glass to hospitals, to soft drinks, to flour for tortillas -- all of these are very concentrated sectors. And that concentration -- not to mention, state-owned enterprises like electricity and energy and the like -- that concentration holds Mexico back.

And the other thing that Brazil, say, has a leg-up over Mexico is in financing and the broad finance in the economy. And here, Brazil has almost twice as much of a percent of GDP. So Brazil has over 50 percent of GDP in terms of the financing that's acceptable out there, while Mexico's in, you know, 25, 27 percent.

And that inability to financing for small- or medium-sized companies that, you know, need working capital or want to build a new part to their factory, or want to hire some more workers, that too holds Mexico back. And I think that's something that this government, if they really want to make a change when they leave five years from now, those are things they're going to have to focus on.

OPERATOR: Thank you.

Our next question comes from James Gibney with Bloomberg.

QUESTIONER: Hi, thanks very much.

I'd like to ask this to both of you, and that is, what has the administration done in its first four months that's surprised you or been unexpected?

SARUKHAN: Well, certainly, I think the one issue that has caught the attention of everyone, both in Mexico and abroad, is the decision to confront some of the ingrained power structures that existed in Mexico, most notably, the decision to arrest and seek prosecution of the former leader of the teachers union. That, I think, has been the one issue that has not only caught the attention of Mexicans and Americans alike, but I think the international media was impressed by this decision, regardless of the story itself.

QUESTIONER: Do you think it's a one-off or a harbinger of things to come?

SARUKHAN: Well, I would certainly hope it's a -- it's a harbinger of things to come. I hope that it is a decision to ensure that no one's above the law, and that some of these ingrained powers that have persisted in Mexico for many, many years in different sectors of the country and the economy and government can be broken down.

O'NEIL: I would agree with Arturo. I think the force and the speed of the reform agenda, whether it was education or telecommunications or the others that they keep signaling are waiting in the wings -- it was promised in the campaign. But people are used to promises that then aren't fulfilled. And so I think that speed and this -- the -- frankly, the fact that the pact for Mexico between the three political parties has lasted four months, and you know, we'll see how much longer it lasts. I think that is something quite new for Mexico's politics.

QUESTIONER: Right, thank you.

OPERATOR: Thank you.

(Gives queuing instructions.)

Our next question comes from Shashank Bengali with the L.A. Times.

QUESTIONER: Yeah, hi. Thanks for doing the call.

I was wondering if you all could talk a little bit about what your expectations are for President Obama's visit next month, and if there are any issues besides the one -- the majors ones, immigration, economic issues -- if you think there's something that may -- a major issue that may be left off the table in the negotiation in talks next month?


SARUKHAN: Well, I think that -- look, I think there are very few countries on the face of the earth that have such a broad agenda with the United States than the one Mexico has. You look -- you look at the issues, and they're all over the place, from obvious -- you know, that -- the obvious ones that have been at the forefront of the discussion these past years, security and border issues and immigration, but that -- you know, think of trade; think of energy; think of renewable energy, border infrastructure. This agenda is probably unique on the face of the earth.

So I would certainly -- the Mexican government has signaled its interest in talking about issues related to education, educational exchanges, the enhancement of the economic and trade relationship, which I think are absolutely correct. I think it's been -- for us, it's sometimes been frustrating that we can't address issues that we know will have a profound impact on the future well-being of the U.S. and Mexico, such as how to expand our education exchange programs, our Fulbright scholarships, the number of high school kids or teachers that do exchanges, one country to the other.

How can we build upon President Obama's 100,000 Strong program as to enhancing access to that program for Mexicans? How do we really build upon what has been one of the most important achievements of NAFTA, which are these integrated supply and production chains in North America, which really distinguish the North American economic region from other regional economic blocs around the world? How do we continue to ensure that NAFTA is a success? How do the U.S. and Mexico work together with our Canadian partners in the TPP negotiations, which will be a profound geostrategic game changer in the region? How do we rethink our -- the issues of energy security and energy independence and energy efficiency in North America, given that Mexico and the United States signed a landmark agreement for joint exploitation of our resources in the Gulf of Mexico?

