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US-Mexico energy cooperation is vital to enable nearshoring

William Tobin — Tue, 18 Jun 2024 18:57:00 +0000

Claudia Sheinbaum’s historic election matters for Mexico’s relationship with the United States, particularly in trade and energy. While Sheinbaum has pledged continuity with the top-line agenda of outgoing president Andrés Manuel López Obrador (AMLO), subtle differences are emerging, opening new areas for cooperation. To make the most of those opportunities, the United States and Mexico must work together to enhance Mexico’s grid for a new industrial era.

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Mexico’s nearshoring opportunity

Mexico features prominently in US ambitions to “nearshore,” whereby companies move their production facilities closer to home and away from far-flung industrial hubs—mainly China. This shift is influenced by the United States’ drive to build more resilient supply chains in the wake of the COVID-19 pandemic and heightened geopolitical competition with China.

Cross-border economic ties under the United States-Mexico-Canada (USMCA) free trade zone are growing. The United States and Mexico are now each other’s largest trading partner. This can be attributed to many factors, including a deteriorating trade relationship between the United States and China, which reinforces the argument for nearshoring.

Mexico presents a supply chain opportunity for the United States. But from the Mexican perspective, support for nearshoring is relatively subdued. The “national project” of AMLO and Sheinbaum’s Morena party emphasizes combatting inequality including by developing the country’s south and strengthening state-owned companies. By contrast, the bulk of nearshoring investments would be made by private companies and go toward Mexico’s industrialized north, along the US border. Perhaps as a result, nearshoring has not progressed as rapidly as many predicted. US investors will need to align with Sheinbaum’s agenda to build a Mexican energy system capable of turning nearshoring into a reality.

Is nearshoring even happening?

A closer look at investment data paints a mixed picture of nearshoring. On one hand, foreign direct investment (FDI) in Mexico—the only measure of whether investment in the country is rising—reached a record $20.3 billion in the first quarter (Q1) of 2024, a 9 percent increase over Q1 2023. Fifty-two percent of total FDI in Mexico originated from the United States. On the other hand, only 3 percent of this increase can be attributed to new investments, contradicting the narrative that large-scale nearshoring is occurring. Furthermore, manufacturing as a share of Mexico’s economy grew to only 21 percent in the first half of 2023, from a pre-pandemic level of 20 percent. Tesla, which in March 2023 announced one of the largest nearshoring projects, has yet to break ground on its facility in Nuevo León. Like other investors, Tesla has encountered rising costs and logistical challenges.

Grid constrains are stifling nearshoring

Nearshoring is being limited by structural issues faced by Mexico’s electricity sector. Mexico’s grid has struggled to keep up with rising demand. The country suffers an “energy deficit,” facing difficulty connecting new manufacturing plants to the grid and—by extension—to renewable energy sources. The latter is a potential sticking point for electric vehicle producers looking to relocate to Mexico such as Tesla, GM, and Ford. The Mexican Association of Private Industrial Parks notes that this issue has postponed some projects and has throttled nearshoring in the years since the pandemic.

Is Mexico’s electricity sector a constraint?

The fragility of Mexico’s grid presents another major nearshoring obstacle. This was made clear in early May 2024 when the electricity demand on the grid nearly exceeded the total available generating capacity, leading the national electric system operator, CENACE, to declare a state of emergency. It has been reported that much of this demand can be attributed to the rising use of air conditioning and electric cooling during a record-breaking, weeks-long heatwave. As Mexico gets hotter courtesy of climate change, demand for cooling technologies—particularly for industrial processes—is set to rise.

Mexico’s electricity sector needs to shape up to meet increased demand from nearshoring.

More competition is needed—US investors can help

Mexico’s electricity sector offers a promising path for the United States to align its nearshoring objectives with Sheinbaum’s agenda. But to do so, it must benefit state-owned companies and free up state funds for social programs aimed at reducing inequality.

Increased private sector participation in the electricity sector is a necessity for achieving greater capacity and connectivity to unlock nearshoring. One analysis from the National Autonomous University of Mexico argues that increasing private sector participation in the electricity sector would not displace the state-owned electricity company CFE, which controls 40 percent of Mexico’s electric generation capacity, produces 70 percent of its power with private partners, and controls the full transmission and distribution network of the national grid.

In fact, CFE could benefit from increased industrial demand driven by nearshoring. Increasing private sector involvement in power generation can even help CFE by freeing it to investment in other areas, such as upgrading its transmission and distribution network and strengthening its balance sheet in the long term.

New president, new opportunities

AMLO has tried to strengthen CFE by passing a measure in 2021 to discriminate against private sector electricity generation and negate the 2013 Electricity Industry Law, which was designed to promote competition in the sector. Although the measure has since been overturned by the Supreme Court, the administration has effectively halted new public auctions for independent power contracts, preventing growth in private sector investment. Despite this, the private sector drove the increase in solar and wind power from 2014-2020.

Reversing course on private investment will be critical to restoring and expanding the capacity of the electric system and lowering costs. In 2019, independent power producers generated electricity 35 percent cheaper than CFE.

Sheinbaum’s election may present an opportunity for greater private sector collaboration with the United States. Facilitating investment can both strengthen Mexico’s grid and bolster the Mexican state, outcomes that are in line with Morena’s socioeconomic justice goals. While Sheinbaum will likely continue to favor state-owned companies, the Wall Street Journal reports that she also aims to “attract billions of dollars in private investment for solar and wind farms, with the government keeping control and a majority share in the electricity market,” citing a close advisor to Sheinbaum.

How the US-Mexico partnership can boost nearshoring and the electricity sector

The United States should seize the opportunity to work with the incoming Sheinbaum administration to strengthen the Mexican energy sector, thereby enabling supply chain security gains through nearshoring. The relationship should uphold the mutually beneficial tenets of the USMCA, including its level playing field for private sector investment.

In addition, the United States should redouble its technical and regulatory cooperation efforts with Mexican electricity regulators as has been conducted through the U.S. National Renewable Energy Laboratory (NREL). The aim of this partnership should be to work toward goals which benefit the Mexican administration’s agenda while strengthening economic ties and boosting Mexico’s manufacturing potential.

US-Mexico cooperation on electricity sector regulation can facilitate private sector investment in generation that could decrease the burden on CFE as the sole entity responsible for expanding the grid. Ceding greater financing responsibility to the private sector—with CENACE retaining control of the national electric system—could enable CFE to expand its business alongside the private sector and permit the Mexican state to focus on investments that promote increased prosperity for all its citizens.

With higher private sector participation conducted in a manner that respects the central role state-owned companies play in Mexican society, the electricity sector in Mexico can be transformed into an enabler of the nearshoring trend.

William Tobin is an assistant director with the Atlantic Council Global Energy Center.

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Bozmoski interviewed on Bloomberg Balance of Power

Atlantic Council — Tue, 04 Jun 2024 20:00:00 +0000

On June 4, 2024, Deputy Director of the Adrienne Arsht Latin America Center María Fernanda Bozmoski was interviewed on Bloomberg’s Balance of Power radio show and podcast about President Joe Biden’s executive order slashing asylum claims in the US.

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Bozmoski interviewed on Bloomberg Markets

Atlantic Council — Tue, 04 Jun 2024 15:23:00 +0000

On June 4, 2024, Deputy Director of the Adrienne Arsht Latin America Center María Fernanda Bozmoski was interviewed on Bloomberg Markets about expectations around the Claudia Sheinbaum presidency in Mexico.

The segment starts approximately 34 minutes into the video.

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Three ways Mexico’s new president could transform Central America

María Fernanda Bozmoski — Tue, 04 Jun 2024 14:56:13 +0000

Mexico’s northern border with the United States has received a lot of attention, but its southern border—and, more broadly, its relations with Central American countries—deserves attention, too. For many years, the thinking went that Mexico was, in a way, Central America’s big brother. Dare we ask if the ascent of Claudia Sheinbaum, who on Sunday was elected as Mexico’s next president, will make her country Central America’s big sister? While she will likely focus mostly on domestic issues—including tackling the rising levels of violence and insecurity in the country—she also has an opportunity to positively reset ties with Mexico’s southern neighbors. Three areas to watch in this respect are climate change, nearshoring, and migration.

A former mayor of Mexico City, Sheinbaum has a strong foundation in addressing urban challenges, governance, and social policies. Like her predecessor, outgoing President Andrés Manuel López Obrador, Sheinbaum will likely coordinate her policies under a narrative of addressing social injustice and advocating for Mexico’s most vulnerable. But unlike her predecessor, Sheinbaum is an environmental engineer and climate scientist by training. She appears poised to place environmental issues, including climate-change mitigation and adaptation, high among her social justice concerns. This would likely include seeking to advance issues ranging from sustainable agriculture to renewable energy.

At first glance, this may sound odd. Mexico is a major oil producer—the second largest exporter in Latin America after Brazil—and Sheinbaum has all but guaranteed that she will continue funding the state-owned oil company PEMEX, which suffers from a range of inefficiencies and carries debt of more than one hundred billion dollars. However, her scientific background and previous initiatives indicate a potential for balancing economic development with environmental sustainability. For example, during her time as mayor of Mexico City, Sheinbaum spearheaded the installment of solar power panels on top of a major market. Furthermore, she campaigned for president on a promise to address, early on in her administration, the water issues affecting Mexico City. Already during her first speech since the election, and probably in an effort to differentiate herself from López Obrador, Sheinbaum spoke about an upcoming renewable energy program for Mexico. Calibrating this balance will be crucial, as will working with regional partners. After all, Mexico and its neighbor Guatemala, for instance, face similar challenges of environmental degradation and the impacts of climate change, from flooding to droughts and a lack of access to water.

Another way in which Sheinbaum could partner with her Central American neighbors is by working together to seize nearshoring opportunities. Specifically, she and her regional counterparts could promote a mechanism whereby Central American economies would be able to join the United States-Mexico-Canada Agreement (USMCA). Nearshoring, or bringing international supply chains and production closer to the US market, can provide significant economic benefits, creating jobs and fostering economic stability in Mexico and throughout Central America. Promoting economic integration through the USMCA could provide a structured framework for this cooperation. The idea has been floated for a couple of years now, first by Costa Rica in 2022. This move would enhance the competitive edge of Central American economies, which in many ways are too small to make a difference on their own but together could create economies of scale. Bringing other Central American countries into the USMCA would allow these nations to benefit from the same trade advantages enjoyed by Mexico. It could also reduce many of the economic pressures that drive migration, namely a lack of jobs and insufficient wages.

Furthermore, Sheinbaum’s administration could adopt a more humanitarian approach to migration, focusing on protecting migrant rights and providing humanitarian assistance. While López Obrador touted his tree-planting “Sembrando Vida” program, Sheinbaum could take the programs a step further. This approach aligns with her broader progressive values—she is a self-described humanist—and can enhance Mexico’s role as a regional leader in addressing the migration crisis. During the campaign, Sheinbaum repeatedly mentioned increased investments in social and youth programs in Central America, which, if designed holistically and sustainably, could effectively curb migration from Mexico’s neighbors. This is particularly important now, as US President Joe Biden prepares to roll out an executive order that would allow the United States to temporarily close its southern border if a threshold of encounters with migrants at the border is reached—reportedly, an average of five thousand crossings in a week or 2,500 in a day.

Regional security is another area in which Sheinbaum could make a big difference. Almost three dozen candidates were assassinated during the current electoral campaign, and record-breaking violence in the country is resulting in more than thirty thousand homicides each year. Improved and increased intelligence-sharing between Mexico and Central American countries can help combat organized crime and violence, which are significant push factors for migration. This is also an area in which the United States and Mexico may look to double down on their cooperation. Sheinbaum has pledged to address the rampant impunity in Mexico—less than five percent of criminal investigations are solved and many crimes go unreported. While Sheinbaum is unlikely to approach the security issue in the severe manner of President Nayib Bukele in El Salvador, she has recognized the urgency of this issue for the livelihood of millions of Mexicans.

Sheinbaum’s presidency could bring about significant positive change in Mexico and its relations with Central America. Her administration’s policies on energy and environmental sustainability, economic integration, and migration will have an important impact on the future of the region. The first female president of Mexico has the opportunity to redefine her country’s role in Central America, address the root causes of migration, and promote a more stable and prosperous region. In this new chapter for Mexico and the region, the Aztec nation could very well be a strong and stable partner for Central American nations.

María Fernanda Bozmoski is deputy director, operations and finance at the Atlantic Council’s Adrienne Arsht Latin America Center, where she leads the center’s work on Mexico and Central America.

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Marczak interviewed on El Heraldo Radio about Mexican election results

Atlantic Council — Tue, 04 Jun 2024 14:25:00 +0000

On June 4, 2024, Vice President and Senior Director of the Adrienne Arsht Latin America Center Jason Marczak was interviewed on El Heraldo Radio about the priorities for Claudia Sheinbaum’s administration.

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Bozmoski interviewed on BBC News about Mexico election results

Atlantic Council — Tue, 04 Jun 2024 02:24:00 +0000

On June 3, 2024, Deputy Director of the Adrienne Arsht Latin America Center María Fernanda Bozmoski was interviewed by Caitriona Perry on BBC News about Mexico’s new president-elect, Claudia Sheinbaum.

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Sheinbaum just won a massive mandate in Mexico. Here’s how she might use it.

Jason Marczak, Bosco Martí — Mon, 03 Jun 2024 21:43:38 +0000

The election of Claudia Sheinbaum as Mexico’s next president was no surprise. In poll after poll, she consistently held the lead throughout the campaign season, and her victory was assumed going into Sunday’s vote. What was not expected, however, was her wide margin of victory and the overall percentage of the vote she received. What does this mean for Mexico going forward?

The numbers show an incoming administration with a strong mandate. With 58.3 to 60.7 percent of the vote, according to the National Electoral Institute’s Quick Count, Sheinbaum will enter office on October 1 even surpassing the share obtained by the current president, Andrés Manuel López Obrador, who won in 2018 with 53.2 percent of the votes. Her margin of victory over the second-place finisher could range from 29.7 to 34.1 percentage points—on track to likely surpass López Obrador’s margin (30.9 percentage points) as well.

Beyond the surprise in outperforming even some of the most generous polls, her party, MORENA, and its allies received a mandate in Congress that also surpassed expectations. In the Chamber of Deputies, the new Congress will convene in September with the MORENA coalition holding a supermajority (at least two-thirds of the seats), and it is within striking range to do the same in the Senate. Early signs indicate that the MORENA coalition will hold a minimum of 346 seats in the 500-person lower House and could hold anywhere from 76 to 88 seats in the 128-person Senate, with 85 seats required for a supermajority.

The significance here cannot be overstated. A supermajority allows for constitutional changes—from the direct election of judges to the independence of regulatory agencies—which could not be obtained thus far by the López Obrador administration. Explicit campaign pledges can now be advanced. This means a potential acceleration of the Fourth Transformation of the Mexican state as ushered in by López Obrador, especially if the outgoing president prioritizes constitutional changes once the new Congress convenes on September 1.

As López Obrador’s hand-picked successor, Sheinbaum will certainly continue with her predecessor’s policies, but she will also be her own president. A scientist by training and a former secretary of the environment, she will bring new technical expertise and pragmatism to the presidency. That was evident in her time as head of government of Mexico City, where she developed and then continuously followed up on the implementation status of her 220-page government plan.

Expect to see several of her priorities during her term running Mexico City to carry over to her presidential administration. For example, speaking with the Atlantic Council on the sidelines of the Cities Summit of the Americas last year, Sheinbaum showed an in-depth, technical perspective on sustainability—not simply as stewardship of natural resources, but also as an issue interconnected with education, social justice, healthcare, housing, and infrastructure.

Sheinbaum mentioned throughout her campaign the need to move forward with the energy transition, comments that reflect her background in energy engineering. There will inevitably be a role for the private sector to play in this transition, but as with her broader perspectives, the view of the Sheinbaum camp is that the government should lead the charge. The public-private partnerships that Sheinbaum moved forward during her leadership in Mexico City could be a model she brings to her new administration to advance, for example, more renewable energy projects in Mexico.

Infrastructure will also likely be a priority for the incoming administration. In her acceptance speech early Monday morning, Sheinbaum spoke about the need for new highways, trains, airports, and ports. All of these strategic projects are critical for Mexico to take advantage of the investment opportunities related to nearshoring with the United States. But given the tight government budget conditions that the new government will face, completing these projects will not be easy. Here, too, watch to see if the new administration turns to public-private partnerships to move these projects forward.

Finally, Sheinbaum will assume office in October with not only a sizable domestic mandate, but also with an opportunity to deepen Mexico’s engagement beyond its borders. López Obrador rarely traveled abroad, and Sheinbaum followed suit as head of government in Mexico City. Even though she took office in 2018, her trip to Denver for the Cities Summit of the Americas last year was rarity. But if and when she goes abroad, she will generate much interest given the potentially transformative moment she will oversee in Mexico and her place in history as Mexico’s first female president.

Jason Marczak is vice president and senior director of the Atlantic Council’s Adrienne Arsht Latin America Center. He leads work on the economic and security impacts of greater efficiencies and reduced wait times at the US-Mexico border including presenting findings before the Mexican Congress.

Bosco Martí is a nonresident senior fellow with the Atlantic Council’s Adrienne Arsht Latin America Center and is the global director of institutional affairs and communications for Aleatica. He previously served as executive director for Mexico and the Dominican Republic at the Inter-American Development Bank.

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Marczak interviewed by DW News about Sheinbaum’s mandate

Atlantic Council — Mon, 03 Jun 2024 20:47:00 +0000

On June 3, 2024, Vice President and Senior Director of the Adrienne Arsht Latin America Center Jason Marczak was interviewed on DW News about the mandate for Mexico’s next president, Claudia Sheinbaum.

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Marczak interviewed on CNN’s Isa Soares Tonight about Mexican president-elect

Atlantic Council — Mon, 03 Jun 2024 20:09:28 +0000

On June 3, 2024, Vice President and Senior Director of the Adrienne Arsht Latin America Center Jason Marczak was interviewed on CNN’s Isa Soares Tonight about the mandate for Mexico President-elect Claudia Sheinbaum.

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Marczak quoted by Reuters about Mexico’s president-elect

Atlantic Council — Mon, 03 Jun 2024 14:00:00 +0000

On June 3, 2024, Vice President and Senior Director of the Adrienne Arsht Latin America Center Jason Marczak was quoted by Reuters about Mexico President-elect Claudia Sheinbaum.

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Marczak interviewed on BBC News about Mexico’s presidential election

Atlantic Council — Mon, 03 Jun 2024 01:48:00 +0000

On June 2, 2024, Vice President and Senior Director of the Adrienne Arsht Latin America Center Jason Marczak was interviewed by Helena Humphreys of BBC News about the elections in Mexico.

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Marczak interviewed by CNN about 2024 Mexico election

Atlantic Council — Sat, 01 Jun 2024 10:00:00 +0000

On June 1, 2024, Vice President and Senior Director of the Adrienne Arsht Latin America Center Jason Marczak was interviewed on CNN Newsroom about the June 2 elections in Mexico.

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What to watch in Mexico’s elections: A supermajority and a superpower

Jason Marczak — Thu, 30 May 2024 18:50:43 +0000

Sunday marks the biggest election day in Mexico’s history. One hundred million Mexicans are registered to cast ballots for more than twenty thousand positions across all levels of government. The task ahead for the most closely watched of those posts—the next president—will be a daunting one, with much riding on two other electoral outcomes: the composition of Mexico’s Congress and the US election five months later.

Following the official three-month presidential campaign, polling indicates that one candidate has a firm lead. Assuming former Mexico City Head of Government Claudia Sheinbaum performs on par with expectations—the latest Reforma poll gives her a 20 percentage point lead over former Senator Xóchitl Gálvez—the candidate of the governing MORENA party will become Mexico’s first female president on October 1. The lack of movement in this poll since the campaign season began on March 1 is noteworthy. Sheinbaum has only dropped 3 percentage points (to 55 percent support) in the last three months. Other polls give Sheinbaum a lead of anywhere from 11 to 22 percentage points, with voter turnout one of the major factors to watch on Sunday.

More uncertain is what will happen in Mexico’s Congress. What has scuttled attempts by the current Mexican president, Andrés Manuel López Obrador, to fully carry out some elements of his government’s plan has been the checks provided by Congress. With a simple majority of seats—rather than the supermajority of two-thirds of the seats—the MORENA coalition rallied to pass some important pieces of legislation, but it has been impeded from making major constitutional changes, including controversial proposals for the popular election of Supreme Court judges and eliminating independent regulators.

Thus, this Sunday’s vote will determine whether López Obrador’s hand-picked successor, Sheinbaum, could advance the outgoing president’s stymied constitutional proposals. Polls—although less numerous and harder to calculate given the sheer number of candidates up for election (628 combined senators and deputies)—indicate continuity in Congress. Polls by the newspaper El Financiero, for example, predict that the MORENA coalition will secure 49 percent of the seats in the Chamber of Deputies with opposition parties taking 40 percent. The check on power provided by Congress in this scenario, in which MORENA would lack a supermajority, would likely give assurance to international markets, since uncertainty around such reforms and their repercussions can generate anxiety for investors.

Counting the ways to count

How does Mexico’s unique vote-counting work? While the final congressional breakdown will take some time to determine, expect declarations on the presidential winner on Sunday night. Hours after polls close, results will begin to be shared from two different systems that count votes: the quick count and the preliminary electoral results program (PREP).

The quick count takes a predetermined, statistically representative sample of polling stations, and then it gives a minimum and maximum possible vote percentage for each candidate. Results are expected to be announced around 11:00 p.m. (CST), with all eyes on whether the margin of possible votes indicates a clear winner. The PREP, which is operational beginning at 8:00 p.m. (CST), reports results in real time from all polling stations as transmitted, which means that urban votes are likely to be accounted for earlier in the process. And to make things even more complicated, the official counting does not begin until June 5, thus the importance of the earlier vote-counting methods to give more timely results.

The other election

The next Mexican president will also have a keen interest in the vote-counting on November 5. The US election, and in particular how Mexico figures into the campaign leading up to election day, will set the stage for the coming years of bilateral ties. A newly inaugurated Mexican president may be forced to immediately respond to US campaign rhetoric.

Security and migration are top issues both north and south of the Rio Grande. While Sheinbaum has pledged to continue the current government’s focus on social and educational programs to reduce violence, Gálvez favors a strategy that puts greater emphasis on the security apparatus to combat crime. On migration policy, both candidates would continue to take a human-centered approach that recognizes and seeks to find solutions to the high demand for labor. A third important bilateral issue will be the review period of the United States-Mexico-Canada Agreement, also known as USMCA, as the 2026 sunset clause approaches. This is all the more important now that Mexico is the United States’ number one trade partner. Here, a new Atlantic Council report suggests several ways that the next Mexican administration can unlock even greater border commercial efficiencies and new trade and investment.

Amid a fast-changing global order, a prosperous Mexico and strong US-Mexico ties will be increasingly important for the United States. US and Mexican security and economic concerns are deeply intertwined, as are their people. Sunday’s vote will set a crucial marker for how the relationship develops for the rest of the 2020s.

Jason Marczak is vice president and senior director of the Atlantic Council’s Adrienne Arsht Latin America Center.

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With the 2024 Mexican election looming, here are two major recommendations for the next president

Thu, 23 May 2024 16:00:00 +0000

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Foreword

Countries representing half the world’s population are voting in 2024. On June 2, just over five months before Election Day in the United States, Mexican voters will set a historic milestone with the election of the country’s first female president. Over the course of her six-year term, Mexico’s new president will face enormous challenges—internally and in the country’s relationship with the United States. But, like never before, there is also a unique opportunity to strengthen the commercial and economic ties that bind the two countries and reimagine how our shared border could better serve our shared interests.

Although the United States and Mexico have long been economically intertwined, in 2023, Mexico became the United States’ most important trading partner. Now more than ever, with great geopolitical headwinds, the commercial ties that bind our two countries will be increasingly critical to advancing US economic interests globally. Here, greater border efficiency will yield economic gains alongside improvements in our shared security.

The Atlantic Council’s Adrienne Arsht Latin America Center, in partnership with internal and external colleagues and partners, sought to envision the future of two key aspects of the US-Mexico relationship: commercial flows and investment. With extensive feedback and numerous consultations with border stakeholders, including business owners, truck drivers, port operators, civilians, and local and federal elected officials, we sought out fresh perspectives and actionable recommendations. Our goal with this report is to spark dialogue among policymakers, business leaders, and civil society in both countries on the urgent need to address the immediate challenges of border efficiency and investment attraction over the next Mexican president’s term while paving the way for a more prosperous and secure future in our countries.

The Rio Grande and its surrounding towns are more than a physical barrier separating the United States and Mexico. Rather, they are a vibrant artery of commerce, migration, and cultural exchange. Livelihoods depend on our border, but inefficiencies prevent us from maximizing the possible economic opportunities and achieving the necessary security gains. The pages that follow build on previous center findings and emphasize the need for a nuanced approach to foreign investment, infrastructure development, and security measures that prioritize efficiency and our national interests.

This publication also seeks to bring the human dimension to the forefront. Public policy, after all, should reflect how to improve everyday lives. We consolidate the stories of real people affected by the US-Mexico border daily. The combined stories we have gathered over the last two years remind us of the impact of policy decisions. That reminder is particularly poignant with the 2024 elections on both sides of the border. Indeed, we stand on the cusp of a new chapter in our shared history.

This report is a call to action for visionary leadership and bold, pragmatic solutions to the complex issues facing the United States and Mexico. We urge policymakers to embrace policies and strategies that address immediate challenges while laying the groundwork for both an even more inclusive and prosperous future. Let’s seize this unique moment in time.

Jason Marczak
Vice President and Senior Director
Atlantic Council’s Adrienne Arsht Latin America Center

Explainer video

Mexico’s path forward: A conversation with Ildefonso Guajardo

Ildefonso Guajardo discusses Xóchitl Gálvez’s view on a more efficient US-Mexico border and increased opportunities of economic investment.

Economy & Business Elections Latin America Mexico

Mexico’s path forward: A conversation with Diana Alarcón

Diana Alarcón discusses Claudia Sheinbaum’s view on a more efficient US-Mexico border and increased opportunities of economic investment.

Economy & Business Elections Inclusive Growth Latin America

The Adrienne Arsht Latin America Center broadens understanding of regional transformations and delivers constructive, results-oriented solutions to inform how the public and private sectors can advance hemispheric prosperity.

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Mexico’s next president must address violence against women in rural areas

Charlene Aguilera, Isabel Chiriboga — Tue, 23 Apr 2024 17:54:57 +0000

Two of the leading candidates running to be the next president of Mexico are women. The vote on June 2 could see either Claudia Sheinbaum (the current frontrunner) or Xóchitl Gálvez elected to the highest office in the country, breaking the glass ceiling. Despite this testament to the progress made by Mexican women and society, a harsh reality persists: Women in rural areas face rising violence perpetrated by criminal groups.

According to recent studies, violence against women in Mexico has surged, with more than 70 percent of Mexico’s 50.5 million women and girls over the age of fifteen experiencing some form of violence. This brutal reality is heightened by the fact that many crimes in Mexico often go unreported, hindering governmental efforts to address the disproportionate impact of criminal violence on women in rural states such as Veracruz, Oaxaca, and Chiapas. It is a serious problem in Mexico, and it is also a concern for its northern neighbor. It’s in the United States’ best interest to take a closer look at the increased effect of organized crime on women in Mexico and the growing migration pressures it is generating.

It is no secret that Mexico stands as one of the most violent countries for women. For years, Mexico has struggled with inadequate resources and institutions to safeguard victims and prosecute offenders.

Even urban areas such as Mexico City, which have more access to resources and investment than rural areas, have struggled to create a holistic security agenda that can ensure women’s safety. However, between February 2020 and 2024, the incidence of femicide in the capital decreased by 20 percent, according to the Secretariat of Citizen Security in Mexico City. Although this value does not encompass the full dimension of the violence women face in Mexico, the decrease may be a result of certain components of the city’s security agenda. This agenda includes implementing gender-sensitive training for military and police personnel, bolstering female representation in law enforcement, improving access to mental-health and victim-support services, and streamlining abuse reporting mechanisms through preventative policing measures.

The most severe violence against women predominantly occurs in remote Mexican states characterized by pervasive poverty and the presence of criminal organizations. States such as Oaxaca, Veracruz, and Chiapas, plagued by poverty and host to multiple cartels, pose significant threats to women’s safety. These states are notorious for their danger to women, even though they do not always report the highest number of femicides or other cases of gender-based violence given the fear of victims to come forward and lower law-enforcement presence. A 2021 United Nations Development Programme study in Mexico indicates that in areas controlled by drug cartels, violence against women intensifies, with relatives often refraining from reporting crimes out of fear of retribution. Such violence becomes a tool of intimidation and a display of dominance for these criminal groups, perpetuating a cycle of violence. These mostly rural states serve as hubs for organized crime due to weak state presence and proximity to key transit routes. As a result, the convergence of poverty, crime, and violence has prompted mass emigration to urban centers and the United States, particularly among vulnerable populations.

To address this dire situation, it is important for the administration that takes office later this year to pay closer attention to violence against women in these states. To start with, reliable data is needed. In Mexico, an estimated 93 percent of crimes go unreported. In 2023, 2,580 women were murdered but only 830 were categorized as femicides. Strengthening transparent and trustworthy institutions that collect accurate data in these areas is crucial to fostering an environment where victims feel safe to come forward.

Security plans that have shown some success in urban areas are often difficult to apply as a whole in more rural areas, due to the lack of infrastructure and resources. However, there are certain transferable steps that can help improve women’s safety. For instance, recruiting more and better female police officers to ensure greater representation in police forces can make women feel safer when coming forward about their experiences. Failure to address these urgent needs perpetuates inequality and undermines Mexico’s potential as an economic powerhouse.

Furthermore, the increase in gender-based violence in Veracruz, Oaxaca, and Chiapas is greatly impacting migration dynamics, particularly toward those migrating to the United States. A 2021 report from the International Organization for Migration sheds light on the reasons behind this migration trend, revealing that 11 percent of respondents left Mexico due to gender violence. Moreover, 7 percent of those women interviewed mentioned encounters between criminal groups as a main reason for migrating. This migration pattern shows the immense need for addressing the root causes of gender-based violence in rural Mexican states, as it directly influences migration flows and exacerbates the ongoing migration crisis at the US-Mexico border.

The United States can help address gender-based violence in rural Mexican areas. For example, the US State Department’s Safe from the Start ReVisioned program is dedicated to eradicating all forms and threats of gender-based violence that women and girls encounter. Given adequate resources and attention, such collaborative efforts between the US and Mexican authorities can bolster capacities to prevent and respond to violence effectively. Other potential initiatives, such as skills transfer, training in conflict resolution, and trauma-informed care programs, can empower local communities to address violence comprehensively. By implementing innovative strategies and comprehensive support services, the incoming Mexican administration, along with its US counterpart, can make important progress in addressing the root causes of gender-based violence while cracking down on organized crime and undocumented migration.

