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PAN candidate Felipe Calderón was declared the victor of Mexico’s July presidential election, following weeks of disruptive protests and accusations of electoral fraud, and will formally take office on December 1. The new president inherits significant domestic policy challenges and a bumpy relationship with the United States. “How these problems are addressed during his six-year tenure will determine Mexico’s economic and political course well into the future,” says a new Council Special Report, recently updated to reflect the outcome of the July 2 election.
Stakes are high for the United States as well: a politically and economically stable Mexico is critical for finding a solution to the migration question, coordinating bilateral efforts to fight drug trafficking, enhancing the competitiveness of important sectors of the U.S. economy, and fostering U.S. security.
Calderón will face “many of the same domestic policy challenges as his predecessor—fiscal dependence on volatile petroleum revenues, enormous pension liabilities that expand with Mexico’s aging population, insufficient investment capital in the energy sector, declining global competitiveness, weak job creation and growth, corruption, inadequate rule of law, and increasing crime.” However, because of the electoral dispute and the new president’s limited mandate, the Calderón administration may struggle to rally support for the broad reforms Mexican society needs.
As the new Mexican president takes office, the United States must actively restore the U.S.-Mexican relationship. “Although the United States justifiably felt let down by Mexico’s delayed and tepid statements of sympathy after 9/11 and its lack of support for the Iraq war, U.S. officials seem to have underestimated the depth of Mexican disappointment at having fallen off the U.S. foreign policy agenda,” contends the report, Challenges for a Postelection Mexico: Issues for U.S. Policy, by the Eurasia Group’s Pamela K. Starr.
“The United States should take the lead in changing the tone of the relationship by reaching out to Mexico’s new president as a valued policy partner, and Mexico should reciprocate by thinking realistically about migration and attacking its pending domestic economic and security agenda,” writes Starr.
The imminent departure of President Vicente Fox offers an opportunity to “start fresh and bury the legacy of missed opportunities and bruised feelings of the past few years,” says the report. Starr argues that the United States should focus on three critical areas to improve the bilateral relationship:
- “The United States should no longer entertain the possibility of negotiating a bilateral migration agreement with Mexico….If the United States is serious about reducing migration from Mexico, it should help Mexico create the 500,000 new jobs needed each year to employ its would-be migrants.”
- The United States “should consider allowing Mexico to protect sectors of its domestic economy that generate a great deal of employment. The United States must accept the fact that if Mexico cannot export its goods to its main trading partner, it is destined to export its labor instead.”
- “The key to helping Mexico is not aid but fairer trade. The United States must stop insisting that Mexico accept subsidized agricultural exports. …It must stop blocking imports of Mexican goods that are more competitive than U.S. products…and allow Mexican truck drivers to compete fairly with their U.S. counterparts.”
North American Competitiveness
- “The best way for the United States to help Mexico carry out the fiscal, energy, and labor reforms required to enhance Mexican and North American economic competitiveness is to be patient and remain quiet. …As Mexico struggles to carry out these reforms, ‘advice’ emanating from the United States and especially from one of the branches of the U.S. government will be counterproductive.”
- “North American competitiveness depends on Mexico’s ability to improve the quantity and quality of its labor force and its transportation and communication network. …Targeted U.S. assistance programs that complement the efforts of private actors and the Mexican government can have an impact that far exceeds their monetary value.”
- “The lack of security for foreign investors, especially in the border region, and Mexico’s limited ability to deal with the drug cartels is a direct threat to U.S. interests. …The United States should enhance technical and financial assistance to support Mexican efforts to improve the training, pay, and effectiveness its federal and state police forces, albeit with an understanding of and sensitivity to Mexico’s reluctance to allow U.S. law enforcement personnel to operate on Mexican soil. And the current U.S. Agency for International Development (USAID) program promoting judicial reform and training should be substantially expanded.”
- “If Mexico is serious about improving the security environment within its borders, it also needs to overcome its historic sensitivity to joint operations with U.S. law enforcement and intelligence agencies.”
Contact: CFR Communications, [email protected]; 212-434-9888