These are issues that I hope that, regardless of the obvious weight that immigration will have, especially of the timing that President Obama's going to be in Mexico -- we will probably be in the midst of a bill hopefully making its way through the Senate by that point -- the obvious issue of how do we continue working together to enhance security and well-being on both sides of the border, that these other issues -- some of these other issues that I've mentioned play a -- play an important part in the discussions that they will both have in Mexico City in May.

OPERATOR: Thank you. At this time we have no further questions. Mr. Rose?

ROSE: Yeah, I've got one. You know, Arturo, if you've watched the recent U.S. election campaign and then the post-election analysis, the political role in the United States of Hispanics and -- as a constituency is one of the most heated and important questions in current American politics, and it has, I think it's fair to say, helped drive changes in the political outlook for various kinds of issues on the U.S.-Mexican bilateral relationship. Has it been surprising and/or interesting to see Hispanic Americans becoming such a valued political force? And how does that affect the future of bilateral relations?

SARUKHAN: Well, I certainly think that from a political point of view, it's been a fascinating process. Seeing the coming of age of the -- the political coming of age of the Latino community in the United States or the Hispanic community in the United States has been absolutely mesmerizing, and you've seen it play out, and you're seeing it play out as both parties in this country try to figure out ways to engage this very vital community.

My hopes are that as this community becomes much more politically engaged than they are already that they will also start having an impact on the formulation of U.S. foreign policy towards Latin America and the Caribbean. Yes, the great majority of them are Mexican, Mexican-Americans, but we've got very huge constituencies here in the United States of other nations throughout the hemisphere, and one would hope that as these communities, which are not homogeneous -- it would be a big mistake to think that all Hispanics, all Latinos are the same. They're not the same. A Cuban-American, a Mexican-American, a Dominican-American, a Colombian-American -- very different outlooks, political, social, philosophical. But as this community, writ large, starts playing a much greater role in the political fabric of this country, my hope is that that will start translating into a greater voice and a greater impact in the formulation of U.S. foreign policy towards the hemisphere.

ROSE: Shannon, I'm going to give you the last word. What do you -- same kind of question: Has the domestic resurgence of the Latino vote in the U.S. affected Latin American studies? And will it sort of have relation -- you know, affect the discussion over issues between the United States and Latin America, as opposed to just domestic questions in the U.S.?

O'NEIL: You know, I think it's, in some ways, too soon to tell what the reverberations will be throughout the region. You look at Latinos, Hispanic Americans and what's important to them. And you know, most of the polls say things like they care about jobs, they care about schools, they care about the other things that other Americans who don't have this heritage care about as well. That's often what tops their list.

That said, there are ties back, and particularly with Mexican-Americans because the generations there -- you have, you know, first generation, second generation, fifth, sixth, seventh generation -- those that came to the United States when the United States came to them, rather than them moving themselves, you know, when they lived in what was Mexico now Texas, or elsewhere.

And so there is -- whether there's direct ties because they came or their parents or grandparents are there, or there's ties of origins and nostalgia, but also remembrances of families lineages. I do think there's an element there and some interest in where they came from -- either very recently or a bit -- a while ago.

And that could play into foreign policy. It's some thing we have yet to see, in part because it's just this last election where the true political weight of this demographic began to take shape. So what I would expect is some issues that for many years people in the United States, particularly political representatives, have taken as purely domestic issues -- there may begin to be some recognition that there are foreign policy effects to it.

So whether that's immigration issues, whether that's trade issues, whether it's economic growth or in communities in various parts of the United States, even issues of where food comes from and how its produced -- these sorts of thing. We may -- because of the growth of the Latino population and some of the ties on these particular issues, we may start to see at least some consideration of the foreign policy aspects of what are often just considered domestic.

ROSE: With that, I want to thank you all for participating. Thank you, Shannon and Arturo. And we look forward to talking with you guys in the future and on other calls down the road. Thank you very much, everybody.

SARUKHAN: Thank you.

O'NEIL: Thanks, Gideon.

OPERATOR: Thank you, ladies and gentlemen. This concludes today's teleconference. You may now disconnect.

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