As Mexico prepares for this year’s historic election, there is a unique opportunity to prioritize the issue of gender-based violence and enact meaningful change. Now more than ever, it is imperative for political leaders to recognize the urgency of this issue and commit to implementing policies and programs that prioritize the safety and empowerment of women, particularly in rural Mexican states.

Charlene Aguilera is a program assistant in the Caribbean Initiative at the Atlantic Council’s Adrienne Arsht Latin America Center.

Isabel Chiriboga is an assistant director at the Atlantic Council’s Adrienne Arsht Latin America Center.

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US ratification of the ocean treaty will unlock deep sea mining

Alex Gilbert and Morgan Bazilian — Tue, 02 Apr 2024 18:13:47 +0000

Hundreds of former political and military leaders are calling for the US Senate to ratify the UN Convention on the Law of the Sea (UNCLOS), the impetus being to open up deep sea mining to supply critical minerals needed for clean energy and military technologies. UNCLOS, adopted in 1982, is the primary international treaty governing state activities in oceans, particularly in areas beyond national jurisdiction that hold seabed minerals. Deep seabed resources include highly valued minerals such as cobalt, nickel, and rare earths. Recent technological advances and new companies are making their extraction economically feasible for the first time.

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The United States has yet to ratify the UNCLOS due to historic opposition toward its international regulation of seabed resources in the High Seas. This lack of participation bars US companies from directly participating in what could be a significant new industry. It has already led to dominance of deep sea exploration permits by geopolitical competitors—China and Russia have together won nine permits, including in areas historically claimed by the United States. By ratifying the Law of the Sea treaty, the United States can bolster critical mineral supply security, enter deep sea markets, and enhance national security.

Governments and private industry have long worked to enable the extraction of minerals from the deep seabed for a range of resources, including cobalt crusts, hydrothermal sulphides, and polymetallic nodules. Of these, polymetallic nodules are the most sought after—ocean processes create these billiard-ball-sized clumps of valuable metals. Ore grades in nodules significantly exceed those on land, making their extraction both cost and emissions efficient. The largest collection of nodules is located in an area called the Clarence Clipperton Zone (CCZ), which stretches the Eastern Pacific between Hawaii and Mexico. Recent technological developments, particularly in remotely operated vehicles and underwater vehicles, mean that deep sea resources are potentially economical today.

Reliable critical mineral supplies are increasingly important for the global economy and security. They are needed to meet clean energy needs, including electricity infrastructure, electric vehicles, and renewable energy. Many advanced technologies for defense applications, particularly electronics, require stable and growing supplies of these rare minerals. China dominates extraction and processing of most critical minerals, while the United States is a major importer for all minerals that deep sea mining might supply.

Governance of deep sea mining depends on location. Under UNCLOS, seabed resources within exclusive economic zones are governed by the relevant nation. Norway recently became the first country to authorize mining of such resources in their jurisdiction, but most resources are outside such zones. Resources in the remaining half of the ocean, called the High Seas, are governed by the International Seabed Authority (ISA). Although the United States played an active role in negotiating UNCLOS and considers most of it customary international law, it has not ratified the treaty due to Senate opposition to the role of the ISA. Among other reasons, some senators historically opposed the ISA’s international royalty mechanism, and expressed concerns about precedent for other domains like outer space. Without ratification, the United States cannot directly participate in the ISA’s governing process, and American companies cannot receive ISA mining permits.

These criticisms are not unfounded. The ISA has existed for decades and yet is struggling to establish a governance framework. The small nation of Nauru is forcing the issue legally, and the ISA is close to finalizing its mining permit system, without clear environmental protection. Global environmental groups have called for a moratorium on deep sea mining until scientists can conduct more research on environmental impacts.

Still, one of the primary objections (that an ISA-like royalty mechanism would be created for space exploration) to ratifying the law of the sea is no longer valid. In the last decade, the United States and many other countries have passed domestic legislation legalizing space mining without a space equivalent to ISA. This approach has been legitimized by the multilateral US-led Artemis Accords, which now has thirty-five signatories including all major space powers except China and Russia. The United States has secured a governance pathway forward for space resources that does not repeat the limitations of the ISA.

The letter calling for ratifying the Law of the Sea is the culmination of a growing bipartisan agreement around securing critical minerals in the face of an ongoing trade war with China. A group of bipartisan senators led by Senators Lisa Murkowski, Mazie Hirono, and Tim Kaine introduced a resolution explicitly calling for ratification. Congress, in both informal letters and directed reports, is pushing for studies on deep sea resources in US waters and the ability to establish domestic processing infrastructure. In late 2023, the US State Department initiated an extended continental shelf claim into the Arctic and Pacific oceans, exerting jurisdiction over seabed mining for certain areas beyond its exclusive economic zone, a practice explicitly outlined in UNCLOS. However, China and Russia have challenged this new assertion, arguing at ISA that the US cannot make the claim because it has not signed UNCLOS.

Ratifying UNCLOS would also bolster US diplomatic power. The Houthi campaign in the Red Sea is disrupting 20 percent of global maritime trade. Multiple submarine telecommunications cables in the Baltic Sea and Red Sea have been severed in the last year, threatening global internet connectivity. For more than a decade, China has been violating the principles of the LOS with their actions in the South China Sea and elsewhere. UNCLOS ratification would greatly strengthen US credibility in seeking international coalitions to push back against these challenges.

The future of deep sea mining remains uncertain. The burgeoning industry faces technical, economic, regulatory, environmental, and political challenges. The abyssal plains of the deep seabed hold unique biodiversity and are fragile, so mining activities must readily incorporate environmental best practices to limit impacts and gain social license to operate. Nevertheless, its potential benefits to meeting critical mineral supply are substantial, as are the geopolitical stakes of establishing a leadership position. The urgency of securing critical mineral supply means the time is right for the United States to reconsider its formal participation in UNCLOS.

Alex Gilbert is a PhD student in space resources and a fellow at the Payne Institute for Public Policy at the Colorado School of Mines.

Morgan Bazilian is the director of the Payne Institute for Public Policy at the Colorado School of Mines.

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Irregular migration starts well before the US southern border. Focus on the driving causes of the problem.

María Eugenia Brizuela de Avila — Thu, 29 Feb 2024 00:09:57 +0000

With US President Joe Biden and former US president (and current candidate) Donald Trump both scheduled to visit the southern border on Thursday, the spotlight is once again on the United States’ immigration policies. But it is an issue that extends well beyond the US-Mexico border. In 2023, a record 520,000 people crossed the treacherous jungle between Colombia and Panama known as the Darién Gap, more than double the number reported the year before, according to figures from the government of Panama. This figure highlights the critical need for comprehensive policies in the United States and in the region that not only ensure citizen and border security but also address migration as part of a broader, interconnected security challenge in the Western Hemisphere, spotlighting the pivotal role of the countries that migrants traverse.

Most immigrant traffic to the United States goes through and comes from Latin America. A lack of economic opportunities, climate vulnerabilities, political instability, and the pervasive influence of organized crime are often cited as push factors for these migrants. However, recent migration patterns also reveal a diversification of nationalities at the US southern border, underscoring the global nature of the challenge. In addition to regional events such as the collapse of Venezuela, political instability in Haiti, violence in Ecuador, and the ongoing and unrelenting crackdown in Nicaragua, conflicts such as Russia’s invasion of Ukraine and the war in the Middle East are also fueling the migration crisis. Most migrants at the US southern border in recent years originated in Mexico, El Salvador, Guatemala, and Honduras. However, despite the persistent conception of most migrants coming from Central America, in December, more than half of migrant encounters at the US-Mexico border involved citizens of other countries, such as Russia, India, Brazil, Afghanistan, Romania, Turkey, and others.

As such, Latin American countries and the United States should work together to develop and implement policies and strategies that address the driving causes of migration that are specific to the region and mitigate the region-wide risks of such a large migrant flow—much of which now comes from outside the region.

Specifically, the United States should work with the countries originating high numbers of migrants to improve conditions and thus prevent the need for people to leave their countries—whether from Latin America and the Caribbean or other parts of the world. That starts with a holistic security strategy to address the challenges of human, drug, and arms trafficking. Supporting local economic growth and human capital development, employing climate change mitigation and adaptation programs, and fostering coordinated, multifaceted responses to the drug supply chain would create a more secure hemisphere and decrease the number of people fleeing violence.

Additionally, the United States needs to recognize that its current policies aimed at deterring migration are ineffective and often harmful. The hardline policies that were put in place by the Trump administration and have largely been continued by the Biden administration have done little to nothing to curb migration flows. At the US-Mexico border, migration crossings have hit a record high, with more than three hundred thousand Border Patrol encounters with migrants in December. This context demands a reevaluation of current strategies aimed at deterring migration.

Instead of continuing its failed effort at deterrence, Congress should focus on developing humane, legal pathways to migration, recognizing pull factors in the United States, which will decrease the frequency of irregular migration. A straightforward recommendation is for clear, realistic timelines for US judges to expeditiously deliver decisions on asylum cases.

The United States should not take on all of the burden. There are opportunities to work in the region and support regional partners on integrating displaced migrants in third countries, from the region or from other parts of the world, to help alleviate the migration flow to the US border. A new report by the Atlantic Council also puts forward the idea of the United States supporting a regional task force “with the goal of jointly addressing the factors behind irregular migration and insecurity.” The idea builds on the existing work of countries such as Costa Rica and Panama, which are working hand in hand to establish more streamlined, efficient, and unified border crossings. Last week, these two countries, with the assistance of the Inter-American Development Bank, inaugurated a one-of-a-kind border facility. Building on the Atlantic Council’s recommendation for a regional task force to address these challenges, the United States, Mexico, and Guatemala are already moving in this direction. The three nations have just “committed to establish an operationally focused trilateral working group aimed at enhancing security, law enforcement processes, and infrastructure along their international borders”—a concrete manifestation of a collaborative approach to solving regional challenges.”

Migration and security are inherently interlinked issues, and the urgency for a collaborative, multifaceted approach to both cannot be overstated. The United States must work with and support other countries in the hemisphere to holistically mitigate the root causes of migration and create safer conditions for citizens across the region.

María Eugenia Brizuela de Avila is a nonresident senior fellow with the Atlantic Council’s Adrienne Arsht Latin America Center and a former minister of foreign affairs of El Salvador.

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Warrick quoted in Brackety-Ack on efforts to impeach DHS Secretary

Atlantic Council — Wed, 28 Feb 2024 16:34:08 +0000

The post Warrick quoted in Brackety-Ack on efforts to impeach DHS Secretary appeared first on Atlantic Council.

Mexico’s vital institutions face decline

Vanessa Rubio-Márquez — Mon, 26 Feb 2024 14:00:00 +0000

All essays

Evolution of freedom

Freedom to prosperity

The future ahead

Evolution of freedom

The Freedom and Prosperity Indexes have served as a useful tool for observers and policymakers alike to identify trends and historical evolution of countries. In the case of Mexico, the Indexes rank the country as “mostly free” and “mostly prosperous”. However, recent declines in several indicators are early warning signs of an erosion occurring, at least on some fronts. Complementing the findings of the Indexes with qualitative insights can provide a nuanced understanding of the drivers, trends, and challenges that Mexico is facing.

Between 2018 and 2022, Mexico’s overall freedom score dropped from 66 to 61, placing it 90th out of 164 countries. This decline in ranking is unique among Latin American nations, which maintained an average aggregate score of 65. During this period, the most significant declines came in Mexico’s legal freedom score, which fell from 53 to 47 (now ranked 117) and its political freedom score, which fell from 74 to 65 (now ranked 102). In contrast, the economic freedom score remained relatively stable at around 70 (ranked 52). While various political and economic factors likely contributed to these trends, it is worth noting that significant changes have occurred since President Andrés Manuel López Obrador (AMLO, by his acronym), assumed office in December 2018, which have had a notable downward impact on these freedoms.

When it comes to legal freedom, the subindex records significant declines with respect to judicial independence, clarity of the law, and bureaucracy and corruption that are attributable to previous governments, but which have been exacerbated since 2018. While legal institutions such as the Supreme Court of Justice and regulators remain relatively autonomous overall, a large driver of the declining trends stems from the current government’s direct and tacit attempts to undermine their functioning and independence.

For instance, the decline in judicial independence scores, from 60 to 47 between 2018 and 2022, is largely due to ongoing attempts to influence the Supreme Court and control their key decisions. Since taking office, AMLO has appointed four of the nine Supreme Court Justices. Notably, two of them have aligned with the president’s political agenda, and the other two, in the words of the president himself “turn out to be conservatives,” meaning that they are independent—as they should be—and do not abide by his mandates. Most recently, the president directly appointed a new Justice to a vacant seat on the Supreme Court—a political loyalist and former Morena party activist. The interference in key decisions is overt at times: for example, AMLO said it would be an “act of treason to the country” if the court ruled against the Electric Industry law, despite serious concerns over the law’s constitutionality. Two key rulings regarding this law were expected in September 2023, but have been delayed as the energy ministry introduced a legal complaint regarding potential conflicts of interest of two Justices of the court. The law prioritizes the state-owned utility CFE, undermining private sector participation (among other issues) but it is a key plank in the president’s nationalistic energy agenda.

The government is also attempting to undermine the Supreme Court in other ways, for instance by engaging in confrontational and polarized criticism of the court’s president, including endorsing public protests against her, underscoring and increasing the political pressure on Justices. The government also seeks to exert financial pressures over the court. On October 25, 2023, Congress approved cuts of US$815 million to the Supreme Court’s budget—granting the court 18 percent less than had been requested for the 2024 budget (and representing a 2.7 percent reduction compared to the 2018 budget, according to México Evalúa). Moreover, the party in government presented a bill (September 2023), supported by the president, to eliminate the Judicial Power’s trust funds, which was eventually suspended by the Supreme Court itself, proving that the measure would undermine the labor rights of workers, who were the final owners of the resources: the cuts aimed to eliminate fourteen trusts specifically earmarked for employees’ pensions and healthcare, as well as implement recent judicial reforms that have expanded the responsibilities of the High Court.

The decline in the clarity of the law score, from 48 in 2018 to 34 in 2022, is a result of several policy shocks which take a toll on business confidence. The current administration has created persistent uncertainty, especially regarding the enforcement of crucial regulations governing contracts, tariffs, and prices, that are necessary for maintaining a competitive market. This ranges from the cancellation of the Mexico City airport project, despite it being 70 percent complete, to hindering competition in the electricity and renewables market. As a result of this, on July 19, 2022, the United States and Canada initiated a consultation under the United States-Mexico-Canada Agreement (USMCA) to discuss Mexico’s energy policies, in particular claiming a violation of competition and clean energy commitments. The consultations are ongoing, though dispute settlement mechanisms have not been triggered as the parties are expecting the Supreme Court to rule on the constitutionality of the Electric Industry law.

The administration recently delivered yet another significant blow to business confidence. On October 5, 2023, the Federal Civil Aviation Agency unilaterally altered the tariff base regulation for the concessions of nongovernment airport operators—without any previous consultation. Ultimately, this uncertainty makes it difficult to assess the regulatory risks, and results in added costs for companies and cancellation of investments in the country.

Since 2018, there have been budget and staff cuts to key ministries and autonomous institutions, jeopardizing Mexico’s bureaucratic structure and redirecting resources to the president’s favored projects. In addition to the budget reductions to the Supreme Court, the 2024 budget proposes cuts for the health, economy, and tourism ministries (21 percent, 56 percent, and 77 percent respectively, compared to the 2019 budget, the first of AMLO’s presidency). Instead, resources are being redirected to ministries overseeing the president’s social programs and fiscally unviable pet projects, resulting in significant increases in funding for the energy, well-being, and defense ministries (609 percent, 266 percent, and 176 percent respectively). These shifts in spending reflect a broader trend towards centralized decisionmaking and an enormous role for the military—a tendency that has adversely affected the “bureaucratic effectiveness” indicator of the Index. The centralization of government procurement contracts is one example, which, together with a lack of delivery capacity, led to a severe shortage of medicines in 2021, according to an independent audit by Auditoría Superior de la Federación (ASF).

And while these changes have been justified on the grounds that they would reduce corruption, Mexico has not made much progress on this front, ranking 126 of 180 countries in Transparency International’s Corruption Perceptions Index in 2022, with a score of 31 out of 100, a decline from 35 in 2014. Particularly worrisome has been the involvement of the military in many economic activities, including managing ports and customs, executing the president’s infrastructure projects, and even owning a commercial airline. Citing national security concerns as a justification, these changes have led to opacity in the disclosure of government contracts and an increased practice of direct assignments instead of public and transparent bids—worsening rather than abating corruption concerns.

Most recently, before the year end of 2023, the president has raised the stakes: he has indicated that the autonomous institutions will be disbanded altogether, as (in his own words), “they don’t serve the people and are at the service of minorities.”

Another notable aspect contributing to the decline of legal freedom in Mexico since 2018 is the shifting security landscape, characterized by an increasing reliance on the military for day-to-day law enforcement activities, and the “hugs not bullets” policy, which essentially advocates for a nonconfrontational stance towards organized crime. The traditional presence of civil police has been superseded by the emergence of military police, or in some instances, direct military intervention in street-level security operations throughout the country, creating human rights concerns. And the lack of actions against organized crime has allowed it to become more powerful in certain parts of Mexico, resulting in a rise in violence and insecurity across the country. According to the Executive Secretariat of the National System of Public Security, homicides during the five years of AMLO’s government have reached 156,479 (as of November 2023), more than the whole six years of the previous administration.

On political freedom, the executive has sought to undermine the National Electoral Institute (INE), not only by attempting several constitutional and legal reforms, but also by significantly slashing its budget. The INE was established in the 1990s and serves as a crucial pillar of Mexican democracy, organizing elections and ensuring fair electoral processes. Although attempts to reduce the institute’s independence and power have so far faced congressional and wider public rejection, the president plans to present a new bill during his last year in government (2024), arguing—without proof—that the institute shows a “lack of independence and impartiality.”

On yet another metric, the decline in the legislative constraints on the executive score, from 54 in 2018 to 36 in 2022, also contributed to the overall decline in political freedom. AMLO’s landslide victory in 2018 gave his ruling Morena coalition a significant majority in Congress and, although it shrank in the 2021 midterm elections, the coalition still holds 55 percent of the seats in the House and 59 percent in the Senate. The pressure on ruling coalition legislators to vote as a bloc has, in most instances, allowed the president to capture Congress and enabled major reforms in education, labor, and energy. These reforms have been approved with little or no input from the ruling party, coalition partners, or opposition legislators, undermining the process of checks and balances. The Senate has remained an important counterweight, particularly with regard to constitutional reforms; and Congress too has recovered some of its balance, since the ruling party lost its absolute majority during the 2021 midterm elections.

The active undermining of the legislative processes and political pressure on opposition legislators to vote in line with the president’s priorities have also become more common. For instance, the reform of the electoral system was ruled unconstitutional (June 2023) by the Supreme Court due to violations of the legislative process. These included not giving legislators adequate time to debate and consider the bill, as significant last-minute amendments were submitted less than three hours before the vote, and further changes were unlawfully incorporated after its approval. This and similar incidents highlight the overt sidestepping of procedure that has become more common in this legislature. Overall, this undermines the proper functioning of the legislative body and weakens the separation of powers enshrined in the Constitution.

On economic freedom, the transformation of the relationship between the state and the private sector has been a defining characteristic of Mexico’s economic landscape since 2018. Central to this shift is the government’s altered perception, wherein the public sector is not solely viewed as a regulatory entity but as an active participant in economic activities, thereby fostering a growing inclination towards statization. Though property rights are granted in the Constitution as an individual freedom, this ideological shift has put such individual rights on a weaker footing.

In this evolving climate, several endeavors to assert state influence over private enterprises have been initiated, although not all have materialized into full-fledged nationalizations. Notably, instances have arisen where the government intervened in the decisionmaking of private companies, effectively nudging them to relocate their operations according to the state’s regional development agenda. An example is the relocation of a beer factory from the north to the underdeveloped south of the country. This is a concerning trend, wherein the state’s vision for regional development takes priority over the autonomy of private enterprises. This heavy-handed approach not only undermines the principles of competitiveness and private decisionmaking but also poses a direct threat to the fundamental tenets of property rights. Such coercive tactics, veiled under the guise of state-driven development, demonstrate a fundamental disregard for the traditional mechanisms of incentivization and market forces, creating an environment of uncertainty for private property holders.

Companies in the transportation sector, in particular railway concession holders, have recently been the target of government aims to influence private decision making. In May 2023 an attempt was made to expropriate rail infrastructure owned by Grupo Mexico’s Ferromex, to be repurposed for the Trans-Isthmic Corridor project; and in October 2023, the president issued a decree to pressurize concession-holders to invest in passenger trains and being obliged to change their business models to offer passenger services. These events are a window into the government’s approach to the private sector, offering some explanation for the deteriorating business climate and challenges to property rights reflected in the Index.

Preceding the recent developments, the challenges to property rights have long been exacerbated by the pervasive influence of organized crime, particularly through extortion and illegal impositions. This unfortunate reality has only been intensified by the implementation of the “hugs, not bullets” policy, inadvertently providing illicit entities with greater leeway to perpetrate their exploitative activities.

The erosion in freedoms is neither linear nor universal, but the examples above clearly point to some worrisome trends that have contributed to an overall decline in freedoms in Mexico, and which present clear warning signs for the way forward.

From freedom to prosperity

Mexico’s prosperity score has been stagnant since the start of the Index, oscillating between 61 and 63 since 1996 (ranking 90 out of 164 countries in 2022). Its aggregate score is now 4.1 points below the Latin America & the Caribbean regional average. The income indicator is virtually flat at 66.3, while the inequality score is remarkably low (at 15.7, falling from a high of 37.4 in 2002)—23.4 points below the regional average. This is a result of structural low growth, but also of the fact that Mexico had the worst post-pandemic recovery in North America and among the main economies in Latin America.

Mexico’s growth trajectory has not been volatile but rather the challenge has been stubbornly low growth relative to its potential. Data from the International Monetary Fund show an average 2.08 percent year-over-year (YoY) growth since 1990; this compares to 4.3 percent for Chile, 4.2 percent in Peru, 3.4 percent in Colombia, 2.6 percent in Argentina, and 2.3 percent in Brazil—some of whom have experienced very volatile growth trajectories. Unleashing further growth has come as a challenge, despite a sophisticated export sector, sound macroeconomic policy and a resilient private sector. This can be partly explained by the fact that investment as a percentage of gross domestic product (GDP) has for many years lagged behind its regional peers, remaining below 25 percent for most years since the 1990s, even dipping below 20 percent in 2019, according to the National Institute of Statistics and Geography (INEGI). However, some positive signs have emerged, with investment reaching 24.9 percent of GDP in the second quarter of 2023, and a more favorable external environment and positive trends such as nearshoring leading to an increase in private sector investment of 18.1 percent YoY in the first half of 2023, the largest increase since 1993.

Productivity is also an issue. Economy-wide labor productivity and overall productivity lag behind other emerging market G20 economies such as South Korea, Turkey, and Thailand.

The economic liberalization of the country in the 1980s and 1990s—which led to North American economic integration, a sound financial sector, and a much more complex economy—has greatly benefited Mexico, but its impact has not been felt by all regions, sectors, and groups. To put this in perspective, the average growth of the northern and central parts of the country reached 3.1 percent YoY between 2010 and 2019 according to Banxico data, and only 0.06 percent in the south, where most of the country’s marginalized population lives. At the same time, the large proportion of informally employed workers—55 percent of the labor force according to the 2023 labor force survey, only a slight decrease from the 2005 figure of 59 percent—is also a key driver of the inequality gap. Regional gaps in growth and informality contribute to drastically different levels of vulnerability and access to services. For example, states in the north like Baja California Sur, Baja California, and Nuevo León had the lowest percentage of multidimensional poverty as a share of their population in 2022 according to the National Council for the Evaluation of Social Development Policy (CONEVAL) (13.3 percent, 13.4 percent, and 16 percent respectively), while multidimensional poverty rates are significantly higher in the southeast with Chiapas, Guerrero, and Oaxaca (67.4 percent, 60.4 percent, and 58.4 percent respectively) topping the list.

That said, Mexico has made advances with respect to specific social indicators. For instance, the Index highlights significant improvements in education since 2000 (from 27.7 points to 48.1), although health has experienced an enormous decline of more than 5 points since then, dropping back to 78.1 points. Moreover, as the CONEVAL chart in Table 1 shows, the reduction of access to health between 2020 and 2022 happened at the worst possible time: the COVID-19 pandemic.

If we understand prosperity as the absence of social “lacks” (i.e., people’s needs are met), according to the country’s multidimensional measurement of poverty, Mexico has seen relevant improvements for several years, in spite of its low average growth. One of the reasons this has been possible is that there is now an anchor with which to assess the evolution of access to a “sufficient” income, to food and nutrition, health, education, social security, housing and services. Being capable of rigorous measurement helps align institutional aims and policies, which are in turn a prerequisite to effectively address lacks or shortfalls, and promote inclusion and prosperity. The other two vertices of the “prosperity triangle” are strong and sustained economic growth, and sound policies, which have not always been present.

While economic growth over the last five years has averaged just 0.63 percent per year, Mexico has managed to reduce poverty significantly. It has done so by almost quadrupling social program spending from US$8 billion in 2018 to US$30 billion in 2024, and increasing the minimum wage across the country (2018–24) by 182 percent—and by 324 percent in the “free border zone.”

Table 1. Change in deprivations in Mexico (2000-2022)

Source: National Council for the Evaluation of Social Development Policy (CONEVAL)

The future ahead

Mexico continues to preserve key technical and autonomous institutions, which have so far made it resilient to various affronts to political, legal, and economic freedoms, and which have helped the country sustain a basic level of prosperity, as reflected by the Index. However, the negative developments in some indicators should serve as early warning signs, while also pointing to the path forward, if the country wants to advance towards the next stage in democratic consolidation and progress in well-being standards.

The insights above suggest there is a clear path toward Mexico’s advancement on both the freedom and prosperity fronts. These can be summarized in three clear pillars: strong institutions, strong and sustained growth, and well-articulated and effective redistribution policies.

Mexico has a unique opportunity to capitalize on the current favorable external environment and attract investment that can serve as a pull factor for growth. Its sustainability will largely depend on productivity improvements, including to education, reskilling, infrastructure, and energy. The country remains a bastion of free trade in Latin America and holds a strong strategic position, being the United States’ largest trading partner. Amid US-China decoupling, gains from nearshoring could be significant. For the time being, this trend lays more in the expectation than the materialization front. According to Alfaro and Chor, Mexico is sixth in the list of countries to have derived the most market gains from the decoupling of the United States from China between 2017 and 2022. It should be in the top two.

Enormous expectations cannot cohere into more significant material investment commitments if the institutional framework continues to weaken, and this is one of the key risks that could lead to a further deterioration in Mexico’s Index rankings. In many ways, Mexico has de jure maintained the institutions and legal framework to support political, economic, and legal freedoms, including an independent central bank, an autonomous Supreme Court, and an independent National Electoral Institute. But a de facto deterioration is clearly occurring—in the form of political loyalists being appointed to key autonomous institutions, budget and staff cuts, a concentration of power, and a militarization of strategic economic activities. This cycle of deterioration is a risk to freedoms and prosperity in the near term.

In this sense, pendular politics also remains a significant risk, both to institutions and to sound evidence-based policymaking. The country will head to the polls in June 2024 and the signs of polarization are increasing. While disagreement and debate are essential components of a healthy democracy, the current discourse in the country is anything but constructive; and uncertain and ad hoc shifts in policy risk squandering the opportunities to attain strong and sustained growth, as well as improvements in prosperity more broadly.

Undermining institutions, pendular policies, militarization, the absence of solid foundations for strong and durable economic growth, and growing fiscal pressures, are a recipe for failure. On the contrary, policies aimed at strengthening and perfecting our institutional scaffolding, delivering good and sustained policies, ensuring the rule of law, improving competitiveness, enhancing productivity, and maintaining a sound fiscal stance, could make Mexico a success story, grounded on improved freedom and increased prosperity.

Vanessa Rubio-Márquez is professor in practice and associate dean for extended education, at the School of Public Policy, London School of Economics; associate fellow at Chatham House; consultant and independent board member. She is a member of the Freedom and Prosperity Advisory Council at the Atlantic Council. Vanessa had a twenty-five-year career in Mexico’s public sector, including serving as three-times deputy minister (Finance, Social Development, and Foreign Affairs) and senator.

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“Connector economies” and the fractured state of foreign direct investment

Hung Tran — Thu, 22 Feb 2024 14:52:03 +0000

Heightened geopolitical rivalry has led to geoeconomic fragmentation—a development that has been documented by international organizations such as the International Monetary Fund (IMF), World Trade Organization (WTO), and United Nations Conference on Trade and Development (UNCTAD). Most attention has been focused on the fragmentation of world trade. But fragmentation can be observed in the flow of foreign direct investment (FDI) as well. And, like trade, the picture is nuanced: Global FDI flow has fallen as a share of GDP, but a handful of countries have seen an influx.

Geopolitics is rearranging FDI

Geopolitical tension and geoeconomic fragmentation have elevated uncertainty which, together with slow growth, have significantly cut back global FDI flows as a share of economic activity—from 3.3 percent of global GDP in the 2000s to only 1.3 percent in the past five years. In absolute terms, FDI has increased modestly: In 2023, global FDI flows reached an estimated $1.3 trillion or 3 percent more than in 2022.

The slowdown in FDI has disproportionately affected emerging-market and developing countries (EMDCs). FDI flows to developed countries increased by 29 percent, to $524 billion. But flows to developing countries decreased by 9 percent to $841 billion.

These shifts are not driven merely by economic factors: Detailed analysis of almost 300,000 instances of greenfield investment projects from 2003 to 2022 by the Center for Economic Policy Research (CEPR) shows an economically significant role of geopolitical alignment in driving the country allocation of bilateral investments. The friendshoring and nearshoring approaches used to derisk from economic dependencies have significantly affected the pattern of FDI flows of the two main protagonists—the United States and China.

The United States and China

Between 2019 and 2023, FDI flows from the United States to China fell from a 5.2 percent share of total FDI to 1.8 percent—or a drop of 3.4 percentage points of total US FDI outflow. By contrast, shares of US FDI to more geopolitically aligned countries increased—for example, plus four percentage points to India (from 7.6 percent to 11.6 percent); plus 3.4 percentage points to the UAE; plus 2.2 percentage points to Mexico; and roughly plus one percentage point to several Southeast Asian countries such as Malaysia, the Philippines, and Vietnam.

Due largely to the sharp drop of FDI from the United States, total FDI flow to China has declined significantly—from an annual average of $235 billion in the ten years 2011-2020 to $344 billion in 2021, $180 billion in 2022, and only an estimated $15 billion in 2023—mainly due to heightened geopolitical tension and slow growth in China.

Outbound FDI from China has also diminished from a peak of $196 billion or 1.9 percent of GDP in 2016 to $146 billion or 0.8 percent of GDP in 2022. Traditionally, China’s FDI outflow has favored developed countries in North America and Europe (accounting for more than 60 percent of the total) followed by Asia. In recent years Asia’s share has risen. For example, the share of China in ASEAN FDI inflow was 3 percent (8 percent including Hong Kong) in 2016 rising to 8 percent (13 percent including Hong Kong) in 2021. (That is still lower than the 23 percent share of the United States, the biggest investor in the region.) It is important to keep in mind that developing countries have received the lion’s share of China’s international construction projects financed by debt, now totaling $815 billion, mainly through participating in the Belt and Road Initiative (BRI).

The “connector” economies

FDI, especially from competing countries like the United States, Europe and China, have tended to flow to not only geopolitically close countries satisfying friendshoring and nearshoring criteria, but also—especially in the case of Western companies—to those having a minimum necessary political stability, legal, and regulatory environment and manufacturing capabilities including suitable labor supply. As a result, only a dozen or so countries have experienced increased FDI flows from both the United States and China.

In particular, five countries (Vietnam, Indonesia, Mexico, Poland, and Morocco) have been dubbed “economic connectors” by Bloomberg Economics. These countries have combined appropriately calibrated foreign policies and sufficiently developed economic capabilities to navigate geopolitical rivalry and benefit from geoeconomic fragmentation—which has driven the reconfiguration of global supply chains. Basically, they have been able to leverage the friendshoring and nearshoring approaches of the United States and China to attract more greenfield investment from both. They have also increased their exports to the United States (or to the EU in the case of Poland) and their imports (mostly of intermediate goods) from China.

The experiences of the five economic connectors show that there is a pathway for developing countries to navigate geopolitical tension while developing their economies. However, it requires those countries to be able to compete with fellow developing countries to attract trade and investment from either or both China and the United States (and other developed countries). Many may lack the capacity to do so, especially low-income countries and those without natural resources or basic manufacturing capabilities.

In short, the geopolitically driven fragmentation of the global economy has several dimensions: division between developed and developing countries; according to geopolitical alignment; and among developing countries themselves based on their abilities to compete for trade and investment in the reconfiguration of global supply chains. This has increased the complexity of the fragmentation process, probably making it more difficult to measure as well as more costly to the global economy than so far expected. Unfortunately, low-income countries will likely experience the worst outcomes.

Hung Tran is a nonresident senior fellow at the Atlantic Council’s GeoEconomics Center, a former executive managing director at the Institute of International Finance and former deputy director at the International Monetary Fund

At the intersection of economics, finance, and foreign policy, the GeoEconomics Center is a translation hub with the goal of helping shape a better global economic future.

Nonresident Senior Fellow, Scowcroft Middle East Security Initiative

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This year’s bipartisan immigration bill offers a border blueprint for 2025

Thomas S. Warrick — Wed, 21 Feb 2024 14:28:20 +0000

On February 7, the US Senate blocked consideration of a bipartisan compromise proposal for border security and immigration, just three days after its public release. The compromise bill was the result of painstaking, months-long negotiations, and may have a longer shelf life than the past few weeks’ political frenzy suggests. While the bill has some flaws, it was the best achievable, bipartisan approach the United States could get in 2024 to break a decades-long gridlock on border security and immigration policy. This landmark bill is worth understanding because it may be the starting point for major reforms in 2025 no matter who wins the White House and the two houses of Congress in the November 5, 2024 election.

How we got into this mess

To simplify this divisive debate, many Republicans want fewer migrants allowed into the United States. Republicans have particularly focused on what they call “catch and release,” a term Democrats consider pejorative (because it likens desperate people fleeing persecution or economic hardship to fish being caught for sport).

When migrants without visas enter the United States, often fleeing violence and extreme poverty in their home countries, many claim political asylum. Current law says that anyone who is physically present on US territory, no matter where they enter, with or without authorization, can ask for asylum. Border Patrol or other Customs and Border Protection (CBP) officials can deport individuals entering without authorization using an administrative process called “expedited removal” without going to immigration court, but not if the individual asks for asylum. Those asking for asylum are interviewed under a low initial bar that allow them to pursue their asylum claim in the United States through immigration court if they have a “credible fear” of persecution in their home country. However, because there are too few immigration judges and courts, it takes up to five to seven years to adjudicate most asylum claims. The federal courts will not allow most migrants without visas to be kept in detention for such a long period, because they have not been found guilty of a crime and there are not enough detention beds for millions of asylum applicants. This is especially true of family groups with minor children, for which judicial decisions against long-term detention are even more strict. Hence, judicial decisions require asylum applicants to be released until their cases are heard by an immigration judge.

However, current law says applicants cannot legally work in the United States until six months after they file their asylum claim in immigration court or with the Department of Homeland Security’s (DHS’) US Citizenship and Immigration Services (USCIS)—a restriction in the law that is not subject to adjustment either way by the executive branch. Until migrants get a work authorization document from USCIS or a decision on their asylum claim, most depend on public aid, funds from relatives, friends, or charities, or work without legal authorization. Currently, more than half of all asylum applications are denied, but many migrants get to live and work in the United States for years until they receive that final decision and, even then, many will not be sent home. This is what entices more than a million migrants a year to pay rapacious human-smuggling cartels so they can make a dangerous, costly trek north through Central America and Mexico to arrive at the southwestern US border.

Democrats and migration advocates, for their part, see the United States as a safe haven for those fleeing persecution and desperate poverty, and say the United States can and should allow asylum claims at the US border. Most Democrats also want to see those who came to the United States without authorization as children receive legal status and a pathway to citizenship. A significant number would extend this offer to law-abiding, hard-working adults who are already here. Most Republicans oppose any kind of what they call “amnesty” for those who came to the United States without authorization. Some businesses, however, see a benefit to having more workers in the United States, especially for low-wage service jobs.

US public opinion, in broad terms, wants to see an immigration system that is both just and fair—allowing deserving applicants to get asylum, while denying entry to those without a valid legal claim.

President Joe Biden was elected in 2020 after campaigning on reversing the restrictive immigration policies of the Donald Trump administration—but the Biden administration did not request additional resources to process large numbers of additional migrants. Starting almost as soon as Biden signed new immigration executive orders on January 20, 2021, congressional Republicans demanded the administration stop the increasing numbers of migrants who began arriving without visas at the US southwest border. In April 2022, the Biden administration released a detailed plan to address the rising numbers, but did not request additional funding for it. As the COVID-19 pandemic eased in 2022, the Biden administration prepared to rescind the authority under federal public-health law used by the Trump administration to turn many migrants away without giving them a hearing on their asylum claims. (Legal challenges to those Trump policies were before the Supreme Court in January 2021, but were dropped after the Biden administration reversed some of the policies.) The Biden administration announced a number of post-pandemic new steps in January 2023, which took effect in May. As has happened in the immediate aftermath of every major immigration policy change in the Obama and Trump administrations, the numbers of migrants initially went down, but then began to increase.

Significantly—and unfortunately—the June 2023 budget deal between Biden and then-Speaker of the House Kevin McCarthy (the “Fiscal Responsibility Act of 2023”) put fiscal restraints on the budgets of the departments of Homeland Security, Justice, Health and Human Services (HHS), and State—the departments that collectively fund the border and immigration system. For 2024 and 2025, the only way these departments can get additional funds to address growing needs is through emergency supplemental appropriations.

Understanding the Biden’s administration’s groundbreaking October border supplemental

On October 20, the Biden administration submitted a $105 billion supplemental spending request for Ukraine, Israel, and the Indo-Pacific, including $13.6 billion for border security and immigration. This package responded to Republican demands to condition more money for Ukraine’s defense on the Biden administration doing more about the southwestern border. Unlike regular budget submissions, in which each cabinet department lays out its separate request—making it difficult to see how cross-department programs support each other—this time the administration buried at the end of a detailed fact sheet an excellent laydown that showed with clarity how all the parts of the administration’s border supplemental request worked coherently. The administration wanted to do six things together:

Address the delays in processing asylum and other cases by increasing the number of immigration judge teams by 375, around a 60-percent jump.
Give CBP an additional $4.5 billion for expanded operations, including money for Federal Emergency Management Agency (FEMA) grants to local governments and nongovernmental organizations to provide shelter and services to migrants who were released after being given a notice to appear for their asylum hearing. This would help take the burden off states and cities that otherwise would need to provide aid for these migrants, because most applicants could not legally work. CBP would also get $849 million for inspection technology to detect smugglers trying to get migrants, drugs, and contraband into the United States.
Provide additional government attorneys to process the increased number of asylum cases, and for additional investigators and other personnel, via $2.5 billion for the DHS Immigration and Customs Enforcement (ICE).
Add asylum officers and technology to more quickly handle the increased workload of processing claims, with $755 million for DHS’ USCIS.
Increase funds for law-enforcement agencies—including the Federal Bureau of Investigation and the Drug Enforcement Agency—for support functions, including testing DNA to ensure that adult migrants were not making false claims about being related to the children traveling with them.
Increase migration and refugee-assistance programs at the Department of State by $1.3 billion.

The administration’s logic was to increase the capacity of the entire system that processes asylum and other immigration claims, thus shortening the time that applicants waited for a hearing and reducing the societal burden on supporting migrants until they got decisions in their individual cases. The additional funding for enforcement—and for people, technology, and programs to address smuggling of people and illegal drugs like fentanyl—was intended to respond to both Republican and Democratic concerns.

Administration officials testified before the House and Senate appropriations committees, conducted private briefings on Capitol Hill, and spoke to professional organizations, but did not embark on a major, nationwide public-outreach program to explain the logic of the border and immigration appropriations package to the US public.

Figure 1: Cases pending before immigration courts, fiscal years 1998-2022

If anything, the administration’s border and immigration supplemental could be criticized for not being large enough to erase the growing backlog in asylum cases that began to accelerate during the Trump administration. (See Figure 1.) The best available public study of immigration-court capacity said that to erase the backlog of cases that existed at the end of Fiscal Year 2022 would require increasing the number of immigration judge teams by two hundred each year for five years—implying that the administration’s request for 375 immigration judge teams needed to be thought of as a down payment, not an end state. The total number of pending asylum cases is now even greater, more than three million, likely requiring even more immigration judge teams to resolve the backlog over a five-year period.

Understanding the landmark bipartisan Senate compromise bill

After more than ten weeks of intense negotiations, the bipartisan Senate compromise bill that emerged was the first serious effort in more than a decade to do what Congress has almost never done on border security and immigration: combine major policy changes with the resources required to make those changes succeed. Congress traditionally separates authorizations and appropriations into separate committees that jealously guard their turf. As an Atlantic Council study in December 2020 explained, congressional responsibility for the homeland security enterprise is divided among eleven major committees in the House and nine in the Senate. The executive branch is little better, with four major cabinet departments having important roles (DHS, Justice, HHS, and State) and major policy decisions led by the National Security Council and the Domestic Policy Council, but funding decisions controlled by the Office of Management and Budget. As a previous Atlantic Council report highlighted, aligning policy and resources is a chronic problem in the homeland security enterprise. The bipartisan Senate supplemental, negotiated by key senators with Homeland Secretary Alejandro Mayorkas and the White House, represented a landmark in uniting policy changes with increases in resources that are needed to make the policy changes work.

First, on the resource side, the bipartisan Senate compromise proposed to appropriate more money for border and immigration security ($20.3 billion) than the administration requested ($13.6 billion). The bipartisan bill also made major shifts in how that money was allocated.

Some of these shifts were fundamental, and reflected Republican skepticism about how migration cases should be processed faster and more efficiently if the compromise version had passed.

The Department of Justice’s request was cut substantially, but preserved a significant increase of approximately a hundred immigration judge teams. This reduction in judicial capacity from the administration’s October request was offset by an increase in the number of USCIS asylum officers, who would have begun to process cases under the negotiated policy changes for newly arriving migrants who otherwise would have had to wait years for an available immigration judge to hear their legal claims.
ICE would get more than three times the requested amount, with the additional funding going to increase the number of personnel, increase detention space to 46,500 beds, and increase the number of removal flights to return migrants whose claims are denied. To fully unlock the full appropriation, ICE would need to report to Congress that it has increased detention space and the number of removal flights.
USCIS would get substantially more than initially requested to increase the number of asylum officers who, under the new rules made possible by the compromise, could make decisions in most asylum cases.
The compromise version substantially cut funding for supporting migrants awaiting hearings, but still proposed to give FEMA $1.4 billion from CBP for the shelter and services program for migrants awaiting a decision—which, under the new policy changes, should take six months rather than five to seven years.
The Department of State did not get as much as it requested for migration and refugees, and much of the funding it would have received was to increase the capacity of Latin American countries to receive returning migrants whose claims were denied.

The policy changes in the bipartisan Senate version were compromises intended to bring on both Republican and Democratic support:

No longer would there have been a low bar that allows most asylum applicants to stay in the United States for years while waiting for an immigration judge to hear their case.
Instead, thousands of USCIS asylum officers would have made faster decisions on most asylum cases, ideally within six months, without waiting years for the case to be reviewed by an immigration judge. All asylum applicants would have undergone thorough security vetting. Each applicant would need to prove to the asylum officer by “clear and convincing evidence” that they qualify for asylum. The expectation, based on experience, was that most applicants would not qualify for asylum, but those who are found eligible would get immediate work authorization so they can support themselves.
Asylum applicants would get the right to counsel, but at their own expense. (Children and those deemed incompetent would be eligible for government-provided counsel.)
There was a limited appeal option for applicants whose requests were denied, but most cases would not have to be heard by courts. Those found not eligible for asylum would have been removed from the United States. ICE would have had significantly greater resources to carry out removals of those who did not qualify for asylum protection under the Convention Against Torture or other US laws.
If the number of inadmissible migrants exceeded 8,500 in a single day, or five thousand a day over a seven-day period, the bill would have required the Secretary of Homeland Security to “close” the border to asylum claims. Migrants could still claim protection under other US laws, such as the Convention Against Torture, but the standard of proof for such claims is higher and very few migrants qualify for it. Based on current levels of migrants arriving at the southwest border, the border would have been “closed” to asylum claims for most of the past four months, according to those involved in the negotiations.
Afghan allies resettled in the United States after the August 2021 US withdrawal from Afghanistan would have been allowed to stay and become permanent residents after they passed security vetting.
The bill would have required additional training for Border Patrol officers, improvements in ICE’s “alternatives to detention” program, and upgrades to technology at CBP and USCIS.
USCIS and ICE would get streamlined hiring authorities to hire the thousands of new officers and agents required to implement the bill.

The bipartisan Senate bill went a long way toward addressing long-time Republican concerns. If the bill had been passed and implemented (and funded) in subsequent years, it would have significantly reduced the use of “catch and release” because those migrants who qualified for asylum would get a much faster determination and be eligible for work more quickly. Those not eligible would have been removed from the United States much more quickly than at present.

For Democrats, the compromise bill did not address important issues like adults who came to the United States as children without authorization—called Dreamers, from the proposed Development, Relief, and Education for Alien Minors (DREAM) Act. Many Democrats also objected to the new asylum restrictions. However, for Democrats and migration advocates, the bipartisan Senate compromise promised faster determination of asylees’ eligibility and additional resources, including faster work authorization, to integrate those eligible into US society. This represented a significant improvement over the present situation, in which cities are being overwhelmed by needing to support those awaiting their court dates.

The bipartisan Senate compromise, while a definite improvement over the alternative of current funding levels and nothing else for a year, did have its flaws and limitations.

The most serious concern was that the additional resources would not be sufficient to process all asylum applicants within six months of arrival. But even if more personnel and resources would ultimately have been required, the compromise bill was an important first step.
The system set up by the bill would have taken at least two years to become fully operational—hiring and training the additional officers, agents, judges, and other personnel, buying the additional screening technology, and expanding needed facilities. In the meantime, the backlog of three million cases would not be reduced, and might increase further.
The bill did not clarify the status of migrants already here, leaving millions of people in limbo for years, waiting for their claims to be heard. There is no bipartisan consensus on what to do about this.
The bill tried to prioritize dealing with the current influx of new arriving migrants and did not have a clear plan or the resources to address the backlog of more than three million pending immigration cases. Even so, the compromise was a rational approach to the increasing numbers of migrants arriving every week. In an ideal world of bipartisanship, additional work would need to take place to develop an approach for eliminating the current backlog of cases.
One of the most fundamental problems with the bipartisan Senate bill was that it did not end the incentives for people to pay smugglers to get them to the US southwest border. To be fair, a small group of senators trying to negotiate a complex legislative package has limits on what it could try to achieve in ten weeks. But the bipartisan Senate bill can be fairly described as treating the symptoms of the problem, not the underlying condition. Even so, as doctors say, the first priority is often to stabilize the patient before treating the underlying conditions. There are three approaches that could help with the underlying conditions.
- Since July 2021, the Biden administration has had a “root causes” strategy, directed by Executive Order 14010, focused on reducing the “push” factors that drive migrants to leave home and make the dangerous and (to them) expensive journey north. Republicans, in particular, are leery of Democratic efforts to address the root causes of what is a global migration crisis. It is true that violence, extreme poverty, and the effects of climate change on agriculture are driving millions of people worldwide to believe they have no choice but to leave their homes in Latin America, Africa, the Middle East, or South Asia and come to the United States, Europe, or richer countries in Asia. Solving the root causes driving global migration will take a decade or more, at a global price tag that starts in the hundreds of billions of dollars, and there is no bipartisan consensus in Congress ready to take on even a significant part of this challenge.
- Deciding who is eligible for asylum before migrants arrive at the southwest border would be a more practical, but still ambitious, approach. The Biden administration proposed this as a policy initiative and set up small “Safe Mobility Offices” in Guatemala, Costa Rica, Ecuador, and Columbia that are under-resourced but starting to show promise. However, the administration has not put forward publicly a comprehensive plan (that is, policy plus personnel plus resources plus legislative language) comparable to the October border supplemental or the bipartisan Senate bill. Under this approach, people in Latin America could appear before a US official in their home country, or at least in a nearby safer country, and get a binding determination of their eligibility for asylum before they travel thousands of miles in the hands of dangerous smuggling cartels. Setting up asylum “overseas processing centers” in countries like Colombia, Panama, or Mexico would probably be more efficient and less costly overall than dealing with more than one million people per year coming into the United States who are hoping they can win their cases—when the reality is that very few will succeed. (The United States currently does almost all refugee interviews and processing overseas, so there is precedent for this model.) Overseas processing centers for asylum applicants would take several years to develop, and each center would effectively become a small “American” city of several thousand US or international citizens (including US asylum officers, support staff, and security) in the middle of Mexico or several Central American countries. This would require negotiations comparable in complexity to setting up a US military base in a foreign country—which the United States has done many times. Even if a civilian overseas processing center is less expensive than a military base, three or four would likely cost tens or hundreds of millions of dollars each once salaries, housing, and facilities are included.
- Tackling the criminal cartels responsible for most of the smuggling is another line of effort the Senate compromise did not emphasize. This would require increased efforts by US and Latin American law enforcement, military, intelligence, judges, and prisons. The limited success the United States has had against narcotics cartels shows that this will not be easy.

The shifting politics

The idea of joining a year’s worth of military assistance to Ukraine and Israel to more money for border security and migration arose in late 2023 after it became clear Ukraine would need more help against Russia’s invasion, Israel would need help after Hamas’s October 7 attack, and increasing numbers of migrants were continuing to arrive at the US southwest border after the end of the pandemic. Under the Biden-McCarthy budget deal, the only way to get additional funds was through an emergency supplemental appropriation.

In late November, Republicans said they would require immigration policy changes as a condition for passing additional military assistance to Ukraine. Over the next ten weeks, a group of Senate Republicans and Democrats, with participation from Mayorkas and White House officials, worked on what became the bipartisan compromise announced February 4. The secrecy of the talks had many stakeholders worried their core interests and values were at risk. In hindsight, it appears that the secrecy was what made compromises on several key points possible.

However, in mid-January, with the release of the bipartisan Senate compromise imminent and following a White House meeting with congressional leadership on the overall package, the table was overturned when former president and likely Republican presidential nominee Donald Trump said social media “I do not think we should do a Border Deal, at all, unless we get EVERYTHING needed to shut down the INVASION of Millions & Millions of people, many from parts unknown, into our once great, but soon to be great again, Country!”

This provoked a reaction from the former president’s supporters, leading Speaker of the House Mike Johnson to call the deal “dead on arrival” even before details had been released. Senate Republican leader Mitch McConnell, after initially supporting the bill when its text was rolled out on February 4, said on February 5 that Republicans should vote against a procedural vote scheduled for February 7. Biden addressed the nation on February 6, calling for public support for the bipartisan Senate compromise. A key procedural vote in the Senate to move the bill forward, which needed 60 votes, failed 49-50. On February 11, the Senate voted 67-27 to move forward with the Ukraine, Israel, Indo-Pacific, and humanitarian packages—everything except border security and immigration.

The debate on the Senate compromise was significantly affected by misinformation (and disinformation) about the bill’s provisions. Most notably, the bill’s number of five thousand inadmissible migrants who would trigger the border being “closed” to asylum seekers was twisted into the idea that five thousand inadmissible migrants would be allowed into the United States. (See above for the details of how this would really have worked.) The reality was that those five thousand migrants would be subjected to the full panoply of security checks and legal requirements for asylum, so that only the small number actually eligible for asylum would actually be allowed to stay in the United States. This provision started, ironically, from a Republican demand that the Biden administration “close the border” whenever there were large numbers of migrants trying to cross without authorization, and the five-thousand figure was a compromise that Democrats could accept in order to write the authority into law. (Democrats were no doubt aware that a future Republican administration would almost certainly use this authority.) Biden said on January 24 he would use this authority. Republicans claimed he did not need additional authority, but the Republican interpretation would be open to judicial challenges, whereas Section 244B(f) of the bipartisan compromise would have significantly narrowed the courts’ ability to overturn such a determination. This kind of attention to detail was largely lost in the claims by the compromise’s opponents.

Make no mistake: A year of not having additional resources to deal with the current numbers of arriving migrants will further severely strain the nation’s immigration system. Officials in cities like New York and Denver are saying they are at a breaking point. ICE is talking about having to release detainees to cover a $700 million shortfall. CBP will have to pull money away from increasing processing capacity for cargo and arriving lawful travelers—increasing delays and holding back the US economy. Taking away funds needed by FEMA for disaster relief will directly hurt the millions of US citizens who suffer from natural disasters and have nowhere else to turn. Strains on CBP and ICE personnel will likely increase turnover as many leave for other, less stressful law-enforcement positions. While Trump said he will run on his vision for border security, Biden said on February 6 that Democrats will ask voters to hold Trump and Republicans responsible for blocking the Senate compromise.

The prospects for either side getting a better deal after the November 2024 election are limited. If Biden is reelected, expectations are that he will still face a closely divided Congress, and the problems with the border and immigration system will likely have grown worse with congressional inaction during 2024.

If Trump is elected, his December 2023 vow to be a “dictator” on “day one” and close the US border should be taken seriously. Doing this through executive authority alone would lead to immediate court challenges, because the right to claim asylum is written into federal statutes. Even if Trump then demanded that DHS and Justice Department officials defy federal court orders and promised those officials pardons if they carried out his instructions, my assessment is that few federal officials outside of Trump’s immediate orbit would do it. They likely would not want to jeopardize their post-Trump careers by defying federal court injunctions to enforce existing laws that allow asylum applicants to remain in the United States until their claims are heard by an immigration judge. Courts and Democrats are likely to slow down some of Trump’s most ambitious plans. Democrats will point to the 2024 bipartisan Senate compromise as the best offer a Trump administration may get if it needs Democratic votes to pass a budget or statutory changes.

It is always possible that whoever wins in November 2024 will overreach in 2025 on immigration policy and a one-party approach in 2025 will go nowhere. It is also possible that the outcome of the failure of the bipartisan Senate proposal in 2024, plus a year of inaction, may convince a supermajority in the Congress that a bipartisan approach is essential, desirable, and unavoidable.

Thus, the details of the bipartisan Senate compromise could well become the starting point for talks in 2025.

Recommendations

Two core ideas of the bipartisan compromise should be maintained:
1. Resource decisions and policy decisions on border security and immigration need to be linked—advancing one without the other will not work.
2. In the absence of truly comprehensive immigration reform, increased funding for the back-office functions to process asylum and other immigration cases within weeks, not years, is essential. This will provide both Republicans and Democrats with important parts of what they want: an end to “catch and release” and an immigration system that is just, fair, and reflects US values.
The Biden administration should adjust its budget numbers for Fiscal Years (FY) 2025 and 2026 to include ramping up the hiring of additional officers, agents, judges, and support personnel needed to implement something like the bipartisan Senate compromise with the goal that something like the 2024 bipartisan compromise can be enacted sometime in late FY 2025. These additional personnel are needed to address the current backlog and numbers of arriving migrants, even if the policy changes could not be made. Hiring and training more people will take time to implement—and should be ramped up as soon as possible.
For future federal budget negotiations, the Biden administration should make funding for the Department of Homeland Security part of the “revised security category” that currently includes only military spending (budget account 050). This may sound technical, but it would have fundamental, far-reaching consequences to strengthen US security. Future negotiations between a Democratic White House and a Republican-led house of Congress (whether the House or Senate) are likely to involve tradeoffs between security spending and domestic spending. This was the essence of the negotiations during the past decade, including the Fiscal Responsibility Act of 2023. However, the 2023 budget deal ended up pitting more funding for homeland security against other domestic spending priorities. Instead, both Democrats and Republicans would benefit politically from thinking of border security and immigration as integral to the security of the United States, so no one thinks of DHS as a “non-security” program during federal budget negotiations.
The Department of Homeland Security and the homeland security enterprise need to think of their mission as: “We lead the defense of the nation against non-military threats.” To the greatest extent possible, both DHS and the homeland security enterprise need to become more nonpartisan and “above politics.” This was a core recommendation of the Atlantic Council’s Future of DHS report in September 2020. It remains valid today.
As a long-term goal, DHS and the homeland security enterprise will be better off separating from the most partisan, toxic aspects of immigration policy. At one time, monetary policy was one of the most divisive issues in US politics. Most college students who take US history courses hear of William Jennings Bryan’s famous 1896 “cross of gold” speech, with few understanding the parallels between the divisiveness of monetary policy then and immigration policy today. It took the Federal Reserve Act of 1913 to take the bulk of monetary policy out of the hands of Congress and the White House. Congress set broad goals—currency stability and full employment—and then let the Federal Reserve Board decide how to balance both goals. Over the past century, admittedly with some dramatic ups and downs, the US economy has led the United States to a level of prosperity and security without precedent in human history. Something comparable for US immigration policy could help drive both security and prosperity for the next century.

About the author

Fellow

Thomas S. Warrick

Forward Defense Rafik Hariri Center & Middle East programs

National Security Terrorism

Forward Defense, housed within the Scowcroft Center for Strategy and Security, generates ideas and connects stakeholders in the defense ecosystem to promote an enduring military advantage for the United States, its allies, and partners. Our work identifies the defense strategies, capabilities, and resources the United States needs to deter and, if necessary, prevail in future conflict.

The post This year’s bipartisan immigration bill offers a border blueprint for 2025 appeared first on Atlantic Council.

With elections in Mexico and the US, 2024 is a pivotal year for North American trade

Luz María de la Mora — Mon, 22 Jan 2024 14:53:40 +0000

January 1 of this year marked the thirtieth anniversary of North America’s most ambitious integration project, the North American Free Trade Agreement (NAFTA). This trade deal was renegotiated into the United States-Mexico-Canada Agreement (USMCA), which entered into force in July 2020. For Mexico, the past three decades of North American trade have been transformative, and Mexico is now the United States’ largest trade partner. In Mexico, there is no doubt about the importance of maintaining the commercial relationship with the United States and Canada to boost economic growth and create well-paid jobs.

At the same time, 2024 will be pivotal in determining the agreement’s future. The governments elected in Mexico on June 2 and in the United States on November 5 will be responsible for conducting an important review of the USMCA scheduled for July 2026. The priority both countries’ leaders give to the agreement and the vision they adopt on integration will determine Mexico’s commercial relationship with its partners in the region going forward. The best way for Mexico to protect its economy and its North American trade relationships is by ensuring compliance with its USMCA commitments before 2026, reducing the pressures that it might be subject to from the other parties in the review.

How does the USMCA review process work?

Unlike NAFTA, the USMCA considered the possibility of the agreement coming to an end. Indeed, in Article 34.7 (Review and Extension of Validity), the agreement establishes a validity period of sixteen years (until June 30, 2036), but also a review clause in the sixth year (July 1, 2026). This sixteen-year period can be modified if the three countries confirm, in the sixth year, their intention to extend the USMCA for another sixteen years (until 2042).

However, the USMCA also considers the possibility that the parties do not agree to extend the life of the agreement in the sixth year. If they don’t, this leads to a periodic review of the treaty between the sixth and sixteenth year. During these ten years, the three countries can agree, at any time, to extend it an additional sixteen years.

These conditions were imposed by the United States during the renegotiation of NAFTA, reflecting the Trump administration’s unilateral and often protectionist vision for North American integration. The conditions also speak to the United States’ interest in ensuring that its partners offer greater concessions in each review.

What to expect from the review

First, the review of the USMCA is uncharted territory and can generate great uncertainty. There is no other trade agreement in which Mexico, the United States, or Canada face such conditions for extension. Uncertainty about the agreement’s permanence goes against the purpose of creating a legal framework that offers security to businesses. The mere possibility of the agreement having its validity cut short can raise doubts for companies about their investment decisions, particularly in Mexico, as it cannot guarantee long-term preferential access to the markets of the United States and Canada.

The trade war between the United States and China and US “nearshoring” efforts have allowed the issue of the agreement’s survival to appear secondary. However, this issue can’t just be swept under the rug. To mitigate this situation, Mexico must work hard to create an economic environment that provides greater certainty than what the USMCA offers and encourage investments even in a context where the agreement does not guarantee its long-term existence.

Second, 2024 will set up what could happen in 2026. The USMCA establishes that in the sixth year since its entry into force, the Free Trade Commission will meet to review its operation and consider any recommendation presented by a party “at least one month before the joint review meeting of the Commission takes place.” The governments of the United States and Mexico elected in 2024 will be responsible for reviewing the commitments made in 2026. Last December, the chief executive officer of the Canadian Chamber of Commerce, Perrin Beatty, urged Canadian Prime Minister Justin Trudeau to start work on this first review in 2024. For Mexico, the inauguration of a new government in 2024 represents an opportunity to carefully analyze its USMCA implementation, make necessary adjustments, and demonstrate its commitment and interest in being part of this agreement.

Any US administration is likely to seek to ensure that its partners meet their commitments. However, in the case of a Democratic administration, expect that the United States will continue to prioritize labor issues under the Rapid Response Labor Mechanism, a dispute settlement provision in the USMCA. For Mexico, the review could lead its partners to point out a long list of noncompliance and pending issues, such as “telecommunications, biotechnology, medical devices, food labeling, energy, customs and trade facilitation, and electronic payment services, among others.” Mexico will also have the opportunity to request that the United States comply with the determination of the USMCA rules of origin panel, which it has so far ignored. Therefore, when the new Mexican government takes office this October, it is vital that it quickly undertakes a comprehensive review of compliance with the USMCA and, above all, work to ensure that the three partners agree to extend the validity of the agreement for sixteen more years.

Third, it is important to establish that a review is not a renegotiation. Recently, some trade experts have talked about the 2026 review as a potential renegotiation of the agreement, which is unnecessary and undesirable. The USMCA is a broad and deep agreement that has barely been in force for three-and-a-half years. According to the USMCA text, reviewing means verifying the operation of the agreement. The treaty does not mention the possibility of renegotiating, which would entail a more complex process, requiring authorization from the US Congress and notification to the Canadian Parliament. A renegotiation would likely require concessions in all areas covered by the USMCA to ensure access to the markets of all three partners. It is crucial that the agreement’s provisions mature before its substance is changed once again. The review should result in a stronger agreement and ensure that the three countries fully meet their commitments.

This will be a year of intense political debates. Migration and drug trafficking will be two key challenges in the Mexico-United States relationship. Although trade has taken a backseat to these issues, Mexico is an important partner in “nearshoring” and strengthening manufacturing in the United States and North America as a whole. As of October 1, 2024, the new Mexican government will have the responsibility and the opportunity to demonstrate its true commitment to the USMCA and to North American trade. Mexico must position itself as a reliable and committed partner in regional integration and try to ensure a smooth 2026 review process. This could be achieved with Mexico advancing public policies and taking actions consistent with the commitments agreed to in the treaty.

Luz María de la Mora is a nonresident senior fellow with the Atlantic Council’s Adrienne Arsht Latin America Center, where she supports the Center’s Mexico work. From December 2018 to October 2022, she served as undersecretary of foreign trade in the Mexican Secretariat of Economy, during which she helped implement the USMCA.

The post With elections in Mexico and the US, 2024 is a pivotal year for North American trade appeared first on Atlantic Council.

2024 predictions: How ten issues could shape the year in Latin America and the Caribbean

Adrienne Arsht Latin America Center — Fri, 12 Jan 2024 22:22:24 +0000

2024 will be a highly consequential year for Latin America and the Caribbean, both politically and economically.

Following global trend lines, significant shifts in Latin America and the Caribbean—including presidential elections in Ecuador, Guatemala, and Argentina, unprecedented agreements with the Venezuelan government, a worsening security situation in many countries, and a pressing focus on climate change—set the stage for even more change to come in 2024.

Join the Adrienne Arsht Latin America Center as we explore top questions that may shape this upcoming year in the hemisphere.

What will the region’s newest presidents accomplish? How might Latin America’s ties with countries such as China and Russia evolve? What might be the role of the United States in an election year? Will the Caribbean see new, international attention to the specific threats faced by major climatic events?

Take our quiz to find out if you agree with what we’re predicting!

New Atlanticist Jan 10, 2024

Ecuador has declared ‘internal armed conflict’ against criminal gangs. What’s next?

By Isabel Chiriboga

Ecuadorian President Daniel Noboa has mobilized the military to fight criminal groups in his country, following two notorious criminal leaders’ escape from prison.

Civil Society Conflict

Report Nov 30, 2023

Advancing US-Colombia cooperation on drug policy and law enforcement

By Atlantic Council US-Colombia Advisory Group

Consumption and price of the drug has remained stable in the United States in recent years. However, the current trend of falling coca leaf and cocaine prices in Colombia present a natural incentive for coca growers to find alternative forms of income, which could mean a higher rate of success for alternative development programs.

Civil Society Colombia

Issue Brief Sep 26, 2023

A roadmap for the Caribbean’s energy transition

By David Goldwyn, Eugene Tiah, and Wazim Mowla

Caribbean countries are in desperate need of an energy transition. Disproportionately high electricity costs impede economic development, stress public finance budgets, and harm the competitiveness of tourism and other industries.

Americas Caribbean

The post 2024 predictions: How ten issues could shape the year in Latin America and the Caribbean appeared first on Atlantic Council.

Violence against journalists: A tool to restrict press freedom in Mexico

Sergio M. Alcocer and Jeziret S. González — Mon, 18 Sep 2023 15:00:00 +0000

All essays

Freedom of expression includes freedom of the press and access to information to promote social progress and better standards of life. Without these freedoms, democracies are not complete, and other human rights may be in danger.

Reporters Without Borders (RSF, by its Spanish acronym) defines press freedom as “the ability of journalists, as individuals and collectives, to select, produce and disseminate news in the public interest independent of political, economic, legal and social interference and in the absence of threats to their physical and mental safety.”

Press freedom is included in the Atlantic Council’s Freedom and Prosperity Indexes, as part of the civil liberties indicator in the Political Freedom Index. Mexico, considered Mostly Free, ranks 82nd of 174 countries included in the overall Freedom Index, with a score of 58.2 out of 100. Regarding Political Freedom specifically, it ranked 88th, scoring 60.8 out of 100.

Mexico is very different to its neighbors to the north: the United States had an overall score of 79.2 and Canada 87.8, ranking them at 29th and 11th respectively in the Freedom Index. One southern neighbor, Belize, also outperforms Mexico on this Index, scoring 61.9 in 2021, although Mexico came out slightly ahead of Guatemala, which scored 54.3 in the same year.¹

In this chapter, we analyze press freedom in Mexico, considering the socio-territorial particularities and political landscape of the country. Specifically, our analysis includes the presence of drug cartels and transnational criminal organizations (TCOs) throughout the territory, the levels of marginalization, and the Mexican president’s stance on the press.

Another objective of this chapter is to examine the outcomes of the Protection Mechanism for Human Rights Defenders and Journalists that the Mexican government implemented to confront violence against those who seek to uncover the truth and uphold human rights. In addition to the diagnosis made by the Office in Mexico of the United Nations High Commissioner for Human Rights,² an anonymous interview was conducted for this research with a journalist who requested protection under the Mechanism and experienced, first-hand, its advantages and limitations.

According to the UN Educational, Scientific and Cultural Organization (UNESCO), fifty-five journalists were murdered worldwide in 2021, seven of them in Mexico.³ Journalists work to strengthen public interests, including freedom of expression, but unfortunately their integrity is often violated in different countries and under different circumstances. The past decade has revealed new trends. Long ago, murders of journalists occurred mostly in countries experiencing armed conflicts; but now, they are regularly committed in countries at peace, in two regions in particular: Asia-Pacific and Latin America. Most of these murders are committed in countries with large social inequalities and/or high rates of violence and crime.

Article 19 of the Universal Declaration of Human Rights established that everyone has the right to freedom of opinion and expression.⁴ This right includes the freedom to hold opinions without interference and to seek, receive, and impart information and ideas through any media, regardless of frontiers.

In Mexico, press freedom has been recognized by law since 1917 when the current constitution was enacted; nonetheless, censorship comes in the shape of threats and direct attacks from both sides: organized crime and the authorities. Also, new technologies add a different dimension: on one hand, they offer the possibility of a broad and rapid distribution of information, but on the other, journalists are exposed to online threats and harassment—and even to surveillance, making them and their informants more vulnerable. The low cost and high quality of surveillance technology mean these tactics are very easy and cheap to implement.

It is also worth noting that most of the media in Mexico are in the hands of big national companies, which makes it difficult to rely on the quality of the news. But not only that, since the election of President Andrés Manuel López Obrador (AMLO) in 2018, he has started a campaign against journalists, whom he accuses of supporting the political opposition, calling them “biased,” “unfair,” and “the scum of journalism.”

Mexico is considered one of the deadliest and most dangerous countries for journalists; a correlation between levels of organized crime and violence perpetrated against journalists is evident. From 2000 to 2022, 163 journalists were murdered in Mexico, thirty-eight of those during President AMLO’s tenure.⁵ Moreover, most of the killings occurred in states where some of the most prominent drug cartels operate.

To protect journalists and human rights defenders from continued violence, the Mexican government launched a program in 2012 called the Protection Mechanism for Human Rights Defenders and Journalists.⁶ Although the Mechanism was deployed ten years ago, 2022 became the deadliest year for journalists in that period, proving that it has not been enough to safeguard journalists’ lives. In the following section we will describe the context of Mexican journalism, and discuss the Mechanism’s impact, ten years after its implementation.

Mexico and its press, in context

Mexico is a country of 126 million people, with 43.9 percent living in conditions of poverty. Twelve of Mexico’s thirty-two states have more than 50 percent of their population living in poverty.⁷ Also, Mexico is multicultural, with seventy-one indigenous groups representing more than seven million people who speak an indigenous language. Social, cultural, and economic inequalities are, as expected, concentrated in those indigenous groups, and disproportionate numbers live in states where illegal drugs are either produced or transported. Also, it is well known that corruption is a major problem in the country. Even though the current federal government declared it to be one of its top priorities, results show that actions have been too weak. The Mexican Institute for Competitiveness (IMCO), a non-partisan, nonprofit public policy research center, created its own Corruption Risk Index, focusing on public procurement by analyzing 260 institutions from 2018 to 2021. IMCO’s key findings included that federal institutions do not prioritize public bidding processes, that contract documents are often unavailable, and that contracts are frequently awarded to risky suppliers.⁸

Along with poverty and corruption, Mexico has another major problem: transnational criminal organizations (TCOs), commonly referred to as “drug cartels” and “drug trafficking organizations” (DTOs). In 2006 the federal government launched a war against DTOs, fragmenting the larger and more stable organizations and sparking greater violence. TCOs are not limited to producing and/or transporting drugs; instead, or in addition, they are responsible for kidnappings, extortion, and inflicting terror on communities.

With prevailing poverty, corruption, and organized crime, national, regional, and local governance is poor. The press, thus, plays a central role in bringing relevant information on the most important local and/or national issues to public attention. Whether those issues include corruption in some government office or illegal activities of organized groups in a village, journalists are exposed to a very volatile, highly dangerous environment.

Television is the most important format for news media in Mexico, but there is also radio, journals, magazines, blogs, and social media. There are dozens of national news media outlets, but broadcasting is controlled by Televisa, which in 2021 merged with US-based Spanish-language network Univision. There are seventy daily newspapers, twenty-four radio stations, and forty-four websites, all of them led by the Mexican Editorial Organization.⁹ Grupo Imagen is also an important multimedia conglomerate; other actors include newspapers such as El Universal, Reforma, and Milenio, and the news portal Latinus. There is also Azteca Noticias group.

Source: Nic Newman, Richard Fletcher, Craig T. Robertson, Kirsten Eddy, and Rasmus Kleis Nielsen, Reuters Institute Digital News Report 2022, (Oxford: Reuters Institute for the Study of Journalism and University of Oxford, 2022).

In Mexico, a privately owned commercial broadcasting system was developed over the years through the concession of a public good to a handful of private individuals—a flawed structure common to most Latin American countries. This concession system permits the federal government to apply pressure and influence over the press, and in some cases dictate what the press is to say.

The relationship between the press and the government in Mexico has changed over the centuries. During the colonial period, the first press publications were conceived as an instrument of propaganda for the Spanish monarchy and ecclesiastical elites. Then, in the post-independence period in the nineteenth century, the press was a weapon that helped impose ideologies of groups that contended for power. Different media were controlled through newspaper closures, restricting access to paper, and, of course, censorship. Also, journalists were jailed or tortured. In the twentieth century, government strategies changed—at least on paper—especially after the revolution of the 1910s and the 1917 constitution, when press freedom began to be seen as a synonym for democracy.

While Mexico’s constitutions of 1824, 1857, and 1917 showed progress in terms of citizenship and democracy, they also made it clear that the existence of laws did not guarantee citizens access to principles, rights, and freedoms. Undeniably, one of the revolution’s main causes and slogans was an electoral demand: “real democracy, no reelection.” However, the Mexican political system for many years was far from democratic.

For much of the twentieth century, Mexican politics and public institutions were under the quasi-dictatorship of the Institutional Revolutionary Party (PRI). While the PRI allowed the opposition to participate in elections, they retained control over the media, which helped to ensure that the opposition had no chance of reaching any elected office. The PRI dominated for more than seventy years, from the end of the revolution in 1917 until the 1990s, and it maintained a regime that controlled municipalities, governorships, congress and the presidency. The latter office concentrated many constitutional powers, making the holder the central figure of the political system.

During this period of presidential authoritarianism, the government changed its strategy toward the press and kept journalists close, at least those of them willing to support the regime. Some were even on the payroll of public bodies. As a result, the press became economically dependent on the government, and government influence over the content of the press was very large.

In 1968 the government demonstrated that there was no freedom of the press nor freedom of expression, after former president Gustavo Díaz Ordaz ordered a brutal repression of the students’ movement, whose most urgent demands were freedom for political prisoners, public dialogue, and full freedom of expression.¹⁰ But, instead of negotiating or acceding to these demands, the result was the Tlatelolco Massacre, in which “hundreds of people were killed.”¹¹ The press, subjugated to the will of the government, stigmatized the students’ movement from the beginning, labeling them as “strikers,” “agitators,” and “terrorists.”¹²

After this dark episode in Mexican history—and confronted with the anger of the people and the loss of credibility—the national press began a period of professionalization that created space for independent and critical publications. However, it should be understood that professional, autonomous, free, and critical journalism has had to develop despite the media system and its elite owners and not because of them.

The twenty-first century brought major commercial competition and political democratization. New electoral laws stated that political parties must be provided with resources to advertise themselves and the media was obliged to cover campaigns fairly and free of costs. But this just meant that media owners and publishers simply benefited from having a more diverse range of patrons. Social media has also provided cost-free opportunities to be informed, and this has become a challenge for the government-supported press, very often criticized for its bias and lack of objectivity.

Despite some improvements, critical journalism has always had to paddle upstream to sustain its dissident model. Of course, this kind of press tends to face threats and violence, with aggressions coming from two sides: the government and organized crime.

Press freedom and violence

RSF present the annual World Press Freedom Index to compare the level of press freedom enjoyed by journalists and media in 180 countries and territories.¹³ The 2022 index, which comprises the period from January to December 2021, ranks Mexico at 127th with a score of 47.57 out of 100, thus classifying the situation for journalists as “difficult.” This did, however, represent an improvement on the 2021 index, in which Mexico ranked 143rd. Considering the events that took place in 2022, it seems very likely that the country will slide back down the rankings in the 2023 index.

Source: “2022 Press Freedom Index,” Reporters Without Borders (RSF), https://rsf.org/ en/index.

Physical threats and intimidation are the most widespread form of attacks against journalists, followed by physical assaults and kidnappings.¹⁴ Also, among the most recent and alarming challenges are digital attacks against journalists and their sources, harassment through social media, and unmonitored covert surveillance. As the Inter-American Commission on Human Rights says, the most extreme and violent method of curtailing the right to freedom of expression is the murder of journalists. This annuls the victim’s right to life, and entails other consequences besides: it has an intimidating and silencing effect on journalists’ peers; it affects the rights of the victims’ families to psychological and moral integrity; and it violates the rights of individuals and soci-eties to seek and receive information.¹⁵

The World Press Freedom Index comprises five indicators: political context, legal framework, economic context, socio-cultural context, and safety. What should be noted is that in the 2022 index, Mexico was ranked 179th out of 180 in the safety index—unsurprising, given that Mexico was the deadliest country for journalists for four consecutive years.¹⁶

From the year 2000 to 2022, 163 journalists have been murdered, most of them men.¹⁷ In addition, twenty-seven journalists are registered missing as of January 2023,¹⁸ including Cándida Cristal Vázquez, who disappeared on July 21, 2022 and who worked as a reporter and radio newscaster in Mazatlán, Sinaloa.¹⁹ Between AMLO becoming president in December 2018 and the end of 2022, thirty-eight murders and five disappearances have been counted; in 2022 alone eighteen journalists were murdered.²⁰

Source: Authors’ own data; for the full data set, click here

Also, the Press Emblem Campaign (PEC)—an international, independent nongovernmental organization dedicated to media safety and rights—found in its 2022 annual report that, along with Ukraine, Mexico was the most dangerous country in 2022 for journalists.²¹

In Mexico, as in most parts of the world, no one is held accountable for journalists’ murders. The Committee to Protect Journalists (CPJ) in its 2022 Global Impunity Index says that the vast majority of journalists’ killers continue to get away with murder. The index ranked Mexico in sixth place for impunity, and it would be even higher but for the index calculation factoring in Mexico’s relatively large population. Despite this, the CPJ considers Mexico to be the western hemisphere’s most dangerous country for journalists as it has the most unsolved journalist murders in the past ten years with twenty-eight cases.²²

Political violence

It is true that the news media has lost people’s confidence and that we live in the era of “fake news.” Young people now opt for social media as their main source of news, replacing journalists with influencers. But in Mexico, the connection between journalism and the public has weakened even further with the president’s daily attacks.

Every morning, from Monday to Friday at 7 a.m., AMLO gives press briefings known as the mañaneras where he speaks about what he considers are some of the most relevant issues concerning Mexico.²³ He includes sections regarding security, impunity, and others, including fake news in a segment called “Who’s Who.” In this section, the president and the web content coordinator at La Jornada de Oriente, Ana Elizabeth García Vilchis, point out journalists and publications that they consider unprofessional and articles they consider untrue.

Some of the journalists who have been name-checked in these briefings have indicated that they have been harassed online after being criticized by the president. In response, they accuse the president of using his briefings as a way to silence the independent press. But the president has his own point of view and classifies the media into two groups: the “good,” the media who cherish his pol-icies; and the “bad,” who he labels as neoliberal, corrupt, and elitist.

President López Obrador has singled out several journalists and media outlets for particular criticism, most frequently the Reforma newspaper. He has even labeled foreign press like the New York Times and the Washington Post as “unethical.”²⁴ Some journalists interviewed by the CPJ in 2019 agreed that AMLO fosters a hostile atmosphere and that his comments seem like aggression or threats. Another freelance journalist said that AMLO, even if “he has always been somewhat authoritarian,” is better than previous governments, especially in terms that “he respects what the media can publish.”²⁵

On December 15, 2022, after the attempted murder of renowned Grupo Imagen journalist Ciro Gómez Leyva, a group of 180 journalists, reporters, editors, and other media professionals signed a letter accusing the president of being “politically responsible” for the crime and demanding an end to the harassment of their profession.²⁶ The journalists that signed the letter are mostly from Grupo Imagen, TV Azteca, Latinus, El País, Reforma, El Universal, ADN, and Foro TV and identify themselves as critical journalists, but some others—including the president—consider them old servants of the PRI regime. So when AMLO responded to their letter during the mañanera, he accused the signatories of being “spokespeople for conservatism” who served special interests, and criticized them for their lack of balance regarding AMLO and his regime.²⁷ He even took the chance to point out that there is a fierce campaign against his government, and that the attempted murder may have been a bid to try to destabilize the government.²⁸ He also commented that information should not be left in the hands of journalists, and assured viewers that he was not involved in the attack, and that he does not lead an oppressive state.

Some of what AMLO says is true: the press does sometimes serve the interests of elites and powerful groups. But two days prior to the attempt on Gómez Leyva’s life, AMLO said that listening to Gómez Leyva’s program was “bad for the health” and that “if you listen to them too much, you may even get a tumor in your brain.”²⁹ At the time of writing (January 2023), no arrests have been made relating to this crime but the Attorney General’s Office of Justice of Mexico City is working on the case. Anyways, the message for the entire press after this attempt is that prominence does not guarantee security.

Mexican authorities tend to say that the aggressions against journalists are not related to their work. However, President López Obrador launched in 2021 an open attack not just on journalists, but on ARTICLE 19, an international organization created to docu-ment censorship, to defeat the censors, and to help the censored. López Obrador said during a mañanera that the organization—and other “conservative” groups—was waging a “conservative” campaign against him. ARTICLE 19 responded with an article saying that the attack highlights his “grim record on impunity,” with 98 percent of journalist killings going unsolved.³⁰ It should be noted that the term “conservative” is, for AMLO, any person or policy that opposes or differs from his goal of “transformation.” It does not relate to any political or economic stance.

Violence and electoral violence related to transnational crime organizations and drug-trafficking organizations

Mexican transnational criminal organizations (TCOs) are present in 70 percent of the country and participate in a wide range of criminal activities beyond drug trafficking.³¹ Before 2006, there were only four dominant drug-trafficking organizations (DTOs), but after former president Felipe Calderón Hinojosa’s war on drugs, they fragmented into nine major groups:

Beltrán Leyva Organization
Cartel Jalisco New Generation (CJNG)
Gulf Cartel
Juárez/Carrillo Fuentes Organization
La Familia Michoacana (The Mexican Family)
Los Rojos (The Reds)
Los Zetas and Cartel del Noreste
Sinaloa Cartel
Tijuana/Arellano Félix Organization

The CJNG is the group with the most presence and fastest growth in the country. It controls various demarcations in the east and west, and is increasing its influence in northern and southern states. The current criminal landscape in Mexico is dominated by the battle between the emerging CJNG, which bases its operations on the trafficking of synthetic drugs, and the Sinaloa Cartel, historically the dominant organization in Mexico.

These groups also act as umbrella organizations for many smaller local criminal groups; counting all of these, the number of TCOs grows into the hundreds. Many of them are involved in extortion, human smuggling, arms trafficking, oil theft, kidnapping, and homicide, among other crimes. These smaller crime groups are part of the big cartels’ strategy, dubbed “proxy war,” through which the national cartels control the distribution of drugs in various parts of the country.

Organized crime is characterized by the fact that it seeks to neutralize governments and the state through corruption, preventing the investigation, arrest, prosecution, and detention of its members or their profits. For this reason, part of the DTOs’ profits is used to coerce public servants, intimidate politicians, and influence elections; criminal organizations are responsible for most of the political violence at the local level.

During the 2017–18 federal and local electoral process, when more than 3,400 positions at the local and federal level were being contested, including the presidency, a total of 1,203 aggressions against politicians and non-elected officials took place. These resulted in 523 murders: 152 politicians and 371 public employees. This was the most violent electoral process in Mexico’s recent history.³²

The second most violent electoral process occurred just a few years later, during the 2020–21 electoral process: 1,066 aggressions resulted in 265 murders, most of them public servants and politicians, and in some cases their colleagues and relatives. It is worth noting that 75 percent of the candidates and contenders attacked were competing for municipal offices, and that 75 percent were candidates of the opposition to the state government. The state of Veracruz experienced the worst aggression of all, with 117 cases.³³

DTOs have sought to influence elections in a number of ways, including violence at polling places, intimidation and coercion of voters, and control of candidate selection—for instance, via campaign financing. This last point is a major problem, and includes issues such as unreported donations and the use of illicit resources to finance political campaigns, to mention just two avenues for corruption. This contributes to Mexico’s ranking of 64th in the Perception of Electoral Integrity Index.³⁴ By controlling municipal government DTOs can access privileged information and public resources and obtain protection from the municipal police.

On election day in 2015, ARTICLE 19 registered twenty-seven aggressions against journalists covering the electoral process in different Mexican states.³⁵ These aggressions included equipment theft, reporters being illegitimately asked to delete their photos, threats, physical aggressions, identity theft on social media, information blackout, arbitrary detentions, and cyber-attacks on news portals. The five states with the most cases were Oaxaca (five), Puebla (five),³⁶ Veracruz (four), Guerrero (three), and Campeche (two).

Also, on the 2016 election day, the same organization documented nineteen aggressions that included harassment, arbitrary detentions, intimidation, threats, and physical assault. The states where the aggressions occurred were Chihuahua (five), Mexico City (four), Sinaloa (four), Aguascalientes (three), Puebla (two), and Veracruz (one). In Veracruz, the day prior to the election, journalist Jorge Sánchez, director of the local newspaper La Unión de Medellín, received a call with a death threat. Sánchez is part of the Protection Mechanism for Human Rights Defenders and Journalists and the son of journalist Moisés Sánchez, who was murdered in 2015 in Medellín de Bravo municipality in Veracruz.³⁷

Other media outlets whose staff were attacked during the 2015 and 2016 electoral processes included La Unión de Medellín (Veracruz); El Sol de Puebla, Status, and e-consulta (Puebla); Yradiamos, Notimex, and El Heraldo de Aguascalientes (Aguascalientes); La Revista NCG, El Diario del Noroeste, Akronoticias, and Más Noticias (Chihuahua); Noroeste (Sinaloa); and Reforma (Mexico City).

In the 2015 electoral process, four aggression cases were perpetrated by political party personnel or activists, and in 2016 journalists were harassed and intimidated, also by political party employees or members. On election day 2021 (June 6), sixteen aggressions were registered against journalists and a total of fifty-five since April 19,when ARTICLE 19’s hashtag to document such incidents was activated: #RedRompeElMiedo.³⁸ Again, most of the aggressors (50.9 percent) came from political parties, and their actions included harassment, intimidation, threats, physical aggressions, and information blackout.³⁹ This time, the abuses were registered in Baja California (six), Aguascalientes (five), Jalisco (five), Guanajuato (five), Guerrero (four), Sinaloa (four), and Yucatán (four).

Many local journalists report the crimes of these DTOs, as well as corruption, and the links between politicians and criminals. Thus, it is not surprising that violence against journalists increases during electoral processes, nor that there exists a direct correlation between this violence and the presence of drug cartels in a territory.

Also, we can see that the states with the highest rates of journalist murders are among the poorest in the country. Take the example of Veracruz, which, during Javier Duarte’s governorship (December 2010–November 2016), was the most lethal for communicators with eighteen journalists killed.⁴⁰ These are the territories where TCOs tend to settle, due to geostrategic characteristics.

The following table presents the five states in which most murders of journalists took place between 2000 and 2022.

Sources: Cartel information from Congressional Research Service (CRS), Mexico: Organized Crime and Drug Trafficking Organizations, CRS, June 7, 2022, https://sgp.fas.org/crs/row/R41576.pdf. Deaths data from Article 19, “Periodistas Asesinadas/os en México,” ARTICLE 19, https://articulo19.org/periodistasasesinados; and Committee to Protect Journalists (CPJ), “Las Periodistas Mexicanas Yessenia Mollinedo y Johana García Mueren Asesinadas en Veracruz,” May 17, 2022, https://cpj.org/es/2022/05/las-periodistas-mexicanas-yessenia-mollinedo-y-johana-garcia-mueren-asesinadas-en-veracruz.

The Mexican government and Mexican media outlets often tally homicides differently due to restrictions placed on reporting, and crime groups’ attempts to cover up the numbers and identities of their victims (although other times they show off their crimes as a strategy to intimidate or to incriminate another group). Also, there are the so-called “silent zones” that neither the government nor journalists can reach. With impunity being the norm after journalists are killed, the result is silencing and self-censorship of communicators.

At this point, there is something that we should highlight: most of the journalists killed in recent years worked in local news. Similar to the rest of Latin America, 95 percent of journalist killings are committed in small cities, rural areas, transit areas, or border zones.⁴¹ Many of those murdered were covering security and political subjects and were the victims of organized crime. Sometimes journalists receive death threats before being killed, like Lourdes Maldonado López, who was killed in January 2022 and had even used a presidential mañanera in 2019 to appeal for the government’s help with protection.⁴²

As we can see, there is a fine line between the two “sides” that exercise violence against journalists and communicators. Corruption makes it hard to know what comes first, but what is a fact is that most of the recent murders, disappearances, and kidnappings of journalists are concentrated in states where organized crime has a strong presence. As noted by the Inter-American Commission on Human Rights, the journalists who are targeted most often are those covering local news on corruption, drug trafficking, organized crime, public safety, and related affairs.⁴³

Some of the journalists who are subject to violence and intimidation may opt to align with one powerful interest or another, which sometimes means failing to report or remaining silent. But, for those willing to keep covering sensitive news after receiving threats, the Protection Mechanism for Human Rights Defenders and Journalists was developed. This mechanism is discussed in the following section.

The Protection Mechanism for Human Rights Defenders and Journalists

As the state (i.e., the Mexican federal government) has failed to implement an effective response to criminal organizations, and as it is responsible for protecting, promoting, and guaranteeing human rights, including journalists’ rights, in 2012, it created the Protection Mechanism for Human Rights Defenders and Journalists. The Mechanism is a federal agency under the Ministry of the Interior backed by the Law for the Protection of Human Rights Defenders and Journalists, issued in the same year.

Although it protects journalists and human rights defenders, this chapter will focus only on journalists. The Mechanism recognizes a journalist to be:

Individuals, as well as public, community, private, independent, university, experimental, or any other type of communication and dissemination media, whose work consists of collecting, generating, processing, editing, commenting, expressing opinions, disseminating, publishing, or providing information, through any means of dissemination and communication that may be printed, radio, digital or image.⁴⁴

The Mechanism pledges to guarantee the life, safety, and personal integrity of journalists and human rights defenders through three types of measures:

Urgent Protection Measures: actions and means to immediately safeguard the life, integrity, freedom, and security of people, to be implemented within nine hours of the request.
Protection Measures: actions to protect from risks and safeguard the life, integrity, freedom, and security of people, but are not required to be implemented in a defined period.
Preventive Measures: actions and means to prevent the completion of the aggression.

When a journalist reports an aggression or threat, the Mechanism evaluates the risk and designs a protection plan. Until 2019, when the Office in Mexico of the United Nations High Commissioner for Human Rights, at the request of the Undersecretariat for Human Rights of the Ministry of the Interior, published its diagnosis and recommendations to strengthen the Mechanism, 903 people were under its protection.⁴⁵ This number included both human rights defenders and journalists.

In summary, the recommendations from the United Nations High Commissioner for Human Rights included the following:

The President’s Office and the Ministry of the Interior must serve as examples for state governments by fully adopting the recommendations.
The Mexican state and the state governments must ensure personnel and financial resources for the protection measures and the daily operation of the Mechanism.
It would be desirable to have an effective system to monitor the correct implementation of the protection plans and promote relevant sanctions when it detects non-compliance with the corresponding obligations.

As the principal approach of the Mechanism is avoiding the realization of aggression or damage, it is expected that 2,400 people would need protection from the Mechanism by 2024. This number may be untenable and will make the Mechanism more inefficient; there is already insufficient personnel to process the files of those that currently have protection.

Noting that the Mechanism did not address the root causes of risk, the UN High Commissioner also recommended that a new paradigm be adopted: a prevention approach. Also, the report recommended that the causes of risk should be eliminated, as the Mechanism cannot be the sole response to violence against human rights defenders and journalists.

For the development of this chapter, we interviewed a journalist who joined the Protection Mechanism after receiving death threats in 2017 and 2019. This journalist sees the Mechanism as a positive—but small and reactive—response to a complex situation. In his view, it was created by the federal government to serve a privileged few, considering the general state of violence that the whole country lives in.

He says his life changed entirely during the “five years, one month, and four days” that he lived under protection of the Mechanism. He was accompanied by security escorts, although this was “a daily reminder that you are at risk,” and meant that there was no privacy in his life. He added: “Even to go with a lady to the hotel, you go with an escort.”⁴⁶

The interviewee told us that, to protect their lives, some colleagues were transferred from different parts of Mexico to safe houses in Mexico City, under the protection of the Mechanism, although many had lost their jobs as journalists as a result. However, in spite of the Mechanism’s limitations identified by this interviewee, and despite the difficulties that protection imposes on one’s personal and professional life, he is clear that many of his colleagues would be dead without its protection.

Another limitation this interviewee finds in Mexico is that, despite the risky situation in which journalists live, the media sector itself is not prepared to respond. There are no protection protocols or psychological assistance, no courses are provided, and they do not know where to go or what to do in case of imminent danger. He also says that sometimes media organizations promise support, but it never reaches the journalists.

Even if there are many limitations due to lack of funding and other operative deficiencies, the interviewee recognizes the Mechanism as an important measure to protect journalists and human rights defenders. He directs most of his complaints against the prosecuting authorities, specifically the Special Prosecutor’s Office for Attention to Crimes Committed against Freedom of Expression, which has not only failed to advance investigations in his own case, but has even attempted to close it. The interviewee says that the Mechanism should not exist and instead, the government should provide access to justice: “It should be legislated so that threats become a serious crime. Without justice, there is no way the Mechanism can protect all human rights defenders and journalists.”

It seems ironic that López Obrador’s political strategy against DTOs is “hugs, not bullets,” which means he would not pursue a war against the TCOs but would instead target the social conditions that allow criminal groups to thrive. But in the first days of 2023, two violent encounters with mafia leaders left more than a dozen dead and the city of Culiacán (Sinaloa) as a war zone for a second time. Even more ironic is that AMLO’s morning press conferences are regularly used to single out journalists instead of criminal leaders.

Journalists are victims of violence from both the government and the DTOs. As our interviewee and the United Nations High Commissioner for Human Rights stated, there must be a focus on addressing the root causes of violence and, in the meantime, the Protection Mechanism must be strengthened so that freedom of expression agents can remain alive.

Final thoughts

Mexico is experiencing a grave human rights crisis. Violence faced by human rights defenders and journalists on a daily basis, which takes place in a context of practically absolute impunity that incentivizes its systematic reproduction, is one expression of the critical situation. Violence against journalists and its consequent impact on freedom of the press has been studied primarily as the result of two major underlying problems in Mexico: impunity, and the failed strategy against violence, mainly exerted by TCOs.

A way to put an end to impunity is to build greater capacities—in quantity and quality—in law enforcement agencies, with better investigative capacities. Such capacity development involves political will and capital, large sums of public funds, as well as time and patience. But these kinds of actions are not enough when active impunity also exists, that is, a series of actions carried out with the explicit purpose of undermining investigations and not generating results, in which case it can be useful to implement an international mechanism for supervising the administration of justice in Mexico.

Concerning the failed strategy against violence, the security measures adopted by the administration of Andrés Manuel López Obrador, despite the assurances that his strategy was to address the root causes of violence, have been to keep the armed forces as the main tool of public security in the country. It is necessary to strengthen the local police and leave national security challenges to federal bodies, removing the army from its current function. As long as these issues are not solved, violence against journalists will be a matter of statistics: Which year was worse? Which electoral period was more violent? Strengthening local police corps requires better salaries and social security nets, more—and more modern—equipment and weapons, continuous physical and use-of-force training, among others. Such investment of resources will pay in the long run through more secure communities. Therefore, politicians and decision makers must explain to society at large about the time needed for objective improvements to appear. But, since it seems hard to get to a point where the human rights violations crisis in Mexico—in which violence against journalists is immersed—is fully addressed, or that deep reforms are made to the prosecutorial system, it is necessary to keep and strengthen the Protection Mechanism to prevent greater damage. As the Mechanism is based on voluntary adherence, it cannot realistically cover the entire at-risk population. The Mechanism should have a strategic, proactive component coming from the secretary of the interior: if, through a risk analysis, it is found that a journalist or group is at high risk, the Mechanism would be automatically activated.

But measures also need to become more sensitive so that the people under protection do not lose their jobs, their privacy can be respected, and their mental health is taken care of. Media companies need to be ready to act in case of risk: they must have their own protection protocols and provide training that allows journalists and media workers to develop their roles in safer conditions. And, when things become risky, media companies ought to do whatever is necessary to protect their colleagues and collaborators.

It should be pointed out that a system of concessions and awards has deformed the performance of the media in Mexico. Suffice it to say that many media outlets cover the morning news briefings, no matter how absurd they may be, and no matter how much their own journalists are singled out in AMLO’s “Who’s Who” segment; not to do so would risk losing the concession. Journalists and human rights organizations have said that these mañaneras by the president and his spokespeople aggravate journalists’ situation and heighten their risk.

Indeed, the widespread use of social networks and the constant bombardment of information makes it more difficult to filter content. As we have seen, fake news and disinformation have multiplied during the pandemic, and in similar crises like the 2017 earthquakes. But there are professional tools like Verificado—with no ideological bias—for citizens to discriminate real news from fake news.

Freedom of expression is not complete without freedom of the press. As long as journalists and human rights defenders are subject to violence, we can conclude that neither freedom nor prosperity can be fully attained.

Sergio M. Alcocer is president of the Mexican Council on Foreign Relations (COMEXI); former undersecretary for North America in the Ministry of Foreign Affairs; professor at the National Autonomous University of Mexico (UNAM) and part-time professor at the University of Texas at San Antonio.

Jeziret S. González is a member of COMEXI and columnist with MVS News.

1 Dan Negrea and Matthew Kroenig, “Do Countries Need Freedom to Achieve Prosperity? Introducing the Atlantic Council Freedom and Prosperity Indexes,” Atlantic Council, accessed February 9, 2023, https://www.atlanticcouncil.org/in-depth-research-reports/report/do-countries-need-freedom-to-achieve-prosperity.

2 Office in Mexico of the United Nations High Commissioner for Human Rights, Diagnóstico Sobre el Funcionamiento del Mecanismo, OHCHR, July 2019, https://hchr.org.mx/wp/wp-content/themes/hchr/images/doc_pub/190725-Diagnostico-Mecanismo-FINAL.pdf

3 UNESCO, “Journalist Killings Decline in 2021 But Alarming Threats Remain,” press release, last updated April 21, 2022, https://www.unesco.org/en/articles/journalist-killings-decline-2021-alarming-threats-remain.

4 UN, “Universal Declaration of Human Rights,” accessed February 28, 2023, https://www.un.org/en/about-us/universal-declaration-of-human-rights.

5 Data from ARTICLE 19 lists 157 journalist killings between 2000 and 2022, 37 of which occurred during AMLO’s presidency: “Periodistas Asesinadas/os en México,” ARTICLE 19, accessed February 28, 2023, https://articulo19.org/periodistasasesinados. Our own research gives a slightly higher figure of 163 killings, with 38 of those in AMLO’s term. For instance, the murder of Diego García Corona (December 2018) is not included in the ARTICLE 19 list: “Gobierno de AMLO Trabaja en un Plan Para Proteger a Periodistas,” El Universal, December 6, 2018, https://www.eluniversal.com.mx/nacion/sociedad/gobierno-de-amlo-trabaja-en-un-plan-para-proteger-periodistas. For the authors’ full data set, see the digital version of this chapter on the Atlantic Council website.

6 Ley para la Protección de Personas Defensoras de Derechos Humanos y Periodistas, (June 25, 2012) https://www.cedhnl.org.mx/somos/legislacion/Ley-para-la-proteccion-de-personas-defensoras-de-derechos-humanos-y-periodistas.pdf.

7 “Medición Multidimensional de la Pobreza,” Consejo Nacional de Evaluación de la Política de Desarrollo Social (CONEVAL), accessed February 28, 2023, https://www.coneval.org.mx/Medicion/MP/Paginas/Pobreza_2020.aspx, Cuadro 1. Medición multidimensional de la pobreza.

8 Instituto Mexicano para la Competitividad (IMCO), Índice de Riesgos de Corrupción: Compras públicas en México 2018–2021 (Mexico City: IMCO, 2022).

9 “Mexico,” Reporters Without Borders (RSF), accessed February 28, 2023, https://rsf.org/en/country/mexico.

10 Museo Universitario Arte Contemporaneo (MUAC), “Imágenes y Revuelta: La Gráfica del 68,” accessed March 8, 2023, https://muac.unam.mx/exposicion/imagenes-y-revuelta-la-grafica-del-68?lang=en.

11 “Matanza de Tlatelolco,” National Human Rights Commission (CNDH), accessed March 3, 2023, https://www.cndh.org.mx/noticia/matanza-de-tlatelolco.

12 “Así Amanecieron las Portadas el Día Después del 2 de Octubre de 1968,” Forbes, October 2, 2018, https://www.forbes.com.mx/asi-amanecieron-las-portadas-tras-el-2-de-octubre-de-1968; Carlos Reyna, “¿Cómo Reportó la Prensa la Masacre del 2 de Octubre de 1968?” Gatopardo, October 3, 2018, https://gatopardo.com/arte-y-cultura/titulares-del-3-de-octubre.

13 The index’s methodology can be found at: https://rsf.org/en/index-methodologie-2022?year=2022.

14 Comisión Interamericana de Derechos Humanos (CIDH) and Relatoría Especial para la Libertad de Expresión, Informe Especial sobre la Situación de la Libertad de Expresión en México, Organizacion de los Estados Americanos (OAS), June 2018, https://www.oas.org/es/cidh/expresion/docs/2018_06_18%20CIDH-UN_FINAL_MX_report_SPA.pdf.

15 Comisión Interamericana de Derechos Humanos (CIDH) and Relatoría Especial para la Libertad de Expresión, Estudio Especial Sobre Asesinato de Periodistas por Motivos que Pudieran Estar Relacionados Con la Actividad Periodística: Periodo 1995-2005, Organizacion de los Estados Americanos (OAS), June 2018, https://www.cidh.oas.org/relatoria/section/Asesinato%20de%20Periodsitas.pdf.

16 “This is Already the Deadliest Year Ever for Mexico’s Media,” Reporters Without Borders (RSF), August 25, 2022, https://rsf.org/es/2022-es-ya-el-a%C3%B1o-m%C3%A1s-mort%C3%ADfero-para-los-periodistas-en-la-historia-de-m%C3%A9xico.

17 For the full data set, see the digital version of this chapter on the Atlantic Council website.

18 “Abduction of Three Men Highlights Climate of Terror for Local Reporters in Mexico,” Reporters Without Borders (RSF), January 13, 2023, https://rsf.org/en/abduction-three-men-highlights-climate-terror-local-reporters-mexico.

19 Carlos Velázquez, “Cándida Cristal Vázquez: Cuerpo Hallado no Corresponde a la Periodista, Dice Fiscalía,” El Financiero, August 30, 2022, https://www.elfinanciero.com.mx/estados/2022/08/30/candida-cristal-vazquez-cuerpo-hallado-no-corresponde-a-la-periodista-dice-fiscalia.

20 For the full data set, see the digital version of this chapter on the Atlantic Council website. Sources include: “Periodistas Asesinadas/os en México,” ARTICLE 19; “This is Already the Deadliest Year Ever . . .,” RSF, 2022; Jon Martín Cullell, “México Vive Su Momento Más Letal Para los Periodistas Desde Que Hay Registros,” El País, December 17, 2022, https://elpais.com/mexico/2022-12-18/mexico-vive-su-momento-mas-letal-para-los-periodistas-desde-que-hay-registros.html; Almudena Barragán, “Yesenia Mollinedo y Johana García: La Pareja de Periodistas Asesinadas en Veracruz que Pone Cara al Terror de Todo un Gremio,” El País, May 12, 2022, https://elpais.com/mexico/2022-05-12/yesenia-y-johana-la-pareja-de-periodistas-asesinadas-en-veracruz-que-pone-cara-al-terror-de-todo-un-gremio.html; “The Journalist Pedro Pablo Kumul is Assassinated in Xalapa, Veracruz,” November 22, 2022, https://www.animalpolitico.com/seguridad/asesinan-al-periodista-pedro-pablo-kumul-en-xalapa-veracruz.

21 Press Emblem Campaign (PEC), “14.12.2022. PEC Annual Report. Ukraine and Mexico Most Dangerous Countries in 2022 for Journalists,” press release, PEC, December 14, 2022, https://pressemblem.ch/pec-news.

22 Committee to Protect Journalists (CPJ), Killing With Impunity: Vast Majority of Journalists’ Murderers Go Free. 2022 Global Impunity Index. New York: CPJ, November 1, 2022, https://cpj.org/wp-content/uploads/2022/10/CPJ_2022-Global-Impunity-Index.pdf.

23 “AMLO Mañanera,” accessed March 8, 2023, https://lopezobrador.org.mx/temas/amlo-mananera.

24 President AMLO, in his morning press conference on Wednesday, December 14, 2022, pointed out that these are “unethical newspapers that serve powerful interests and governments.” https://lopezobrador.org.mx/2022/12/14/version-estenografica-de-la-conferencia-de-prensa-matutina-del-presidente-andres-manuel-lopez-obrador-871.

25 Jan-Albert Hootsen, “López Obrador’s Anti-Press Rhetoric Leaves Mexico’s Journalists Feeling Exposed,” Committee to Protect Journalists (CPJ), May 6, 2019, https://cpj.org/2019/05/mexico-president-lopez-obrador-press-rhetoric-threatened.

26 Mario Andres Landeros, “Tras Atentado a Ciro, 180 periodistas Exigen a AMLO Cesar Hostigamiento,” El Universal, 20 December, 2022, https://www.eluniversal.com.mx/nacion/tras-atentado-ciro-177-periodistas-exigen-amlo-cesar-hostigamiento.

27 Eduardo Dina, “‘Puro Periodista del Régimen’: AMLO Se Lanza Contra Comunicadores Que Se Solidarizaron Con Ciro Gómez Leyva,” El Universal, December 21, 2020, https://www.eluniversal.com.mx/nacion/amlo-se-lanza-contra-quienes-se-solidarizaron-con-ciro-gomez-leyva-puro-periodista-del-regimen; Eduardo Dina, “La Mañanera de AMLO, 21 de Diciembre, Minuto a Minuto,” El Universal, December 21, 2022, https://www.eluniversal.com.mx/nacion/la-mananera-de-amlo-21-de-diciembre-minuto-minuto-0.

28 Natalie Kitroeff, “Ciro Gómez Leyva Recibió Disparos. El Presidente de México Dijo Que no Descartaba Que Fuera un Atentado Para ‘Afectarnos a Nosotros’,” New York Times, December 21, 2022, https://www.nytimes.com/es/2022/12/21/espanol/ciro-gomez-leyva-amlo.html

29 Ariana Paredes, “AMLO: Es Dañino Escuchar a Gómez Leyva, Loret y Sarmiento, Hasta Puede Salir un Tumor en el Cerebro,” El Universal, December 14, 2022, https://www.eluniversal.com.mx/nacion/amlo-es-danino-escuchar-gomez-leyva-loret-y-sarmiento-hasta-puede-salir-un-tumor-en-el-cerebro.

30 “Mexico: Attack on ARTICLE 19 by President López Obrador Highlights his Grim Record on Impunity,” ARTICLE 19, March 31, 2021, https://www.article19.org/resources/mexico-attack-on-article-19-by-president-lopez-obrador-highlights-his-grim-record-on-impunity.

31 Instituto Nacional Electoral (INE), “Violencia Criminal Impacta el Trabajo Periodístico y las Elecciones, Coinciden Especialistas,” November 23, 2022, https://centralelectoral.ine.mx/2022/11/23/violencia-criminal-impacta-el-trabajo-periodistico-y-las-elecciones-coinciden-especialistas.

32 Etellekt Consultores, Séptimo Informe de Violencia Política en México 2018, Etellekt Consultores, July 9, 2018, https://www.etellekt.com/reporte/septimo-informe-de-violencia-politica-en-mexico.html.

33 Etellekt Consultores, Cuarto Informe de Violencia Política en México 2021, Etellekt Consultores, May 5, 2021, https://www.etellekt.com/informe-de-violencia-politica-en-mexico-2021-A30-etellekt.html.

34 The Perception of Electoral Integrity Index covers the national presidential and parliamentary elections from July 1, 2012, to December 31, 2021. Experts measure each country one month after polls close and are asked to assess the quality of national elections on eleven sub-dimensions: electoral laws, electoral procedures, district boundaries, voter registration, party registration, media coverage, campaign finance, voting process, vote count, results, and electoral authorities. These items sum to an overall Electoral Integrity Index score from 0 to 100. For the index data set see: Holly Ann Garnett, Toby S. James, and Madison MacGregor, Perceptions of Electoral Integrity (PEI-8.0), (2022), Harvard Dataverse, https://doi.org/10.7910/DVN/YSNYXD.

35 Juan Vázquez, “Durante Jornada Electoral, 27 Agresiones Contra la Prensa,” ARTICLE 19, June 7, 2015, https://articulo19.org/durante-jornada-electoral-27-agresiones-contra-la-prensa

36 Juan Vázquez, “En Contexto Electoral, Cuatro Casos de Agresiones Contra Directores de Medios y Periodistas en Puebla,” ARTICLE 19, June 2, 2016, https://articulo19.org/en-contexto-electoral-cuatro-casos-de-agresiones-contra-directores-de-medios-y-periodistas-en-puebla.

37 Juan Vazquez, “Durante Elecciones, 19 Agresiones Contra la Prensa en México,” ARTICLE 19, June 8, 2016, https://articulo19.org/durante-elecciones-19-agresiones-contra-la-prensa-en-mexico.

38 “Red Rompe El Miedo” (RRM), meaning Break the Fear Network, is a hashtag created by ARTICLE 19 in 2013 to track aggressions against journalists while covering high-risk events in Mexico, such as social protests and electoral processes. See https://informaterompeelmiedo.mx.

39 “La Red Rompe el Miedo Documenta Agresiones Contra la Prensa en un Clima de Violencia Política Durante las Elecciones,” ARTICLE 19, June 8, 2021, https://articulo19.org/la-red-rompe-el-miedo-documenta-agresiones-contra-la-prensa-en-un-clima-de-violencia-politica-durante-las-elecciones.

40 “Periodistas Asesinadas/os en México,” ARTICLE 19.

41 Comisión Interamericana de Derechos Humanos (CIDH) and Relatoría Especial para la Libertad de Expresión, Zonas Silenciadas: Regiones de alta peligrosidad para ejercer la libertad, Organizacion de los Estados Americanos (OAS), March 15, 2017, http://www.oas.org/es/cidh/expresion/docs/publicaciones/zonas_silenciadas_esp.pdf.

42 Nic Newman, Richard Fletcher, Craig T. Robertson, Kirsten Eddy, and Rasmus Kleis Nielsen, Reuters Institute Digital News Report 2022, (Oxford: Reuters Institute for the Study of Journalism and University of Oxford, 2022).

43 CIDH and Relatoría Especial para la Libertad de Expresión, Zonas Silenciadas . . ., 2017.

44 Secretariat for Home Affairs (SEGOB), “Mecanismo de Protección para Personas Defensoras de Derechos Humanos y Periodistas,” Government of México, May 3, 2016, https://www.gob.mx/segob/acciones-y-programas/mecanismo-de-proteccion-para-personas-defensoras-de-derechos-humanos-y-periodistas-81609.

45 OHCHR, Diagnóstico Sobre el Funcionamiento del Mecanismo.

46 Interview with anonymous journalist, January 7, 2023, (interviewer: J. S. González Gallardo).

The post Violence against journalists: A tool to restrict press freedom in Mexico appeared first on Atlantic Council.

Mexico “Mostly Free”? Mexico “Mostly Prosperous”?: Uncovering shades of gray in the Freedom and Prosperity Indexes

Vanessa Rubio-Marquez — Mon, 18 Sep 2023 15:00:00 +0000

All essays

Debate over the relationship between economic and political freedom and the prosperity of a society is not new. Scholars and policymakers have long questioned whether prosperity is the fruit or the seed of a free society. Are the two mutually determinant? In the long run can countries attain prosperity without freedom? Can freedom lead to an unprosperous society? In this context, the Atlantic Council’s Freedom and Prosperity Indexes are a powerful empirical tool, allowing us to consider these questions using reliable and comparable data. The Indexes have strengthened debate and interest over the relationship between freedom and prosperity in countries as varied as China, which they currently catalog as Mostly Free in economic terms but Unfree in political terms, and India, which is Mostly Unprosperous despite being Mostly Free in political terms. In these discussions the Indexes serve as key reference points to inform real-life policy debates and policy making.

Still, there are cases in which our understanding of the prevailing conditions in a given country can benefit from additional information. This essay uses the 2022 Freedom and Prosperity Indexes (“the Indexes”) to analyse the case of Mexico, a country currently catalogued as Mostly Free and Mostly Prosperous. It attempts to demonstrate how the Indexes do not yet capture certain dimensions of democratic retrenchment and institutional deterioration now being seen in countries across the globe. Some of these dimensions are easy to see, while others are more subtle. The goal of this paper is to demonstrate the benefits of and need for an early warning system that can enable a more accurate analysis of the decline in freedom and prosperity in certain countries. To that end, this paper attempts to provide a qualitative extension to the Index data, drawn from recent developments in Mexican politics, in order to examine essential nuances that lie beyond the country’s current categorization. This exercise is particularly relevant as Mexico has, since 2018, experienced a wave of populism and polarization that has proven detrimental to political and economic freedoms and, ultimately, to democracy itself.

It is important to note that Mexican democracy was far from perfect prior to 2018, the year in which the current government entered office on a single six-year term without the possibility of reelection. The country was facing profound challenges in the form of a culture of privilege, corruption scandals, and brutal inequality. However, it also enjoyed low but sustained economic growth, strong and well-managed public finances, and a clear route to unlocking higher productivity and achieving its full growth potential through sectoral reforms. But despite the expectations of many, Mexico has since 2018 seen a weakening of the rule of law and checks and balances, increased militarization of state functions, a lack of economic growth, and increased poverty levels. These trends in themselves constitute a worrisome backsliding of both freedom and prosperity.¹

By analysing the Mexican case, I will provide support for a better understanding of the correlation between these two factors and the potential risks to freedom, particularly in many countries that are considered Mostly Free.

The case of Mexico suggests that the Indexes’ methodology is indeed useful in identifying and weighing the elements that make a country free and prosperous, and in providing a sophisticated standard to compare countries around the world. However, it also highlights the need to understand and assess additional rele-vant trends in order to deepen the analysis beyond the Indexes’ primary results. Qualitative analysis of factors that point to the potential for an erosion of freedoms can enrich the definition of the Freedom Index’s four categories (Free, Mostly Free, Mostly Unfree, Unfree). For example, a Mostly Free country—the most common category among the 174 countries included in the Index—might very well be on the brink of becoming Mostly Unfree due to circumstances that are best understood when the Index is complemented with qualitative information.

Freedom, in the end, is fragile. Moreover, backsliding in democracy and freedom could well lead to a significant reduction in prosperity, whether as a result of a deterioration in the certainty that comes with clearly enforced laws and robust institutions, the diminished state capacity that institutional deterioration implies, or both. A closer look at a country’s particular features at specific moments will help us to better interpret the Indexes and render them even more useful. In sum, this essay aims to shed light on the shades of gray within the classification of Mostly Free countries of the Index and encourage analysts and policymakers to pay closer attention to countries when alarm bells over the future of freedom and prosperity start to sound.

Mexico: Shades of gray in freedom

Mexico ranks 82nd among 174 countries in the freedom component of the Freedom and Prosperity Indexes and is categorized as a Mostly Free country, with 58.2 points. But that aggregate score doesn’t tell the whole story about economic, political, and legal freedoms in Mexico today. When broken down by category, the Index ranks Mexico as 52nd in economic freedom (77.3 points), 88th in political freedom (60.8 points) and 122nd in legal freedoms (36.4 points).² A complementary qualitative analysis of recent political developments in Mexico allows us to better understand the processes taking place behind the scenes of the Index’s aggregate data. Facts on the ground suggest that freedom in Mexico is at risk due to an overt attack on institutions, checks and balances, and the rule of law. The Mostly Free tag should thus be interpreted with caution. To better understand why, it is necessary to look closely at the change of government in 2018, and what has happened since.

In July 2018, Andrés Manuel López Obrador, widely referred to as AMLO, was elected president after three decades of political activism that turned him into the most well-known social leader in the country. While he was elected on the promise to “end corruption” and deliver well-being, or bienestar, he notably did not promise to protect individual freedoms or emphasize the importance of the rule of law. In fact, his view of checks and balances had been revealed years earlier in what became a common refrain in his speeches and at campaign stops, referring to what he called the “abusive and neoliberal” administrations of the past: “To hell with their institutions!”³

As president, López Obrador has also increasingly resorted to a narrative that minimizes the importance of economic growth and instead emphasizes the relevance of “happy people.”⁴ In his binary milieu—characteristic of populist leaders—there are “the people” on one hand, who he says he represents and defends, and the political and economic elites on the other, who he characterizes as “conservative,” “neoliberal,” “racist,” and “classist.”⁵

It is important to recognise that AMLO came to power in a social environment marked by profound disenchantment with democracy and the political and economic elite that had governed the country for the previous thirty years. The period between 1988—when Mexico’s democratic transition began—and 2018 was driven by a strategic vision shared by successive governments that consisted of integrating the country with the world economy (mainly via North America); allowing privatization in key sectors such as banking and telecoms; developing independent and technical bodies to provide checks and balances; and framing a nascent multi-party and pluralistic democracy based on institutions, laws, and regulations.

Although Mexico did indeed profoundly reform its economic, political, and social landscape for the better, a series of significant failures that excluded large portions of the population from prosperity and allowed ample space for corruption and abuse created both enormous disparities and widespread resentment.

AMLO’s polarizing discourse capitalized on built-up anger and frustration, and he won a landslide victory in the 2018 presidential election. López Obrador gained more than twice as many votes as his closest challenger, with a record-breaking 30 million votes in a country of 130 million inhabitants and 56 million voters.⁶ The scale of the mandate allowed AMLO to deploy an ambitious government plan that has, in many ways, negatively affected the environment for freedom and prosperity.

A first step came before AMLO came to power. On October 29, 2018, the then president-elect announced that he would cancel the ongoing construction of a new airport in Mexico City, a flagship project of the previous administration that, according to López Obrador, embodied the corruption of the “neoliberal” regime.⁷ To support the cancelation, AMLO’s party, MORENA (National Regeneration Movement), organized a public consultation to ask citizens if they agreed with the decision. This marked the beginning of the administration’s habit of disregarding existing laws and regulations, and it happened before López Obrador was even sworn in on December 1. For its survey, MORENA decided not to abide by the Federal Law on Public Consultations which, among other things, mandates that public votes be conducted by the National Electoral Institute (INE) in order to be binding. Instead, a “citizen council” was put in charge of the vote, with funding left to “voluntary contributions,” mainly from legislators loyal to the president-elect. Despite the fact that less than 1 percent of Mexicans participated in the exercise, the future government proclaimed that “the people” had spoken in favor of canceling the airport.

The political goal of the episode was to send a strong message that previous economic and political elites were no longer in charge, and that even large-scale and well-advanced projects could be canceled at the new regime’s whim, without concern for existing laws or market expectations. The cost of canceling the airport—which had been under construction for at least four years by that point—has been estimated at 126.7 billion Mexican pesos (approximately US$6.3 billion).⁸That doesn’t include the opportunity costs in terms of development potential that such a large-scale project could have delivered for a globally integrated economy such as Mexico’s, the fifteenth largest in the world. Before changing any law and prior to assuming power, the new government had already seeded uncertainty and damaged trust among domestic and international private sector actors. This event, on its own, will have lasting and damaging effects on investment decisions for Mexico, a key determinant of present and future prosperity. The cancelation of the airport was likely one of the reasons that in 2019, López Obrador’s first year in office, Mexico’s long-term trend of low but constant economic growth was disrupted. The country’s economy contracted by 0.2 percent that year, even before COVID-19 started to affect the situation. Moreover, by throwing away public resources already invested in the airport and demonstrating that contracts could be broken at will, it became clear from the start that the rule of law in Mexico was under serious attack, and that economic uncertainty would be the order of the day. It should come as no surprise that, according to data from INEGI—Mexico’s National Statistics Institute—private investment in the country has stagnated since 2018, as fixed gross investment was 11 percent above its 2013 level in July 2018, and it now stands 12 percent below.⁹ The downward trend started well before the pandemic hit and the country’s investment has not yet recovered.

After the new government took office in 2018, a process to capture or diminish the power of autonomous institutions, the main checks and constraints on presidential power, began. Over the course of Mexico’s democratic evolution, a number of autonomous and technical institutions have been created to serve a wide range of functions and goals: quality statistical and geographical information (National Institute of Statistics and Geography, INEGI); the organization of free and fair elections (Federal Electoral Institute, now INE); safeguarding human rights (National Human Rights Commission, CNDH); ensuring transparency and accountability (National Institute for Transparency, INAI); regulating markets with technical autonomy (Federal Economic Competition Commission, COFECE; Federal Telecommunications Institute, IFETEL; and the Energy Regulatory Commission, CRE, among others); and ensuring purchasing power stability (Central Bank, Banxico, which was granted autonomy in 1994). The new regime well understood that these institutions were put in place to limit power, to create boundaries for government action, and to offer technical considerations for the regulation of markets. To weaken many of these and other autonomous agencies, López Obrador has used his legislative majorities to appoint unfit loyalists to lead some of them or fill vacancies on their boards, hobbling their institutional and decision-making capacity.

These steps have already had significant effects. For example, a truly independent Human Rights Commission¹⁰ would have scrutinized the creation of a new Guardia Nacional (National Guard), under the command of the military, meant to control public safety. This key project of López Obrador’s contravenes the civilian nature of the Mexican state and is now being challenged in court as unconstitutional.¹¹ As a further example, López Obrador has de facto eliminated private sector investment in the energy sector, especially in clean energy and oil exploration and extraction partnerships, a move that is being challenged by the United States and Canada within the United States-Mexico-Canada Agreement (USMCA) dispute-settling mechanism.¹² This could have been prevented if COFECE and CRE had been allowed to maintain their autonomy, independence, and respect. Another strategy to prevent the proper functioning of independent agencies has been to leave vacancies open without making new appointments. In fact, in November 2022 the Mexican Supreme Court ruled that the failure to name candidates to lead COFECE was in violation of the constitution.¹³

The administration’s efforts to either eliminate or co-opt the sources of control on its power are evident enough,¹⁴ but perhaps too subtle to capture on a quantitative index. Changes in the way institutions are formed and operate affect the way freedom is experienced on a daily basis by both the Mexican people and stakeholders with interests or investments in the country. But these issues are often not reflected in constitutional or legal changes that can be easily identified. Instead, they are part of a series of new practices, and a political environment that favors discretion and personal politics over the predictability of laws and institutions.

Furthermore, the relationship between Mexico’s three branches of government (executive, legislative, and judicial) suggests that checks and balances on presidential power are weakening across the board. AMLO has attacked the autonomy of the Mexican Supreme Court, made questionable appointments to the bench, and even publicly acknowledged that he has exerted pressure on the court on a range of issues in an effort to tip the scales in favor of the government’s interests and vision.¹⁵

Meanwhile, MORENA and its allies, the Labour Party, Green Party, and Social Encounter Party, have enjoyed a comfortable majority since 2018 that allows them to modify laws and regulations and to approve the annual budget without support from the opposition. Mexico’s legislature had actively served as a check on presidential power since 1997, when Ernesto Zedillo became the first president whose party did not have a majority in Congress. Today, it has been relegated nearly to the role of rubber-stamping the administration’s proposals. The most consequential pieces of legislation over the last four years have been drafted by the government and approved by Congress “without changing a comma,” in accordance with López Obrador’s wishes.¹⁶ The only backstop has come in the Senate, where the president lacks the supermajority needed to change the constitution without help from opposition legislators.

In the context of scarce and increasingly expensive capital to finance development projects, which are essential for the creation of prosperity, the budgetary freedom that the government enjoys as a result of its congressional majority has enabled it to prioritize three pet projects: the Tren Maya, the Refinería Olmeca, and the AIFA airport. All three projects merit serious scrutiny in terms of their financial sustainability, contract transparency, and environ-mental impact.

The Tren Maya (Mayan train), originally budgeted at US$6 billion, is now expected to cost around US$15 billion and rising¹⁷ and has raised concerns over the potential destruction of the Mayan rainforest, significant environmental damage to its ecosystem, and the threat it poses to both local communities and travelers, given the fragile underground system of caves and rivers that lies under the Yucatán peninsula.¹⁸ Despite the fact that the train project lacks legally required environmental assessments, and that the courts have ruled in favor of suspending construction on several occasions, the government has used legal sleights to continue building. Compounding the problems, a number of private investors withdrew their support for the project, assessing it to be financially unviable. This is why Tren Maya has become a “pet project,” funded by tax resources.¹⁹

The Refinería Olmeca (Olmec refinery), an oil processing facility built over a swamp in the president’s home state of Tabasco, was inaugurated before it started to function, and has flooded every time a strong storm washes over the region. As of October 2022, the project was 46 percent over budget and has yet to refine a single drop of oil.²⁰ The AIFA airport (Felipe Ángeles International Airport), meanwhile, was built by the military with little to no transparency, was exempt from public procurement regulations, and is a long way from proving itself either operationally and economically viable.

When looking at how free Mexico really is, the significantly increased role of the military in public life is also worth consideration. Giving the armed forces the power to participate in a wide range of productive activities, in addition to control over domestic security, is in direct conflict with Mexicans’ fundamental freedoms. For almost the last century, Mexico’s military has been in charge of national security and helping respond to natural disasters such as earthquakes and hurricanes. This has been in keeping with the role assigned by Mexico’s constitution to the country’s Secretariat of Defence (SEDENA) and Navy (SEMAR). Starting with President Felipe Calderón (2006–12) and through President Enrique Peña Nieto’s term (2012–19), the military also collaborated with civilian authorities in limited ways to ensure public safety, especially in operations to capture drug kingpins and destroy drug labs or plantations. This was done under a temporary legal exception, the constitutional support for which was questioned by advocacy groups that were hopeful the military’s role in public safety would end under AMLO’s leadership. However, despite running a campaign that promised to “return the military to the barracks” and “strengthen civil police and security agencies,” the president has dramatically changed his position since coming to office.²¹ The military has taken over responsibility for public safety through the newly created Guardia Nacional and has expanded its influence into other areas that were previously reserved either for the private sector or the government. Today, the military controls ports, customs screenings, and airports; builds infrastructure projects such as the Tren Maya and the AIFA airport (the latter is also operated by the military); has built over 1,000 community bank branches; distributes gasoline, gas, and fertilizers; prints textbooks for public schools; detains migrants from Central America on their way to the United States; and may soon be running a commercial airline company “to lower costs.”²² And these are just some of the dozens of functions assigned to the military that have been documented by civil society organizations and which are legally intended to be in the hands of civilian agencies.²³ Moreover, given the secrecy that protects so-called security tasks from scrutiny, the military has been able to withhold important information about all its activities, including its budget allocations. The military has thus operated with little to no accountability, affecting the rule of law. Here the Mostly Free tag clearly starts to crack.

When faced with criticism and questions from the media and civil society, the president has resorted to direct, personal attacks questioning his critics’ legitimacy and intentions. He has called out journalists by name, and even exposed the confidential tax information of those who confront him.²⁴ Before the administration assumed office, Mexico was already one of the most dangerous countries in the world for journalists.²⁵ But the intimidating environment for media and critics has only gotten worse. Those who oppose the government are referred to as “adversaries,” or “los conservadores” (the conservatives), and deemed ultimately corrupt, delegitimizing them as valid interlocutors. Time and time again, those who do not subscribe to the president’s thinking have been referred to as “enemies of the people,” “racist,” “classist,” “aspirational,” “hypocrites,” “angry,” and even “fascists.”²⁶ This level of confrontation on a daily basis (the president addresses the media every morning in rambling press conferences) has a clear “chilling effect” on freedom of speech.

Mexico: Shades of gray in prosperity

Given all the above, it is clear that the Indexes do not fully account for the fragility of freedom in Mexico—and all the ways it has been undermined in recent years. A similar, though less extreme, dynamic can be seen in the Indexes’ view of Mexico’s prosperity. Here, Mexico is considered a Mostly Prosperous country, ranking 53rd out of 174 countries. Broken down by category, Mexico ranks 64th in income, 69th in environment and 78th in health. So where does the 53rd position come from? Mainly from happiness.

According to the Prosperity Index’s measurement, Mexicans are relatively happy, with a score of 71.4 (37th out of 174 countries). This result is not surprising, considering historical measures of happiness in the country derived from culture, social structures, and family safety nets.²⁷ But again, disaggregating the elements of prosperity helps shed light on important nuances.

The pandemic hit the world’s economy in an unprecedented way, and Mexico was no exception. But Mexico’s decline in growth began before the pandemic, as did the negative follow-on effects of that lack of growth, including increased poverty, reduced access to healthcare, and decreased private investment. On most indicators, Mexico has not yet returned to its pre-pandemic levels.

Source: Compiled by the author with data from INEGI (“Producto Interno Bruto Trimestral,” Instituto Nacional de Estadística y Geografía (INEGI), https://www.inegi.org.mx/temas/pib) and CONEVAL (“Pobreza en México,” Consejo Nacional de Evaluación de la Política de Desarrollo Social (CONEVAL), https://www.coneval.org.mx/Medicion/Paginas/PobrezaInicio.aspx).

As is usually the case when approaching social science questions, proving causation here may not be feasible. Are the negative outcomes a direct result of the erosion of the rule of law and the environment of uncertainty that Mexico has experienced since 2018? It is difficult to prove. But if wealth creation is a prerequisite for better wealth distribution, the negative average growth rate of the last four years would suggest that increased poverty levels—and thus a lack of prosperity in absolute terms—are at least in part the product of a deterioration in individual freedoms, democratic retrenchment, and the resulting damage to government capacity and private sector certainty, both of which are essential for social progress and economic prosperity. The government has tried to blame the pandemic,²⁸ the war in Ukraine, inflation as a “global phenomenon,”²⁹ and even the Mexican Central Bank³⁰ for sluggish growth and the increase in poverty during its administration. But what is clear is that the country is today less prosperous than before December 2018.

To be sure, this worrying trend is also revealed by a wider look at variation in the Indexes over time. Mexico’s freedom score in 2021 was 58.2, down from 59.4 in the previous measurement (2016). Mexico’s prosperity score in 2021 was 58, down from 60.7 in 2016. Hence, even if Mexico is categorized as a Mostly Free, Mostly Prosperous country, it is on a downward trajectory, and one that could worsen abruptly over the next few years if the rule of law continues to deteriorate and if an increasingly authoritarian regime advances further. When compared with the rest of the world’s economies, Mexico is a clearly middle-income country, the fifteenth largest economy in the world, and a member of reduced-membership organizations such as the G20 and the Organisation for Economic Co-operation and Development (OECD). But a closer look at relevant data—economic growth, inequality, income, extreme poverty, poverty, and access to basic rights and services, such as food and nutrition, health, education, social security, housing, and housing quality and services (electricity, water, sewage, overcrowding)—also supports the notion that prosperity in the country is deteriorating.

Populism pills for Mexico?

At first sight, it appears that Mexico’s light green colouring on the Freedom and Prosperity Indexes map is a positive sign. In digging deeper into recent political and economic trends, this paper aims to ask new questions raised by additional qualitative information. The Indexes are more relevant than ever, not only for Mexico but for the world. When accompanied with an in-depth analysis for each country that can add a prism through which to view the Indexes’ numbers, they can serve as even more powerful tools for analysis, decision making, and advocacy. Given the reality of what is taking place in Mexico, in analysing the country one needs to ask not just how prosperous or free it is today, but how likely it is that the country could fall into the Mostly Unfree and Mostly Unprosperous categories in the near future.

Mexico is a large economy that is now fully integrated into North American value chains and, from there, with the world’s value chains. Its public finances are strong, and its fiscal stance is on a sustainable trajectory with a debt-to-GDP ratio below 50 percent. Macroeconomic variables look good despite obvious economic stagnation. Mexico is also a resilient democracy, with relatively free and fair elections organized by a still independent electoral authority, though this could become significantly weaker following reforms passed by the government at the end of 2022, which will be contested at the Supreme Court of Justice. But Mexico, like many other countries, is trapped by polarization and populism. And while populism might be producing immediate relief for some—as can be seen in the high approval rates of the president and high happiness measure in the Prosperity Index—these conditions will ultimately lead to long-term structural damage that will take decades to overcome. Constant deterioration of the rule of law and the concentration of power since 2018 has put Mexico on a slippery slope on which the norms and institutions that have sustained our economic and political freedoms could suffer deeper damage.

Still, one needs to reckon with the fact that 60 percent of Mexicans approve of López Obrador’s actions.³¹ Despite the weakening of the institutional and democratic landscape and poor economic performance (this government is in fact likely to be the worst performer in terms of growth in the last forty years), many people are unbothered by the negative results because they have taken populism’s “poisoned pill”: an appealing narrative that vindicates those who have been left behind, those who legitimately aspire for a better life for themselves and their families, those who are rightfully distrustful of the government given historical wrongs, and those who now receive larger subsidies from the government. AMLO is an exceptional social leader capable of speaking to a wide audience, and he connects emotionally with his political base like no other Mexican president in recent history. People relate to his simple “us vs. them” dichotomy. While there are strong arguments pointing to the current government’s shortcomings in terms of performance, few can deny that the president is quite a successful politician.

What is worrisome is that more and more leaders around the world have been elected in free and fair democratic processes, only to incrementally undermine institutions, consolidate power, and grow more authoritarian once in office. This is precisely why further data and analysis of trends and nuances are often a necessary complement to the Indexes. While Mexico is still classified as a democracy—and still is one—there exists a latent risk of the country becoming just a democratic facade in front of an autocratic regime. For anyone looking at the Freedom and Prosperity Indexes in the future, the lesson this paper intends to share is that, for many countries, freedom and prosperity are still fragile ideals that depend on a series of conditions that must be constantly upheld. Some of these might be obvious, but others are quite subtle and evolve in ways that are barely visible to an outside eye. It is thus important to complement the Indexes with layers of qualitative analysis that better detect when significant fractures are appearing in a system, before a country and its citizens suffer significant reversals in freedom and prosperity, or a return to the dark era of authoritarianism. We need to measure in order to understand, understand to advocate, and advocate in order to change for the better.

Vanessa Rubio-Márquez is a former senator and deputy minister in the Mexican government.

1 Mariano Sánchez-Talanquer and Kenneth F. Greene, “Is Mexico Falling into the Authoritarian Trap?,” Journal of Democracy 32, no. 4 (October 2021), 56–71.

2 Dan Negrea and Matthew Kroenig, “Do Countries Need Freedom to Achieve Prosperity? Introducing the Atlantic Council Freedom and Prosperity Indexes,” Atlantic Council, accessed February 9, 2023, https://www.atlanticcouncil.org/in-depth-research-reports/report/do-countries-need-freedom-to-achieve-prosperity.

3 Kathleen Bruhn, “‘To Hell With Your Corrupt Institutions!’: AMLO and Populism in Mexico” in Populism in Europe and the Americas: Threat or Corrective for Democracy?, ed. Cas Mudde and Cristobal Rovira Kaltwasser (Cambridge: Cambridge University Press, 2012), 88–112.

4 Guillermo Castañares, “Importa Más el Bienestar del Pueblo Que el Crecimiento Económico, Afirma AMLO en Informe,” El Financiero, September 1, 2022, https://www.elfinanciero.com.mx/economia/2022/09/01/importa-mas-el-bienestar-del-pueblo-que-el-crecimiento-economico-afirma-amlo-en-informe.

5 Gabriela Frías, “AMLO Llama ‘Traidores a la Patria’ a Quienes Apoyan Queja de EE.UU. y Canadá por el T-MEC,” CNN, July 22, 2022, https://cnnespanol.cnn.com/video/amlo-traidores-a-la-patria-eeuu-canada-tmec-sector-energetico-redaccion-mexico.

6 Azam Ahmed and Paulina Villegas, “López Obrador, An Atypical Leftist, Wins Mexico Presidency in Landslide,” New York Times, July 2, 2018, https://www.nytimes.com/2018/07/01/world/americas/mexico-election-andres-manuel-lopez-obrador.html.

7 Elisabeth Malkin, “Mexico’s Incoming President Plans to Cancel Giant New Airport Project,” New York Times, https://www.nytimes.com/2018/10/29/world/americas/mexico-incoming-president-cancel-airport.html.

8 Luis Guillermo Woo Mora, Las Consecuencias del Pecado Original: Costos Económicos y Distributivos de la Política Populista en México, Centro de Estudios Espinosa Yglesias, December 2022.

9 “Inversión Fija Bruta,” Instituto Nacional de Estadística y Geografía (INEGI), accessed December 6, 2022, https://www.inegi.org.mx/temas/ifb.

10 “¿Quién es Rosario Piedra Ibarra, la Próxima Presidenta de la CNDH?,” Aristegui Noticias, November 11, 2019, https://aristeguinoticias.com/1111/lomasdestacado/quien-es-rosario-piedra-ibarra-la-proxima-presidenta-de-la-cndh.

11 “ONU Derechos Humanos preocupada Porque la Guardia Nacional de México Pase a Estar Bajo Control Militar,” Noticias ONU, United Nations, September 9, 2022, https://news.un.org/es/story/2022/09/1514201.

12 Ana Swanson, “The Biden Administration Will Challenge Mexico’s State Control of its Energy Industry,” New York Times, July 21, 2022, https://www.nytimes.com/2022/07/20/business/mexico-energy-usmca.html

13 Rolando Ramos, “Dan 30 Días Naturales a AMLO Para que Envíe Candidatos a la Cofece,” El Economista, November 28, 2023, https://www.eleconomista.com.mx/politica/SCJN-da-a-Lopez-Obrador-plazo-de-30-dias-para-enviar-sus-propuestas-de-comisionados-de-la-Cofece-20221128-0072.html.

14 “Todo Fue una Farsa, una Simulación: AMLO Sobre los Organismos Autónomos,” 24 Horas, June 13, 2022, https://www.24-horas.mx/2022/06/13/todo-fue-una-farsa-una-simulacion-amlo-sobre-los-organismos-autonomos.

15 Claudia Guerrero and Antonio Baranda, “Amlo Reconoce que Presionó a la Corte, REFORMA,” REFORMA, September 6, 2022, https://www.reforma.com/aplicacioneslibre/preacceso/articulo/default.aspx?__rval=1&urlredirect=https%3A%2F%2Fwww.reforma.com%2Famlo-reconoce-que-presiono-a-la-corte%2Far2465598%3Freferer.

16 Roberto Garduño and Fabiola Martínez, “AMLO: Ni Una Coma Debe Cambiarse a la Iniciativa Eléctrica,” La Jornada, February 10, 2021, https://www.jornada.com.mx/notas/2021/02/10/politica/amlo-ni-una-coma-debe-cambiarse-a-la-iniciativa-electrica.

17 Jesús Vázquez, “Costo de la Obra del Tren Maya Aumenta 150%,” El Economista, August 8, 2022, https://www.eleconomista.com.mx/estados/Costo-de-la-obra-del-Tren-Maya-aumenta-150-20220807-0077.html.

18 Maria Abi-Habib and Alejandro Cegarra, “Over Caves and Over Budget, Mexico’s Train Project Barrels Toward Disaster,” New York Times, August 28, 2022, https://www.nytimes.com/2022/08/28/world/americas/maya-train-mexico-amlo.html.

19 “Grupo México y AMLO ‘Hacen las Paces’: Llegan a Acuerdo por Tramo 5 del Tren Maya,” El Financiero, November 29, 2022, https://www.elfinanciero.com.mx/nacional/2022/11/29/grupo-mexico-y-amlo-hacen-las-paces-llegan-a-acuerdo-por-tramo-5-del-tren-maya.

20 “AMLO Reconoce Aumento del 46% en Costo de Refinería Dos Bocas,” El Financiero, October 8, 2022, https://www.elfinanciero.com.mx/nacional/2022/10/08/amlo-reconoce-aumento-del-46-en-costo-de-dos-bocas.

21 Lidia Arista, “‘Cambié de Opinión’: AMLO Explica Por Qué No Regresó a Militares a Los Cuarteles,” Expansión, September 6, 2022, https://politica.expansion.mx/presidencia/2022/09/06/cambie-de-opinion-amlo-explica-por-que-no-regreso-a-militares-a-los-cuarteles.

22 Aldo Munguía, “Gobierno Cierra Compra de Marca Mexicana de Aviación por 816 mpd,” El Financiero, January 6, 2023, https://www.elfinanciero.com.mx/empresas/2023/01/06/gobierno-cierra-compra-de-marca-mexicana-de-aviacion-por-816-mdp.

23 Sara Elena Velázquez Moreno, Estefanía Álvarez, Catalina Pérez Correa, and Alejandro Madrazo, “Inventario Nacional de lo Militarizado (2021),” Política de Drogas, accessed December 6, 2023, https://politicadedrogas.org/site/proyecto/id/27.html.

24 “Inai Ordena Sancionar a AMLO por Exhibir Datos Personales de Loret de Mola,” El Economista, August 18, 2022, https://www.eleconomista.com.mx/Inai-ordena-sancionar-a-AMLO-por-exhibir-datos-personales-de-Loret-de-Mola-vy202208180004.html.

25 Nina Lakhani, “Mexico World’s Deadliest Country for Journalists, New Report Finds,” Guardian, December 22, 2020, https://www.theguardian.com/world/2020/dec/22/mexico-journalists-deadly-cpr-press-freedom.

26 “‘Retrogradas, Hipócritas y Fascistas’: Así Calificó AMLO a Legisladores que Van Contra Iniciativa del PRI,” Infobae, September 14, 2022, https://www.infobae.com/america/mexico/2022/09/14/retrogradas-hipocritas-y-fascistas-asi-califico-amlo-a-legisladores-que-van-contra-iniciativa-del-pri.

27 “¿México Es un País Feliz? Esto Dice el Informe Mundial de la Felicidad 2022,” Expansión, March 22, 2022, https://expansion.mx/mundo/2022/03/22/mexico-es-un-pais-feliz.

28 “‘Se Nos Cayó la Economía, Pero Ya Estamos Saliendo’, Dice Amlo en Cuarto Informe de Gobierno,” El Financiero, September 1, 2022, https://www.elfinanciero.com.mx/nacional/2022/09/01/se-nos-cayo-la-economia-pero-ya-estamos-saliendo-dice-amlo-en-cuarto-informe-de-gobierno

29 Jatziri Magallanes, “Inflación es Producto del Covid-19 y Por la Guerra en Ucrania: AMLO,” MVS Noticias, May 14, 2022, https://mvsnoticias.com/nacional/2022/5/14/inflacion-es-producto-del-covid-19-por-la-guerra-en-ucrania-amlo-552424.html.

30 Mónica Valladolid, “López Obrador Critica Nuevamente la Labor de Banxico Porque Sólo Ha Buscado Controlar la Inflación,” Forbes México, November 11, 2022, https://www.forbes.com.mx/lopez-obrador-critica-nuevamente-la-labor-del-banco-de-mexico.

31 “Aprobación Presidencial,” Oraculus, last updated February 7, 2023, https://oraculus.mx/aprobacion-presidencial.

The post Mexico “Mostly Free”? Mexico “Mostly Prosperous”?: Uncovering shades of gray in the Freedom and Prosperity Indexes appeared first on Atlantic Council.

A midterm report card for Mexico’s USMCA progress

Luz María de la Mora — Thu, 06 Jul 2023 22:45:36 +0000

The United-States-Mexico-Canada Agreement (USMCA) is now halfway between its entry into force three years ago and its first required joint review in 2026. At this halfway point in the agreement’s first phase, what are the upcoming challenges for Mexico as it seeks to maximize the benefits of its USMCA membership?

The USMCA has certainly been successful in increasing the volume of Mexico’s trade with the United States and Canada. According to the US Census Bureau, in April 2023, the United States imported more goods from Mexico than from any other country; in 2022, Mexico-US trade was almost 27 percent higher than in 2019, and Mexico-Canada trade grew 21.8 percent in these same years. Between 2020 and 2023, Mexico received fifty billion dollars in US and ten billion dollars in Canadian investments.

This increase in trade and investment flows is explained not only by the USMCA’s implementation, but also by the Biden administration’s decision to diversify supply chains, relocate production to North America, and “de-risk” from China. By seeking to reduce the vulnerability of supply chains in North America, the integration facilitated by the USMCA acquired greater relevance for companies, workers, governments, and societies.

Even though the agreement has spurred dynamism in trade and investment, its implementation has not gone without serious challenges and confrontations, which Mexico will need to address before the 2026 joint review. These include differences in the way the three countries have chosen to comply with the USMCA, heightened scrutiny on labor and environmental issues, and incomplete implementation of the agreement’s provisions.

Unsettled disputes

First, Mexico has faced difficulties on both sides of the USMCA’s dispute settlement mechanism, established in Chapter 31. Mexico’s use of this mechanism signals that it considers the agreement an effective instrument to defend its commercial and investment interests. Together with Canada, Mexico requested the establishment of a panel to settle its differences with the United States regarding the interpretation of the methodology to determine the regional value content of essential auto parts in cars manufactured in North America. The panel ruled in favor of Mexico, but there seems to be no interest in enforcing the ruling.

Mexico has also been the target of Chapter 31. Both the United States and Canada requested consultations regarding Mexico’s energy policy in July 2022 and restrictions on trade in genetically modified corn in June 2023. While both consultation processes could still lead to requests for the establishment of panels, the parties have been in conversation regarding the substance of their concerns.

Chapter 31 is of great value to the private sector in North America because it offers a legal tool to solve differences. The USMCA offers a dispute settlement mechanism that works, unlike the World Trade Organization Dispute Settlement Body, which is paralyzed. The USMCA’s panel reports are binding, and panel decisions are not affected by domestic political pressures.

However, it is the three governments’ responsibility to comply with the panels’ decisions, even if they are unfavorable, and to make sure that rulings are fully enforced. Not doing so undermines the value of the USMCA dispute settlement mechanism and the agreement itself.

High standards, heightened scrutiny

Second, Mexico has been subject to scrutiny on labor and environmental matters, reflecting US and Canadian national priorities and their need to respond to political pressure from their own domestic constituencies. Regarding labor, under the Rapid Response Labor Mechanism, the United States has initiated eleven cases against Mexico, and Canada has initiated one. Mexico’s labor authority has sought to address the concerns raised in each case, avoiding sanctions and prohibitions on exports.

On environmental matters, Mexico has faced questioning from its partners regarding compliance with its environmental legislation and its USMCA obligations. For example, in February 2022, the United States requested consultations with Mexico on the protection of the vaquita porpoise, which is associated with totoaba illegal fishing. In May 2023, the US Fish and Wildlife Service determined that Mexico has not done enough to prevent the illegal trafficking of totoaba, so later this month, US President Joe Biden could decide to impose an embargo on the trade of wildlife products from Mexico, in line with Mexico’s Convention on International Trade in Endangered Species of Wild Fauna and Flora obligations, which are also recognized in the USMCA. In labor and environmental affairs, the United States and Canada have used and may continue to use the USMCA mechanisms to pressure Mexico to comply with its obligations, since these issues are key to their own domestic political agendas.

Unfinished business

Third, Mexico has yet to fully implement several USMCA provisions. These include the Asia-Pacific Economic Cooperation Cross-Border Privacy Rules Framework, established in Chapter 19, which is already overdue. In addition, Mexico will have to become a signatory to the 1991 agreement of the International Union for the Protection of New Varieties of Plants as provided in Chapter 20. Likewise, the USMCA has a built-in agenda of future negotiations, such as the inclusion at the sub-federal level of provisions on state-owned companies and designated monopolies (Chapter 22), which should have been concluded in June 2023. Mexico needs to make sure that these provisions are enforced according to its USMCA commitments, since this will align its regulations and policies with those of its North American partners.

At the halfway point between USMCA’s entry into force and its first joint review, Mexico has seen a substantial increase in its trade and investment flows, which are key engines for its economic growth. However, Mexico still faces serious challenges in the full implementation of its commitments and in making sure that the United States also complies with a panel report favorable to Mexico. It is in Mexico’s interest to fully comply with the agreement while also requesting compliance from the United States, since that will provide certainty and predictability to investors in the region. This will facilitate the agreement’s extension at the six-year review in 2026 and will allow Mexico to promote opportunities for North American productive integration and the relocation of supply chains.

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Guevara in El Heraldo de Mexico on integration, interoperability, and resilience (in Spanish)

Inigo Guevara Moyano — Wed, 26 Apr 2023 13:11:54 +0000

This article was originally published in Spanish by El Heraldo de Mexico. An English translation of the article is included below.

As the war in Ukraine enters its second year and the cold war between the United States and China intensifies, it is interesting to see how other countries begin to adjust their security policies.

There are relative changes, often imperceptible when they occur in isolation, however, in concert and with context, these changes say a lot about the rearrangement of world geopolitics.

On April 4, Finland officially became the 31st member of the North Atlantic Treaty Organization (NATO). It is expected that the integration of the Finnish military forces into the NATO command and control system will be easy, thanks to the fact that Finland was part of the “Partnership Interoperability Initiative.”

That program establishes deep connections between NATO and non-member countries that allows them to establish systems and processes that facilitate cooperation. Countries like Australia, Georgia, Jordan, Ukraine, and Sweden are also members of that initiative.

Finland’s accession doubles Russia’s land border with NATO, but the military alliance not only gains territory from which to reinforce the alliance’s northeastern flank (and the Baltics), it also gains an ally with a significant military force, technologically advanced and with a historic grudge against Moscow.

Let’s remember that Finland was invaded by the Soviet Union in November 1939. At that time, Moscow feared that Finland would be used by Germany to attack the city of Leningrad (today Saint Petersburg).

At that time Finland was not a member of any alliance, but still managed to hold off the Soviet forces for months, in what was called the Winter War. In March 1940 Finland signed the Treaty of Moscow in which it ceded 11 percent of its territory to the USSR.

Together with Finland, Sweden applied to join NATO in May 2022, but remains waiting for Turkey to accept it. Under NATO rules, all member countries must approve the entry of new allies. Turkey requires Sweden to implement reforms to go after the funding networks of the Kurdistan Workers’ Party (PKK), an armed separatist movement branded as terrorist organization.

NATO’s Secretary General is confident that Sweden can be formally admitted to the alliance in July. This confidence emanates from the polls that put the main political rival of Turkish President Erdoğan, Kemal Kılıçdaroğlu (KK), 12 points ahead in the upcoming elections on May 14. KK announced that, if he wins the presidency of his country, he will lift the political veto on Sweden to join NATO.

On the other side of the world, in North America, Mexico, Canada and the United States carried out the NAMSI PACEX 2023 naval exercise off the coast of Manzanillo at the end of March. Fortunately, despite the current political rhetoric, the Secretary of the Navy (SEMAR) maintains a bond of cooperation with its partners, both of which are NATO members.

The spirit of these exercises serves to facilitate cooperation and interoperability between naval forces. It would be worthwhile for the Mexican armed forces to explore additional options to increase their interoperability capacity, so that when political resistance fades, Mexico has the option of formally and relatively easily integrate into the geopolitical camp of free democratic countries.

Fellow

Inigo Guevara Moyano

Scowcroft Center for Strategy and Security Transatlantic Security Initiative

Americas Arms Control

The Transatlantic Security Initiative, in the Scowcroft Center for Strategy and Security, shapes and influences the debate on the greatest security challenges facing the North Atlantic Alliance and its key partners.

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Guevara in El Heraldo de Mexico on the global divide on responding to the war in Ukraine (in Spanish)

rarick — Tue, 14 Mar 2023 14:52:18 +0000

This article was originally published in Spanish by El Heraldo de Mexico.

Russia’s war against Ukraine turned one year old on February 24. The conflict is generating a profound geopolitical realignment and, if it does not end soon, it is very possible that it will directly involve other powers and create an even deeper world division.

The world is now divided between countries that show solidarity with Kyiv, those that are indifferent—supposedly neutral [lukewarm]—and those that excuse or support Russia’s aggression. The latter are few.

Solidarity with Ukraine ranges from symbolic displays like lighting public buildings yellow and blue, to imposing economic sanctions on Russia, to direct aid in the form of financial resources, intelligence, and weapons.

The solidarity flowing to Ukraine constitutes the largest military mobilization in Europe since the Second World War. Support goes from countries like Canada and the US, to countries that were under threat and under the Soviet yoke during the Cold War, but also from countries that were until recently neutral. As an example, Morocco, broke its neutrality and announced in December that it would transfer its T-72 tanks to Ukraine.

It is estimated that Russia deploys 300,000 troops inside Ukraine. British intelligence estimates that Russia has lost 40 percent of its military strength and has already mobilized 97 percent of its deployable army, which has it very stressed. The Ukrainian counteroffensive, if well equipped, will make a significant change this Spring.

Countries willing to help Russia are attracting more and more international attention. Iran has agreed to receive 24 Russian Sukhoi Su-35 fighter jets in exchange for continuing to send drones and missiles. As a consequence, the EU announced sanctions against companies that trade with Iran, especially electronics. The most direct pressure came from the US, whose special forces intercepted a shipment of Iranian weapons destined for Yemen and forwarded them…to Ukraine.

Of all the countries that could support Russia, China is the only one that could drag out the conflict. Last week, the Chinese foreign minister met Putin in Moscow. Chinese military supplies—possibly drones and ammunition—would likely flow only with very favorable conditions for China—such as permits to exploit mineral areas in Siberia and/or the Arctic—but in the Russian perspective, these concessions will likely be acceptable to continue their war.

For China, having the option to support Russia is a strategic geopolitical opportunity, as it puts it in a position to 1) gain access to land and resources it longs for; 2) condition its support on a (violent) “reunification” of Taiwan; 3) prolonging the conflict could test the level of resolve and even the military capacity of the US and Europe, to intercede for Taiwan, although, on the other hand; 4) withholding it, could allow Russia to collapse, to later take over Siberia. There are many options, all very tempting for the Chinese Dragon.

Mexico continues in a supposedly neutral, lukewarm, position that does not benefit it in its relationship with Washington or with Europe. For countries with strong resistance to providing military aid there are also options: implement sanctions and donate humanitarian aid to relieve the Ukrainian civilian population. Unfortunately, it will be the people of Mexico, not just the current administration, who will go down in history as “lukewarm.”

Fellow

Inigo Guevara Moyano

Scowcroft Center for Strategy and Security Transatlantic Security Initiative

Americas Arms Control

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Mayors and governors will drive the future of North American economic integration

Willow Fortunoff, Mary Ann Walker — Tue, 28 Feb 2023 22:17:43 +0000

Recently, US President Joe Biden toasted a group of governors, praising their ability to “get things done”—without the lengthy delays and debates of national politics. And last month, US Secretary of State Antony Blinken told mayors that their “leadership is vital, and it’s going to be even more so in the years ahead.”

Taken together, their comments signal a broader recognition from the Biden administration of the power of local officials to help achieve national goals. But as Biden works to boost North American economic competitiveness vis à vis China, US governors and mayors are being left out of the conversation. They’re not the only ones: Local leaders across North America, from Mexico to Canada, are being left out of discussions geared toward improving the continent’s economic integration. Biden should tap into the economic and political power of local leaders, and he should start by including them in diplomatic summits such as the North American Leaders Summit (NALS).

Local leaders drive day-to-day collaboration throughout North America, yet they weren’t invited to the NALS last month. So while Biden, Mexican President Andrés Manuel López Obrador (known as AMLO), and Canadian Prime Minister Justin Trudeau met to “promote a common vision for North America,” that vision will be unachievable without the local officials who have built a regional web of economic integration capable of weathering national partisan shifts. Biden, AMLO, and Trudeau should embrace this web by encouraging local and national leaders to establish multi-level ties between their governments and to deepen subnational bonds across borders.

A web of economic integration

The North American countries have a crucial, yet also tense, relationship: That was evident at NALS, which took place amidst Washington and Ottawa’s ongoing disputes with Mexico City’s energy policies. The summit itself reflects this inconsistency in the North American relationship, as last month’s convening was the first in five years and was pushed back several times. The US-Mexico relationship has been complicated by national politics, including when former US President Donald Trump called for a border wall and when AMLO boycotted the US-hosted Summit of the Americas in 2022. The US-Canada relationship also experienced friction during the nineteen-month COVID-19 border closure, the longest border restriction the countries have shared in history.

But US mayors and governors routinely build a foundation of cooperation with their cross-border counterparts focused on practical priorities such as employment and economic growth. Mexico and Canada are the United States’ top trading partners, and the economic interlinkages are most obvious in border states. In 2021, Mexican foreign-owned enterprises in California provided nearly ten thousand jobs, while seven in every ten dollars invested in Baja California, Mexico, come from the United States. The same year, Mexican companies investing in Texas generated 5,364 jobs while Texan companies investing in Mexico created 9,110 jobs. The economic impacts are particularly clear in smaller states such as Vermont, where Canadian-owned businesses employed nearly three thousand people in 2021 and Canadian tourists have contributed two hundred million dollars annually to the state’s economy.

Such collaboration is bipartisan. In April 2021, North Dakota Governor Doug Burgum, a Republican, created the Essential Worker Cross-Border Vaccination Initiative with the Manitoba premier to vaccinate essential workers transporting goods and services across the border, ensuring that commercial flows between their communities remain ongoing. In April 2022, Texas Governor Greg Abbott, a Republican, signed memoranda of understanding with the governors of Mexico’s four border states to enhance border security and mitigate slowdowns in commercial border traffic. And in October 2022, California Governor Gavin Newsom, a Democrat, announced an agreement between Californian and Mexican border communities to support the construction of the Otay Mesa East Port of Entry at the San Diego-Tijuana border, which is being built as part of an effort to boost economic cooperation and trade.

Locally driven economic relationships pave the way for economic integration on a national level. Javier Martínez, founder and president of the Association of Mexican Entrepreneurs Los Angeles, told us that investment between California and Mexico drives the “incorporation of small and medium firms [into] the supply chains of the global firms,” strengthening national economic collaboration and opening opportunities for practices such as nearshoring. Local leaders are much more than implementers of national economic policies—they’re incentivized by the potential economic benefits to shape trade relationships from the bottom up. This was evident in 2017 and again in 2019, when Mexican and US mayors came together to support a modernized North America Free Trade Agreement and later urge the passage of the US-Mexico-Canada Agreement (USMCA). In 2022, US and Canadian mayors prepared a joint letter calling on their national governments to repeal the remaining COVID-19 border restrictions and hasten the return to pre-pandemic cross-border exchanges.

The collaboration spearheaded by local leaders is resilient to national partisan shifts. The aforementioned diplomatic disputes between the United States, Mexico, and Canada can impede cooperation and stall advancements in the North American relationship—yet these national-level tensions typically don’t stop cities and towns from promoting trade and tourism with their northern and southern neighbors. Initiatives by Biden, AMLO, and Trudeau to strengthen North American competitiveness may not outlast the national leaders’ terms if they don’t actively engage with the local leaders who have built the region’s economic integration and have a vested interest in its future.

A missed opportunity at NALS

At NALS, national leaders laid out their plans to mount a combined defense against China’s rising economic dominance by overhauling North American industrial capacity and integration. The gathered leaders announced steps to boost their roles in critical-mineral supply chains, which are currently dominated by China. They also pledged to organize the “first-ever trilateral semiconductor forum” as the next move in an escalating contest with China over control of the industry.

These policies aim to reverse a decline in US-based manufacturing that has led to a $382.9 billion US goods trade deficit with China and the US manufacturing workforce declining by more than a third. Because these local leaders have their communities in mind, they’re accustomed to reframing national-security objectives (such as semiconductor manufacturing) as priorities for their districts and constituents. Yet the roster for the trilateral semiconductor forum scheduled for early 2023 only includes “senior industry representatives” and “cabinet level participation” from the three countries. There is no mention of a role for mayors and governors who will play an essential role in forging the requisite economic and diplomatic cooperation from the bottom up.

How to implement this cooperation

North American national leaders should affirm local leaders’ role as trailblazers in their mission of advancing a closer economic alliance. They can do that by making space for local officials at the next NALS, whenever it takes place. The White House should work with US State Department’s Special Representative for Subnational Diplomacy Nina Hachigian to design parallel sessions at NALS that convene local leaders who represent communities that are part of critical-mineral and semiconductor supply chains to compare strategies and report out to national leaders. These sessions should focus on creating city- and state-specific NALS deliverables on economic cooperation and trade that resonate with communities in all three countries.

In contrast to the most recent NALS, mayors from across the Western Hemisphere will convene at this year’s inaugural Cities Summit of the Americas; it’s equally important to bring national leaders to spaces in which local leaders are gathering to ensure that neither perspective is siloed. The US State Department, White House, 24 Sussex, and the Palacio Nacional should ensure that cabinet-level officials and above are also represented at the Cities Summit so that they can get up to speed on their local leaders’ priorities and ideas.

In between the various summits, national leaders should support and expand bilateral initiatives led by cities and states. Many border communities have taken it upon themselves to set up economic commissions: For example, the Los Angeles Mayor’s Office, Mexico’s Foreign Ministry, and the Mexican Council of International Affairs launched the MEXLA commission to deepen ties including trade and energy collaboration. The Arizona-Mexico Commission created an economic development committee to strengthen development efforts, and the Texas Association of Business launched a Mexico Trade and Investment Policy Council to help companies navigate the Texas-Mexico business relationship. On the northern border, Michigan’s Economic Development Corporation established an international trade program that leads business delegations to Canada. Meanwhile, the Buffalo Niagara Partnership signed an agreement with two Ontario Chambers of Commerce to help local businesses take advantage of the cross-border economy and trade. Yet the landscape of bilateral cooperation across North America is made up of these sporadic examples that lack consistency and coordination. Hachigian should take stock of existing subnational initiatives to glean effective strategies and assess where more support is needed.

To strengthen existing initiatives led by local leaders, Hachigian’s Unit for Subnational Diplomacy should assemble the knowledge of local leaders who have been fostering bilateral economic partnerships into a toolkit for all US states to use in building cross-border partnerships. Hachigian’s office can then work to disseminate these toolkits and trainings through existing subnational bodies, such as the National Governors Association and US Conference of Mayors.

The Unit for Subnational Diplomacy should also work with universities, research institutions, and local chambers of commerce to conduct a widespread review of state and city-level economic cooperation with Mexico and Canada to identify the benefits of advancing economic cooperation. This uncovered data can be shared with constituents to substantiate the value of maintaining international commissions, incentivize additional mayors and governors to deepen North American trade relationships, and plainly reveal the impact of local efforts to national leaders.

These steps will equip mayors and governors from all fifty states with the tools to champion economic integration initiatives, further strengthening their role as important advisors to national leaders and crucial players in future policy discussions.

North American local leaders are already getting the job done on the ground; they have earned a seat at the diplomatic table.

Willow Fortunoff is an assistant director at the Atlantic Council’s Adrienne Arsht Latin America Center.

Mary Ann Walker is a member of the Atlantic Council’s Adrienne Arsht Latin America Center Advisory Council.

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Ten minutes at the border: Revving the US and Mexican economies

Nancy Messieh — Mon, 27 Feb 2023 22:05:11 +0000

Ten minutes at the border: Revving the US and Mexican economies

Atlantic Council research shows that a mere 10-minute reduction in wait times at the US-Mexico border can have increasingly positive effects on communities and economies on both sides of the border. The Adrienne Arsht Latin America Center, in collaboration with the Hunt Institute for Global Competitiveness and Colegio de la Frontera Norte, analyzed three major potential economic impacts of this reduction. The first, “The economic impact of a more efficient US-Mexico border: How reducing wait times at land ports of entry would promote commerce, resilience, and job creation,” looks at the impact of a 10-minute reduction for Mexico and the United States on a national level. The second, “The transformative power of reduced wait times at the US-Mexico border: Economic benefits for border states,” looks at the economic impact for the United States’ four and Mexico’s six border states. The third, and final report “US-Mexico commerce: Tracking the final destination and Mexico’s fiscal benefit with Greater Border Efficiency,” tracks the final destination and economic impact of commerce entering the United States via three key ports of entry.

This interactive map summarizes the three reports’ findings. It separates the data into US national benefits, US border benefits, Mexico national benefits, and Mexico border benefits. The red dots analyze three specific ports of entry — San Diego, California; El Paso, Texas; and Laredo, Texas — tracking where cargo passing through each ends up in the United States.

Click along the map to find out more about the economic impact of a 10-minute reduction in wait times at the US-Mexico border.

In-depth research and reports

Report Feb 17, 2023

The transformative power of reduced wait times at the US-Mexico border: Economic benefits for border states

By Alejandro Brugués Rodríguez, Noé Arón Fuentes Flores, David Gaytan, John Gibson, Mayra Maldonado, Jason Marczak, Jorge Eduardo Mendoza Cota, José Ángel Moreno, Roberto Ransom, and Ignacia Ulloa-Peters

Atlantic Council’s new data shows that a mere 10-minute reduction in wait times – without any additional action – can create thousands of Mexican jobs, grow the gross domestic product (GDP) of several Mexican states, and generate hundreds of thousands of dollars in new spending in the United States.

Economy & Business Inclusive Growth

Report Sep 27, 2022

The economic impact of a more efficient US-Mexico border: How reducing wait times at land ports of entry would promote commerce, resilience, and job creation

By Alejandro Brugués Rodríguez, John Byrd, Noé Arón Fuentes Flores, David Gaytan, John Gibson, Camila Hernández, Mayra Maldonado, Jason Marczak, Jorge Eduardo Mendoza Cota, Roberto Ransom, and Ignacia Ulloa

Improvements in border management and the adoption of new technologies at the US-Mexico border have the potential to enhance border security and generate economic benefits for the United States and Mexico through expedited flows of goods and people.

Economy & Business Latin America

Issue Brief Feb 27, 2023

Beyond the US-Mexico border: Destination of final goods, environmental impact, and future scenarios for border relations

By Atlantic Council

Three complementary analyses on the value and final destination of northbound commercial trade flows; the environmental impact of idling vehicles at the US-Mexico border; and three potential scenarion for the future of US-Mexico relations.

Economy & Business Energy & Environment

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Beyond the US-Mexico border: Destination of final goods, environmental impact, and future scenarios for border relations

Atlantic Council — Mon, 27 Feb 2023 20:12:06 +0000

Three complementary analyses to a two-part US-Mexico border report.

A joint analysis by the Atlantic Council’s Adrienne Arsht Latin America Center, the University of Texas at El Paso’s Hunt Institute for Global Competitiveness, and El Colegio de la Frontera Norte.

Analysis 1

US-Mexico commerce: Tracking the final destination and Mexico’s fiscal benefit with greater border efficiency

By Edgar David Gaytán Alfaro, John Gibson, Mayra Maldonado, Jason Marczak, Roberto Ransom, and Ignacia Ulloa-Peters

This report determines the value and final destination of northbound commercial trade flows. Based on limited data, it finds that 45 percent of trade entering the United States remains in border states (Arizona, California, New Mexico, or Texas), while 55 percent is distributed to other regions across the United States. It also evaluates the tax revenue collected by Mexico’s six border states (Baja California, Chihuahua, Coahuila, Nuevo León, Sonora, Tamaulipas) stemming from increased efficiencies at the border. Read our report to find out more about the top 5 receiving states, as well as the economic impact that different regions across the United States would experience following a 10-minute reduction in wait times.

DOWNLOAD report

Analysis 2

Our border environment, water, and air pollution

By The Hunt Institute for Global Competitiveness, University of Texas at El Paso

This environmental impact analysis evaluates the impact idling vehicles have on water and air pollution across the US-Mexico border. Reduced wait times can significantly reduce particulates in the air and water, which currently pose a significant threat to the health of people living in border communities. To find out more about the potential reduction in pollution following decreased wait times, read our report or view our infographic.

DOWNLOAD report

View Report infographic

Analysis 3

Border 2033: Three scenarios for the United States and Mexico

By Peter Engelke, Deputy Director of Foresight, Scowcroft Strategy Initiative; and Nonresident Senior Fellow, Global Energy Center, Atlantic Council

Foresight scenarios help us tell stories about how the future might unfold and are intended to stir imaginative thinking. In this report, we portray three scenarios of a world that might exist ten years from now in 2023 based upon uncertainties in the United States and Mexico’s relationship today. More specifically, we hypothesize what the US-Mexico relationship would look like if 1) there is little to no change in the manners that the United States and Mexico engage, 2) fears over border security leads to an increasingly hardened border, and 3) Mexico and the United States increase collaboration on border issues. Find the full report below.

DOWNLOAD report

Read our two-part US-Mexico Border report

Report Sep 27, 2022

The economic impact of a more efficient US-Mexico border: How reducing wait times at land ports of entry would promote commerce, resilience, and job creation

Economy & Business Latin America

Report Feb 17, 2023

The transformative power of reduced wait times at the US-Mexico border: Economic benefits for border states

Economy & Business Inclusive Growth

Made possible by

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Aviso LatAm: February 18, 2023

elardizabal — Sat, 18 Feb 2023 13:27:31 +0000

What you should know

Nicaragua: On February 9, the Ortega-Murillo regime released and expelled 222 political leaders, priests, students, and other dissidents to the United States.
US-Brazil relations: Presidents Biden and Lula da Silva met on February 10, during which they underscored the importance of strengthening democracy, promoting respect for human rights, and addressing the climate crisis.
Ecuador: Ecuadorians rejected all eight items on a constitutional referendum backed by President Lasso, signaling anti-incumbent sentiments and the clout of pro-Correísmo opposition political forces.

Monitoring economic headwinds and tailwinds in the region

Argentina: Annual inflation reached 98.8 percent, while activities in the construction and manufacturing sectors continued to decline.
Brazil: The government met with Mexico, Germany, Colombia, Chile, the World Bank, and the Inter-American Development Bank (IDB) to explore issuing green bonds this year.
Belize: The government launched two new projects in cooperation with Taiwan, a business support program focused on women and micro, small, medium-sized enterprises (MSMEs), and a flood warning system for disaster prevention.
Colombia: 2022 GDP growth is estimated to be 7.9 percent, down from 2021’s 10.8 percent growth. In 2023, growth is expected to further decline to 1.05 percent.
Peru: Continuing protests and supply shortages have led several mines to suspend or reduce operations, threatening copper production.
Suriname: President Santokhi expressed willingness to collaborate with neighboring Guyana on oil and gas exploration and development to position the Caribbean as an energy hub.

In focus: Inflation and infighting

As regional inflation continues, political pressures are leading to criticism of central bank policy in Brazil and Colombia. Recently-elected presidents Lula and Petro have both questioned rate hikes as a method to tackle inflation, suggesting more flexible targets and alternative policies. The governor of Colombia’s Central Bank, Leonardo Villar, expects the region to require continuing tight monetary policy, which critics argue may complicate other policy goals such as growth. Roberto Campos Neto, president of the Central Bank of Brazil, has expressed his willingness to coordinate with the Lula administration to achieve growth and control inflation.

Despite the public clashes, central bank policy in both countries remains independent. In Brazil, a 2021 law protects central bank autonomy and is unlikely to be repealed. In Colombia, the central bank has maintained a course independent of presidential advice for two decades.

Health + Innovation

Colombia: President Petro presented a health reform to Congress that seeks to improve primary care, expand access to treatment, raise healthcare worker salaries, and fight corruption by eliminating private sector management of payments.
Brazil: Nearly three years since COVID-19 claimed the life of its first victim, the country has for the first time registered zero pandemic-related deaths in a day on February 12.
Jamaica: The Bureau of Standards launched the Jamaican Standard Specification for Telemedicine, which provides the framework through which telemedicine may be safely practiced while upholding the integrity of the medical profession.

Geopolitics of vaccine donations: US vs. China

The United States outpaces China in its donations of COVID-19 vaccines to Latin America and the Caribbean, with Colombia and Mexico topping the list. The region has received roughly 52 percent of all US COVID-19 vaccine donations. To learn more, visit our COVID-19 vaccine tracker: Latin America and the Caribbean.

The post Aviso LatAm: February 18, 2023 appeared first on Atlantic Council.

The transformative power of reduced wait times at the US-Mexico border: Economic benefits for border states

Fri, 17 Feb 2023 14:00:00 +0000

The second of a two-part series on the US-Mexico border

A joint report by the Atlantic Council’s Adrienne Arsht Latin America Center, the University of Texas at El Paso’s Hunt Institute for Global Competitiveness, and El Colegio de la Frontera Norte.

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Executive summary

The announcements and commitments made at the North American Leaders Summit in January 2023 reiterated the importance of North American competitiveness, inclusive growth and prosperity, and the fight against drugs and arms trafficking.¹ To achieve the goals and deliverables established during the summit, it is critical that the US-Mexico border be managed and perceived as an essential contributor to national, binational, and regional security and economic development.

A more efficient US-Mexico border has the potential to reduce border crossing times for commercial and noncommercial vehicles, generating positive externalities for the United States and Mexico including enhanced security and economic growth.² This report – the second in a two-part series – outlines the economic impact of reduced wait times at the border, focusing on the costs and benefits for border states in both countries.³

This report shows that a mere 10-minute reduction in wait times – without any additional action – can create thousands of Mexican jobs, grow the gross domestic product (GDP) of several Mexican states, and generate hundreds of thousands of dollars in new spending in the United States. Ten minutes is then hopefully the starting point for even shorter wait times and even greater economic gains and job creation.

More precisely, increasing border efficiency by 10 minutes can result in more than 3,000 additional jobs across Mexico’s six border states while increasing their combined GDP by 1.34 percent.⁴ Additionally, this reduction would allow for an additional $25.9 million worth of goods to enter the United States every month and lead to $547,000 in extra spending across the United States’ four border states.⁵ A forthcoming standalone short report will evaluate the final destination of traded goods and the economic benefits for states beyond the border.

In terms of Mexico’s border states, Tamaulipas would see the greatest growth in GDP (1.9 percent), followed by Baja California (1.6 percent) and Chihuahua (1.5 percent). Overall, this would generate a $2.2 billion increase in GDP and a $167 million increase in intermediate demand and a $3.2 million increase in labor income across Mexico’s six border states.

A 10-minute reduction in wait times would also lead to an average of 388 new loaded containers entering the United States from Mexico monthly. This translates to $25.9 million worth of cargo crossing through the United States’ four border states (Arizona, California, New Mexico, and Texas), a figure identified in the part-one of this study.⁶ New research shows that approximately 222 (57.2 percent) of these containers would enter via Texas ports of entry, carrying $17 million in cargo every month.

Separately, the 10-minute reduction in wait times would lead to 5,020 additional noncommercial monthly crossings, resulting in $547,000 in extra monthly spending by families and individuals traveling from Mexico to the four US-border states every month. The model estimates that these individuals would spend an additional $256,000 in California alone, representing nearly 50 percent of the total increase in spending. The clothing retail industry would experience the greatest gains across the board, with $132,000 in additional annual revenue from streamlined noncommercial crossings.

Results were informed by engaging local and regional stakeholders in roundtables, focus groups, and one-on-one interviews to identify areas for practical improvement in border management. These include investing in technologies, infrastructure, management, staffing, and supply chains. For instance, deploying high-tech screening technologies further away from ports of entry would facilitate a greater and faster flow of cargo and passenger information. Similarly, a collaboration between the United States and Mexico to develop joint, decentralized tools for border management and processing could ensure a more efficient flow of legitimate cross-border traffic while detecting illegal activity. Improvements in infrastructure and an increase in personnel staffing ports of entry would prevent bottlenecks and decongest queues that regularly spill over onto interstate highways and local roads.

While this report outlines the potential economic impact of a more efficient US-Mexico border for the border region, it also identifies new spaces for growth and new questions to be asked, studied, and addressed. For example, a lack of data in non-border Mexican states makes it difficult to estimate what the impact of enhanced efficiency in non-border inspection points would be for overall binational commerce and within each individual state. Similarly, limited US data exists to determine the final beneficiaries of new economic activity. New, reliable data is essential to understand the greater implications of streamlined border processes and tools in the United States and Mexico.

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Issue Brief Dec 15, 2022

Road to the tenth North American Leaders’ Summit: Spotlight on competitiveness and supply chains

By María Fernanda Bozmoski, Jacob Kaufhold, and Isabel Chiriboga

North American competitiveness and supply chains are at an inflection point. The three leaders must take the momentum of the last meeting and continue to advance key priorities. In an increasingly complicated global context, close collaboration and partnership on all fronts is key.

Report Sep 27, 2022

The economic impact of a more efficient US-Mexico border: How reducing wait times at land ports of entry would promote commerce, resilience, and job creation

Economy & Business Latin America

1 The North American Leaders Summit (NALS) is a trilateral meeting attended by the heads of state of the United States, Mexico, and Canada. The 2023 NALS took place in Mexico City on January 9 and 10.

2 These externalities were explored in part one of this two-part series: Alejandro Brugués Rodríguez et al., The economic impact of a more efficient US-Mexico border: How reducing wait times at land ports of entry would promote commerce, resilience, and job creation, Atlantic Council’s Adrienne Arsht Latin America Center, the University of Texas at El Paso’s Hunt Institute for Global Competitiveness, and El Colegio de la Frontera Norte, September 27, 2022, https://www.atlanticcouncil.org/in-depth-research-reports/report/the-economic-impact-of-a-more-efficient-us-mexico-border/.

3 A 10-minute reduction in wait times is used as the baseline for analysis in this report because it is an easily achievable reduction that could be accomplished with slight changes to management practices and tools on both sides of the border. Given that the results of this study are mostly linear, the reduction in wait times could be expanded to an hour or more. However, the 10-minute reduction was chosen to keep the results of the study reliable, as it is the greatest time reduction to estimate economic impact with minimal room for error.

4 Mexico’s six border states are Baja California, Chihuahua, Coahuila, Nuevo León, Sonora, and Tamaulipas.

5 The United States’ four border states are Arizona, California, New Mexico, and Texas.

6 Alejandro Brugués Rodríguez et al., The economic impact of a more efficient US-Mexico border: How reducing wait times at land ports of entry would promote commerce, resilience, and job creation, Atlantic Council’s Adrienne Arsht Latin America Center, the University of Texas at El Paso’s Hunt Institute for Global Competitiveness, and El Colegio de la Frontera Norte, September 27, 2022, https://www.atlanticcouncil.org/in-depth-research-reports/report/the-economic-impact-of-a-more-efficient-us-mexico-border/.

The post The transformative power of reduced wait times at the US-Mexico border: Economic benefits for border states appeared first on Atlantic Council.

Guevara in El Heraldo de Mexico on securing the airspace of Mexico

Inigo Guevara Moyano — Tue, 14 Feb 2023 18:35:00 +0000

On February 14, Transatlantic Security Initiative Nonresident Senior Fellow Inigo Guevara authored an op-ed in El Heraldo de Mexico discussing the importance of securing the airspace of Mexico.

Fellow

Inigo Guevara Moyano

Scowcroft Center for Strategy and Security Transatlantic Security Initiative

Americas Arms Control

The post Guevara in El Heraldo de Mexico on securing the airspace of Mexico appeared first on Atlantic Council.

Goldwyn in The Hill: How to address vulnerability at our ‘third border’

mzandi — Tue, 07 Feb 2023 20:02:13 +0000

The post Goldwyn in The Hill: How to address vulnerability at our ‘third border’ appeared first on Atlantic Council.

Aviso LatAm: February 6, 2023

elardizabal — Mon, 06 Feb 2023 14:28:37 +0000

What you should know

PAHO: Dr. Jarbas Barbosa took office on February 1 as the health organization’s new director, pledging to work in partnership with member states to end the pandemic and ensure that the region’s health systems recover stronger than before.
IMF: The organization raised its global growth forecast to 2.9 percent, up from its original 2.7 percent. The outlook is also better for the region’s two major economies: up 0.2 percent for Brazil, to 1.2 percent, and a half point for Mexico, to 1.7 percent.
Migration: The 250,000 migrants that irregularly crossed into Panama through the Darien Gap in 2022 represents a record high that is nearly double the 133,000 entries recorded in 2021.

Monitoring economic headwinds and tailwinds in the region

Mexico: The national statistics agency reported that the economy grew 0.4 percent in Q4 of 2022 compared to the previous quarter.
Argentina: The government will leverage new gas exports to Chile, and potentially Brazil, to improve its trade balance and pay down debt.
Brazil: Alongside Argentina, the government is floating the development of a common currency linking the two countries to facilitate trade.
Colombia: The Minister of Mines and Energy Irene Velez announced at Davos that the country will no longer approve new oil and gas exploration contracts.
Jamaica: Third-quarter GDP grew by 5.9 percent over 2022 due to a resurgent tourism sector, which has boosted hotels, restaurants, and services, among other sectors.
Peru: Ongoing protests and road blockades have cost the country $550 million since the ousting of President Pedro Castillo last December.
Transatlantic ties: German Chancellor Olaf Scholz visited Argentina, Brazil, and Chile, to discuss the EU-Mercosur trade agreement and support for Ukraine.

In focus: Energy expansion in Trinidad and Tobago

On January 24, the United States licensed Trinidad and Tobago to develop a natural gas project off the coast of Venezuela in the Dragon field region. The project will support overall Caribbean energy security, with a requirement that some of the produced gas must be exported to Jamaica and the Dominican Republic. To comply with US sanctions, Trinidad will pay for the gas with humanitarian aid.

Atlantic Council experts reacted immediately, emphasizing the importance of this move towards meeting Caribbean energy demand. You can read more here.

Health + Innovation

Haiti: As of January 17, the Ministry of Public Health and Population has reported over 24,400 suspected cholera cases.
Education: A World Bank study shows that by 2045, nearly 5 million people across LAC would fall into poverty due to pandemic-induced learning losses.
Brazil: The Health Ministry announced that it will roll out bivalent COVID-19 booster shots as early as February 27.

Geopolitics of vaccine donations: US vs. China

The United States outpaces China in its donations of COVID-19 vaccines to Latin America and the Caribbean, with Colombia and Mexico topping the list. The region has received roughly 52 percent of all US COVID-19 vaccine donations. To learn more, visit our COVID-19 vaccine tracker: Latin America and the Caribbean.

The post Aviso LatAm: February 6, 2023 appeared first on Atlantic Council.

Guevara in Heraldo de Mexico on sending Soviet-era weapons from Mexico to Ukraine (in Spanish)

ktalley — Tue, 31 Jan 2023 21:34:07 +0000

Fellow

Inigo Guevara Moyano

Scowcroft Center for Strategy and Security Transatlantic Security Initiative

Americas Arms Control

This article was originally published in Spanish by El Heraldo de Mexico.

Last week, Germany and the United States took the decision to authorize the export of Leopard 2 and M1 Abrams main battle tanks to Ukraine, thereby changing the profile of Western military assistance.

This is significant since both countries have very restrictive policies for the export of military equipment since they impose on their clients the condition of requiring their authorization to re-export the material. That is, Germany must approve the shipment of Polish or Canadian Leopard tanks to Ukraine, even after they have been sold to these countries. The reasons range from ethical to political, economic, and technological, as they seek to prevent their clients from reselling material, they consider to be a kind of intellectual property to third parties.

Countries that buy weapons from Germany and the US must accept these conditions and do so largely because of the quality of the equipment, the after-sales service, and the reliability of their supply chains. There will be those who have had isolated bad experiences, but the data is clear, the United States is the largest arms exporter in the world, it controls 40 percent of the market, while Germany is in the top 10, controlling 5 percent.

The German authorization came after weeks of deliberation and was tied to the US agreeing to deliver the M1 Abrams. The amounts do not seem significant (Germany will donate 14 and the United States 31) but pledges from many other countries have been added to this authorization, at such a rate that Ukraine expects to receive 321 good quality tanks in the coming months.

The quality of these tanks will give Ukraine a competitive advantage: the Leopard 2 is a 60-tonne beast, considered by many analysts to be the best tank in the world, while the M1 Abrams is so powerful that it uses jet fuel instead of diesel. This qualitative change will take months to take effect as Ukrainian troops must receive adequate training and there is a necessary industrialization process, so Ukraine needs to continue receiving military aid including Soviet or Russian-made equipment.

The head of the US Southern Command, General Laura Richardson, announced during an event hosted by the Atlantic Council last week that the US was encouraging countries in the region to donate or sell their Russian/Soviet-sourced military equipment to help Ukraine.

In Mexico, the Navy, Air Force and National Guard have some 40 Mi-17 helicopters, 30 BTR-60 amphibious armored vehicles, a couple of dozen Ural heavy trucks and Igla anti-aircraft missiles. They were all opportunity purchases between 1994 and 2011: the Berlin wall had just fallen, and ex-Soviet equipment was offered at very low prices in those years. Over the years they have proven their use, but many are out of service, and what is certain is that most of them will have to be decommissioned in a few years, as purchasing spare parts is going to be a nightmare in the international market.

The Mexican armed forces began processes to replace them with Western equipment several years ago, but these projects are frozen under this administration. The Mexican government has a great opportunity—both political and commercial—to get rid of the Russian equipment, offering it at market price, in exchange for credits to continue its modernization processes. In plain terms, transfer this equipment to the US in exchange for credit to buy new equipment. Otherwise, all that equipment will remain in disuse and convert to junk, instead of becoming an asset both for the finances of the people of Mexico, and for the defense of an outraged country.

The post Guevara in Heraldo de Mexico on sending Soviet-era weapons from Mexico to Ukraine (in Spanish) appeared first on Atlantic Council.

Aviso LatAm: January 21, 2023

elardizabal — Sat, 21 Jan 2023 15:40:27 +0000

What you should know

Brazil: The Supreme Court will investigate whether former President Jair Bolsonaro incited the January 8 attack on Congress and other government buildings in Brasilia.
Peru: People—mainly from remote Andean regions—descended on the nation’s capital to protest against President Dina Boluarte in support of her predecessor and demand elections and structural change in the country.
Trade: The value of goods exported from Latin America and the Caribbean (LAC) increased at an estimated rate of 18.8 percent in 2022, a downward trend from 27.8 percent in 2021, due to higher prices and low volumes.

Monitoring economic headwinds and tailwinds in the region

Argentina: The government will buy back overseas bonds equivalent to over $1 billion to improve its debt profile, looking to send a positive signal to markets despite low reserves levels.
Brazil: Vice President Alckmin said that Lula’s administration wants to remove a key tax on manufacturing and importing, the IPI, as part of a broader tax reform package.
Guyana: The government announced $43.4 billion in funding for a new natural gas power plant, alongside distribution infrastructure improvements, to promote business and development.
Multilaterals: During his inauguration, new Inter-American Development Bank (IDB) president Ilan Goldfajn announced three key priorities for the bank: social issues, climate change, and sustainable infrastructure.
Mexico: The 2023 North American Leaders Summit concluded with new agreements to promote sustainability, strengthen supply chains, and respond to migration.
Peru: The national statistics institute (INEI) said the economy expanded 1.7 percent year-on-year in November, marking a slight slowdown from the rise of 2.0 percent in October.

In focus: LAC in Davos

Latin American and Caribbean public- and private-sector leaders gathered alongside their counterparts from across the world in Davos, Switzerland, for this year’s Global Economic Forum. Colombia’s finance minister Jose Antonio Ocampo used the opportunity to push for a stronger agreement on minimum taxes for multinational companies. Brazil’s finance minister, Fernando Haddad, and environmental minister, Marina Silva, discussed Brazil’s positive economic outlook, environmental stewardship, and desire for regional integration.

Spanish prime minister Pedro Sánchez also delivered a speech, in which he emphasized Spain’s role in building ties between Europe and Latin America, as Spain prepares to take over the Presidency of the Council of the European Union later this year.

Health + Innovation

Vaccines: The Canadian government will donate $33.4 million to the Pan American Health Organization (PAHO) to increase access to COVID-19 immunizations for populations across the region. This donation is in addition to a prior contribution of $40 million in 2021.
Belize: The country will celebrate 34 years of relations with Taiwan through the construction of a new general hospital in San Pedro.
Nutrition: A new United Nations report found that 22.5 percent—or 131.3 million people—of the region’s population cannot afford a healthy diet, citing a country’s income level, the incidence of poverty, and level of inequality as contributing factors.

Geopolitics of vaccine donations: US vs. China

The United States outpaces China in its donations of COVID-19 vaccines to Latin America and the Caribbean, with Colombia and Mexico topping the list. The region has received roughly 52 percent of all US COVID-19 vaccine donations. To learn more, visit our COVID-19 vaccine tracker: Latin America and the Caribbean.

The post Aviso LatAm: January 21, 2023 appeared first on Atlantic Council.

Aviso LatAm: January 7, 2022

elardizabal — Sat, 07 Jan 2023 15:47:39 +0000

What you should know

Brazil: On January 1, Luiz Inácio Lula da Silva was sworn in as president for a third term after defeating incumbent Jair Bolsonaro.
Outlook: According to the Economic Commission for Latin America and the Caribbean (ECLAC), economic growth will continue to slow in 2023 and reach 1.3 percent.
Venezuela: The opposition-led legislature dissolved the interim government led by Juan Guaidó. The vote signaled that members of the opposition had lost faith in Guaidó’s ability to oust Maduro. The United States will continue recognizing the 2015 National Assembly as the last remaining democratic institution in Venezuela.

Monitoring economic headwinds and tailwinds in the region

Brazil: In 2022, trade surplus reached a record high of $62.3 billion. Total exports also reached a 335 billion high, helped by a boost in prices in the agriculture and livestock sector.
Argentina: The IMF disbursed a tranche of $6 billion from its $44 billion program with Argentina, citing positive indicators including falling inflation, a better trade balance, and foreign reserves.
Colombia: Minimum wage will increase by 16 percent this year, to $242.7 per month. President Petro said the move would boost an economy slowed by inflation.
Dominican Republic: The S&P upgraded the country’s credit rating from “BB-“ to “BB,” highlighting its strong recovery from the pandemic and long-term growth potential.
El Salvador: The government will receive a $150 million loan from the CAF development bank, designed to strengthen its education system in the wake of the pandemic.
Peru: The government launched a $1.6 billion plan to increase welfare and investment in regions gripped by protests following the ouster of former president Pedro Castillo.

In focus: Nearshoring opportunities in the Americas

With the next North American Leaders Summit (NALS) set for this incoming week (January 9 and 10), nearshoring – the relocation of supply chains closer to the United States – is rising in importance.

Rising costs of and delays during shipping, coupled with the pandemic, have made businesses in the United States wary of relying on supply chains across the Pacific. As a result, some 400 companies explored reshoring to Mexico from Asia in 2022. Mexico’s manufacturing sector is now larger than it was before the pandemic, and Mexican exports to the United States have rapidly increased. Firms such as Walmart have already relocated some business to Mexico, while Tesla is planning a new factory in northern Mexico. NALS will pay particular attention to the electric vehicle production chain in North America.

Health + Innovation

Chile: In an effort to curb the spread of the BF.7 COVID-19 subvariant, travelers coming from China are now required to show a negative PCR test.
Haiti: Over 14,700 suspected cholera cases have been reported since December. Nine in every ten cases are from areas hit hard by food insecurity.
PAHO: Most countries in LAC invest less than the minimum 6 percent of GDP in health and allocate less than 30 percent of the health budget to the first level of care as recommended by the regional health organization.

Geopolitics of vaccine donations: US vs. China

The United States outpaces China in its donations of COVID-19 vaccines to Latin America and the Caribbean, with Colombia and Mexico topping the list. The region has received roughly 52 percent of all US COVID-19 vaccine donations. To learn more, visit our COVID-19 vaccine tracker: Latin America and the Caribbean.

The post Aviso LatAm: January 7, 2022 appeared first on Atlantic Council.

Biden just tightened US migration policy. Can he calm the surge at the border?

Atlantic Council experts — Thu, 05 Jan 2023 22:44:23 +0000

On Thursday, US President Joe Biden announced that the United States will more swiftly remove unauthorized immigrants, expanding a pandemic-era restriction known as Title 42. Meanwhile, Biden expanded the use of a special authority to allow in up to thirty thousand migrants per month from Cuba, Nicaragua, Haiti, and Venezuela, so long as they have a US sponsor. We asked our experts what’s behind the policy shifts from the White House and what happens next.

1. Why did Biden expand the parole program to Cuba, Nicaragua, and Haiti?

Putting in place the tools for a more orderly asylum process at the US-Mexico border is pivotal with the surge in encounters. Today’s announcement of an expansion of the Venezuela parole program to Cubans, Nicaraguans, and Haitians will hopefully help to dissuade asylum seekers from risking their lives to make the trek north.

In October and November 2022, more Cubans (sixty-five thousand) and Nicaraguans (fifty-five thousand) arrived at the southwest border than in fiscal years 2020 and 2021 combined. The twelve thousand Haitian arrivals in those two months amount to one fifth of their total fiscal 2022 arrivals.

But people won’t stop leaving while they have little hope for a better life in their own countries. That is the case in Cuba (where inflation is soaring and repression escalating), Daniel Ortega’s Nicaragua (where democratic freedoms no longer exist), Nicolás Maduro’s Venezuela (with its own soaring inflation and repression), and gang-controlled Haiti. So border policies must be accompanied by new US and partner country strategies to improve livelihoods in these migrants’ countries of origin. And the United States must hold those like Ortega accountable for his actions to weaponize migration by doing things such as lifting the visa requirement for Cubans in order to more easily facilitate passage to the United States.

But the border is about more than migration. It is a vital source of commerce that promotes the creation of US jobs. Our recent work shows that just a ten-minute reduction in border wait times could have a $5.4 million annual impact on the US economy and create nearly nineteen thousand jobs in Mexico. Greater commerce translates into greater security as well. Economic growth creates jobs, making it less desirable to leave home. It is absolutely achievable to have a border that is more secure and more efficiently promotes commerce. That should be the goal.

—Jason Marczak is the senior director of the Adrienne Arsht Latin America Center.

2. What impact will this have at the border?

Biden’s visit to the border ahead of the North American Leaders Summit next week is an important step toward the amelioration of a crisis that has long afflicted the US-Mexico border. Smart border policies that streamline crossing processes not only benefit issues around migration, but also help decongest communities that are regularly choked by vehicular and pedestrian traffic.

Initiatives such as the New Migration Enforcement Process for Venezuelans have already decreased the percentage of attempted migrant crossings by nearly 90 percent. The expansion of such programs to additional groups could have similar effects, thus alleviating burdens on the health care and sanitation industries, among others.

Additionally, as border agencies utilize their resources to confront surges in pedestrian traffic, wait times for vehicles exponentially increase. Subsequent carbon emissions deteriorate the air quality around ports of entry, directly affecting the health outcomes of local communities. Further, vehicles waiting in line for miles constrict local mobility, hindering residents’ ability to travel back and forth between school, work, hospitals, and more.

It is important to keep people at the center of border policy, and initiatives that aim to enhance secure and efficient crossings should be celebrated by not only the United States and Mexico but the region as a whole.

—Ignacia Ulloa Peters is an assistant director at the Adrienne Arsht Latin America Center.

3. Will Biden’s plan work?

The Biden administration’s announcement that it will surge resources to the southwest US border and speed up processing for asylum applicants is a most welcome response to the extraordinary surge of people from troubled countries such as Cuba, Nicaragua, and Venezuela. Nothing will satisfy some critics, but those who support security, economic prosperity, values, and the US history of welcoming refugees from troubled lands should see today’s announcement as good news.

One absolute essential is the need for additional resources and personnel to make this plan work. The administration needs to send Congress an urgent supplemental budget request and to invoke some of the president’s extraordinary authorities to get additional personnel at the border to achieve the goal of making definitive, binding determinations of asylum eligibility in days, not weeks. The administration needs additional resources to (1) integrate legitimate asylees and their families to make important social and economic contributions to US society or (2) return ineligible people to a place of safety under existing laws. The administration and Congress now need to put forward the resources needed to satisfy US values, security, and prosperity. This would be historic, and it is achievable.

—Thomas Warrick is a nonresident senior fellow at the Scowcroft Center for Strategy and Security’s Forward Defense practice and a former deputy assistant secretary for counterterrorism policy at the US Department of Homeland Security.

4. What should happen next?

The American people have a right to expect secure borders. Crucial to this is a fair, orderly, and efficient process for those seeking to come and for determining who may stay. Unfortunately, the United States’ current system is utterly broken, and this is particularly true of the asylum system—weighed down by a 1.6 million-case backlog, with each case taking years to resolve. This has encouraged thousands with marginal claims to make dangerous journeys to the US border every month, expecting that the United States will not only let them in but also allow them to stay and work during the years it will take for their asylum claims to be resolved.

The measures announced today by Biden are the latest in a series of efforts aimed at gaining control over this untenable situation—establishing orderly processes for those with legitimate asylum claims; providing opportunity for those desiring to escape repressive or criminal regimes in Venezuela, Cuba, Nicaragua, or Haiti; and working with Mexico and other nations to strengthen enforcement against those choosing not to use these legal processes and, instead, trying to sneak in.

These are excellent steps, but band-aids. Congress needs to get involved—not only to provide the resources and legal fixes needed to expedite the resolution of asylum claims and better secure the border, but also to reform the immigration system more broadly, giving lawful status to those who have been here a while, expanding lawful channels for those wanting to come, and creating more efficient mechanisms for employers to hire the workers the US economy needs. Biden and Department of Homeland Security Secretary Alejandro Mayorkas deserve great credit for muddling through with the limited tools they have, but to truly get control of the border, Congress needs to put politics aside and fix the broken system.

—Seth Stodder is a nonresident senior fellow in the Scowcroft Center’s Forward Defense practice and a former assistant US secretary of homeland security for borders, immigration, and trade policy.

The post Biden just tightened US migration policy. Can he calm the surge at the border? appeared first on Atlantic Council.

Guevara in El Heraldo de Mexico on Mexico’s defense priorities for 2023 (in Spanish)

Inigo Guevara Moyano — Tue, 03 Jan 2023 22:00:00 +0000

This article was originally published in Spanish by El Heraldo de Mexico.

On January 3, the Transatlantic Security Initiative’s Nonresident Senior Fellow Inigo Guevara authored an op-ed in El Heraldo de Mexico discussing Mexico’s defense priorities for the upcoming year.

Fellow

Inigo Guevara Moyano

Scowcroft Center for Strategy and Security Transatlantic Security Initiative

Americas Arms Control

The post Guevara in El Heraldo de Mexico on Mexico’s defense priorities for 2023 (in Spanish) appeared first on Atlantic Council.

What might be ahead for Latin America and the Caribbean in 2023? Take our ten-question poll and see how your answers stack up

Adrienne Arsht Latin America Center — Tue, 20 Dec 2022 17:43:26 +0000

2023 might very well define the trajectory for Latin America and the Caribbean (LAC) over the next decade.

While many countries are still on the rebound from the COVID-19 pandemic, new crises—and their effects—are emerging, and are expected to continue into the next year. From global inflation to a costly energy crisis, and from food insecurity to new political shifts, how can the region meet changing dynamics head-on? And how might risks turn into opportunities as we enter a highly consequential 2023?

Join the Adrienne Arsht Latin America Center as we look at some of the key questions that may shape the year ahead for Latin America and the Caribbean, then take our signature annual poll to see how your opinions shape up against our predictions.

How might new regional collaboration take shape across Latin America and the Caribbean with a wave of new leaders? What decision points might shape government policy? Will Bitcoin continue to see the light of day in El Salvador? Are the harmful economic effects of Russia’s war in Ukraine in the rearview mirror for the region, or is the worse yet to come? Will China’s new foreign policy ambition translate to closer relations with LAC?

Take our ten-question poll in less than five minutes!

Report Sep 27, 2022

The economic impact of a more efficient US-Mexico border: How reducing wait times at land ports of entry would promote commerce, resilience, and job creation

Economy & Business Latin America

Issue Brief Sep 20, 2022

PACC2030: Quick wins for a US-Caribbean partnership on climate and energy resilience

By Wazim Mowla, Riyad Insanally

PACC2030’s success is crucial for CARICOM countries and the United States, and it needs to deliver in the short term to generate confidence that the United States is committed to a sustainable partnership.

Caribbean Economy & Business

Experts react Nov 27, 2022

Experts react: As the US eases oil sanctions, is Venezuela coming in from the cold?

By Atlantic Council experts

With Chevron expanding operations and talks ongoing between the government and the opposition, what’s next for Venezuela? Our experts drill down on the details.

Economic Sanctions Economy & Business

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Aviso LatAm: December 17, 2022

jkaufhold — Sat, 17 Dec 2022 14:00:00 +0000

What you should know

Peru: President Castillo was ousted by lawmakers after he sought to dissolve Congress ahead of an impeachment vote.
Brazil: The Economy Ministry rejected assertions by President-elect Lula’s transition team that Bolsonaro’s outgoing administration was leaving government finances “bankrupt.”
Social outlook: A recent Economic Commission for Latin America and the Caribbean (ECLAC) report projects that by the end of 2022, LAC will have 201 million people living in poverty – an increase of 15 million compared to the pre-pandemic situation.
ICYMI: On December 7, the Atlantic Council launched a paper on improving tax policy in LAC. Read it here.

Monitoring economic headwinds and tailwinds in the region

Argentina: signed a new information-sharing agreement with the US designed to root out tax evasion. It could increase tax revenue for Argentina by $1 billion US.
Barbados: concluded new funding arrangements with the IMF, $113 million US to continue its fiscal reform package and $189 million US towards its climate change response.
Brazil: President-elect Lula announced that Fernando Haddad, former minister of education and mayor of São Paulo, would be his finance minister.
Mexico: announced that additional consultations on the USMCA energy dispute would be held through early January, to ensure continued investment and confidence.
Peru: was placed under a state of emergency after protests gripped the country. Political upheaval led S&P to lower the country’s economic outlook to “negative.”
Transatlantic relations: Argentina called for reviewing the potential EU-Mercosur trade agreement, highlighting threats to local auto industry and barriers to agricultural exports.
Uruguay: criticized Mercosur’s inaction on trade agreements with large economies, drawing criticism for its own independent negotiations with China and to join the TPP.

In focus: Guyana’s carbon credits

Guyana is the first country to issue carbon credits designed to prevent forest loss and the first under the ART’s REDD+ Environmental Excellence Standard to ensure integrity and independent verification. The Hess Corporation, which is a partner in an oil consortium led by ExxonMobil that operates in Guyana, will purchase $750 million US of these credits. This move reflects how resilient growth, balancing between the opportunities in the energy sector and protecting its valuable environment, has become a priority in light of climate change and stresses like the COVID-19 pandemic.

These credits will support Guyana’s Low Carbon Development Strategy, with 15 percent of the revenues set aside for indigenous communities. With some 18 million hectares of forest, Guyana is a major carbon sink, and has previously worked with Norway to protect this resource. The new credits reflect Guyana’s status as a “High Forest, Low Deforestation” country, another first.

Health + Innovation

Argentina: Transport Ministry officials recommended all passengers travelling on public transportation to return to wearing face-masks amid a spike in COVID-19 cases.
Universal Health Day: The Pan American Health Organization (PAHO) director called on the region to redouble efforts towards achieving universal health as they begin to rebuild from the pandemic.
Mexico: The state of Nuevo Leon reintroduced the mandatory use of face masks in closed public spaces as the number of COVID-19 infections and other respiratory diseases rise.

Geopolitics of vaccine donations: US vs. China

The United States outpaces China in its donations of COVID-19 vaccines to Latin America and the Caribbean, with Colombia and Mexico topping the list. The region has received roughly 52 percent of all US COVID-19 vaccine donations. To learn more, visit our COVID-19 vaccine tracker: Latin America and the Caribbean.

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Guevara in El Heraldo de Mexico on modernizing in the face of global geopolitical changes (in Spanish)

ktalley — Tue, 06 Dec 2022 20:02:00 +0000

Fellow

Inigo Guevara Moyano

Scowcroft Center for Strategy and Security Transatlantic Security Initiative

Americas Arms Control

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Aviso LatAm: December 3, 2022

elardizabal — Sat, 03 Dec 2022 08:19:00 +0000

What you should know

Economic outlook: The head of the UN Economic Commission on Latin America and the Caribbean (ECLAC) said that the region’s stagnation is ”worse than the 1980s” due to weak investment, low productivity, and inadequate education.
Mexico: Remittances sent from workers abroad surpassed $5.35 billion in October, beating economists’ forecast on US job strength.
#ProactiveLAC: On Wednesday, December 7, the Atlantic Council will host a virtual conversation on LAC’s economic outlook, fiscal policy, and small and medium-sized enterprises in uncertain times. Register here.

Monitoring economic headwinds and tailwinds in the region

Argentina: Upcoming legislation is set to encourage investment in its liquified natural gas sector, as demand, driven by the war in Ukraine, continues to grow.
Bolivia: The country lowered its 2023 growth forecast from 5.1 to 4.8 percent, as an ongoing strike in Santa Cruz has led to over $780 million in losses.
Chile: During the recent high-level dialogue with the United States covering migration and sustainable development, both parties agreed to relaunch their bilateral Science, Technology, and Innovation Council.
Dominican Republic: The United States will block sugar imports from Central Romana, the Caribbean nation’s largest employer, accusing it of using forced labor.
Ecuador: The government is considering a new financing deal with the International Monetary Fund (IMF) for 2023, as its current agreement is set to expire at the end of 2022.
Guyana: According to new ECLAC data, the country recorded the highest FDI growth in the Caribbean in 2021, and now accounts for half of all Caribbean FDI, thanks to its booming hydrocarbon sector.
Peru: Farmers and truckers set up roadblocks to protest rising gas and fertilizer prices, driven up by the war in Ukraine.
FDI: In a 2022 ECLAC report, Foreign Direct Investment (FDI) in Latin America and the Caribbean (LAC) rose by 40.7 percent in 2021 but fell short to achieve pre-pandemic levels.

In focus: Venezuelan thaw

Last weekend, the United States granted Chevron a six-month license to expand operations in Venezuela after the Maduro government agreed to resume talks in Mexico City with the country’s opposition. The two sides signed an agreement to use frozen Venezuelan assets for humanitarian relief as well.

The United States has framed this policy shift as a “targeted” response to promote “concrete steps” forward by the parties meeting in Mexico City. At the same time, the energy crisis driven by Russia’s war in Ukraine has elevated Maduro’s–-and Venezuela’s –-importance in a time of rising oil demand.

Health + Innovation

ICYMI: On November 16, the Atlantic Council launched a report with actionable recommendations for improving immunization program outcomes and financing in the region. Read it here.
Uruguay: Health authorities issued a recommendation that immunocompromised patients and over 50 year-olds should take their fifth dose of the COVID-19 vaccine.
Food insecurity: An ECLAC report found that 56.5 million people in LAC are impacted by hunger.

Geopolitics of vaccine donations: US vs. China

The United States outpaces China in its donations of COVID-19 vaccines to Latin America and the Caribbean, with Colombia and Mexico topping the list. The region has received roughly 52 percent of all US COVID-19 vaccine donations. To learn more, visit our COVID-19 vaccine tracker: Latin America and the Caribbean.

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Guevara in El Heraldo de México: on the effectiveness of state’s strategic capabilities (in Spanish)

ktalley — Tue, 25 Oct 2022 17:07:00 +0000

Fellow

Inigo Guevara Moyano

Scowcroft Center for Strategy and Security Transatlantic Security Initiative

Americas Arms Control

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The economic impact of a more efficient US-Mexico border: How reducing wait times at land ports of entry would promote commerce, resilience, and job creation

Tue, 27 Sep 2022 14:00:00 +0000

The first of a two-part series on the US-Mexico border

A joint report by the Atlantic Council’s Adrienne Arsht Latin America Center, the University of Texas at El Paso’s Hunt Institute for Global Competitiveness, and El Colegio de la Frontera Norte.

Executive summary

Improvements in border management and the adoption of new technologies at the US-Mexico border have the potential to enhance security and generate economic benefits for the United States and Mexico through expedited flows of goods and people. Reduced border wait times would lead to more traffic entering the United States from Mexico, both in terms of commercial trucks loaded with goods for US consumers and shoppers ready to buy US goods. This report quantifies the economic impact of this additional commerce and cross-border spending, which would lead to further economic prosperity in the two countries.

We know that long wait times at the border can hurt our businesses and economy, especially in my district. Ensuring our ports of entry have sufficient funding to reduce wait times is necessary to keep our economy on track and ensure businesses on both sides of the border succeed.”
The Hon. Juan Vargas
Representative (D-CA-51)
US House of Representatives

Research shows that a 10-minute reduction in wait times could lead to an additional $26 million worth of cargo entering the United States each month via commercial vehicles. This translates to more than $312 million in further commerce from Mexico into the United States annually. The extra inventory of finished and intermediate goods would drive down US domestic prices, creating increased economic well-being for US citizens.

This report also finds that reducing border wait times by 10 minutes has a positive annual impact of $5.4 million on the US economy due to purchases by additional families and individuals entering the United States from Mexico. While the immediate effect of these purchases is most evident in border communities, economic benefits would spread to the continental United States due to the economic linkages between local economies, with approximately 25 percent of the total impact reaching non-border states.

Strengthened US-Mexico collaboration at our border will unlock significant economic growth, promote supply chain resilience, and boost competitiveness, benefiting Mexican workers and families. These benefits will reverberate far beyond the border, reaching states throughout Mexico. Now is the time to invest in initiatives to create an even more efficient and secure shared border.”
H.E. Luz Maria de la Mora
Subsecretary of International Commerce, Secretariat of the Economy
United Mexican States

Beyond the $312 million in added commerce from Mexico into the United States, a 10-minute reduction in border wait times would promote the creation of nearly 18,700 direct and indirect jobs in Mexico, increase labor income per sector by an average of $17,474, and boost growth for various Mexican economic sectors, particularly manufacturing, wholesale trade, and mining.

More specifically, a one-minute reduction in border wait times would increase the average production (or output) per sector—for Mexico’s top ten sectors exporting to the United States—by 2 percent, adding an average of $41.5 million per sector to the Mexican economy. This reduction in border wait times would also lead to an average sectoral growth in intermediate sales and final demand of 2.4 percent and 1.7 percent, respectively.

Our border communities rely on efficient and effective infrastructure for work, trade, tourism and other economic exchanges across the US-Mexico border. As the North American region seeks to retain its competitive global advantage, it is more important than ever for these communities to have access to top-notch ports of entry, staffing and technology. With the proper tools for border management, our border cities will be enabled to prosper now and well into the future.”
The Hon. Tony Gonzales
Representative (R-TX-23)
US House of Representatives

These findings illustrate the economic benefits of prioritizing investments at the US-Mexico border to reduce commercial and noncommercial wait times. They are understood as the lower range of the potential national-level economic benefits of deepened US-Mexico collaboration to create a more efficient and secure border. A forthcoming second study will build on these findings, disaggregating the economic impact of reduced wait times for US and Mexican states and counties at the border and beyond.

Made possible by

Global Sanctions Dashboard

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Global Sanctions Dashboard: Sanctioning soars across the board

Charles Lichfield, Maia Nikoladze, and Castellum.AI — Thu, 08 Sep 2022 14:11:22 +0000

In this edition of the Global Sanctions Dashboard, we look at the recently expanded sanctions against Iran just as negotiations over a potential US return to the Iran nuclear deal reach their endgame. We also take a long-overdue trip south to assess the effectiveness of sanctions in tackling the illegal drug trade.

Russia remains an inescapable focus, though not entirely for predictable reasons. The busiest sanctioning entity this summer has been Russia itself. The country does, of course, remain the prime target of Western sanctions. For more on that, take a look at our brand-new Russia Sanctions Database, which tracks Western sanctions against Russian entities and individuals—and highlights where gaps still remain.

Iran: US designations continue as nuclear negotiations wind up

The United States and Iran are negotiating a deal that would lift harsh sanctions on Iran in exchange for a major rollback of Iran’s recent nuclear advances. The next few weeks will be critical. On September 14, US President Joe Biden’s Iran envoy will report to Congress on the progress of negotiations. Iran has made new demands that the US has rejected and it is by no means certain that an agreement will be reached before US midterm elections. While Iran’s nuclear activities are key, another important factor is the West’s desire to secure new sources of energy as Russia and Saudi Arabia have agreed to slow down oil production.

Opponents of the deal argue that, if sanctions are lifted, Tehran would have additional sources of income to spend on proxy groups in the Middle East and that restrictions on Iran’s stockpile of enriched uranium would expire in 2031. Another concern is that Iran, once freed from energy sanctions, could make oil swap deals with Russia and allow Moscow to circumvent energy sanctions. Specifically, Russia could gain a backdoor route to sell its oil by supplying crude to northern Iran via the Caspian Sea, while Iran would sell equivalent amounts of crude on Russia’s behalf in Iranian tankers. This would undermine Western energy sanctions against Russia by allowing Moscow to profit from oil revenues through Iran. The argument is far-fetched in our view. Technical difficulties aside, Iran would make more money by selling its own hydrocarbons than by serving as a transit point for Russia. Supporters of the deal have consistently argued that this is the best and only way to curb Iran’s rapidly accelerating nuclear weapons program.

In the meantime, until any deal is reached, the United States will keep sanctioning Iranian petrochemical companies and persons engaging in transactions with them. Most recently, the US Treasury Department designated companies used by Iran’s Persian Gulf Petrochemical Industry to facilitate sales of Iranian oil in East Asia. Treasury has also sanctioned international front companies and shipping companies facilitating oil transactions for Iranian companies. The United States re-applied broad sanctions on Iran when it left the Joint Comprehensive Plan of Action (JCPOA) in March 2018. The United States often designates new companies on the basis of new intelligence and US officials are likely to increase pressure if a deal remains elusive.

Sanctions certainly have damaged important sectors of Iran’s economy. The heavily sanctioned Iranian aircraft and cargo fleet is becoming more dilapidated day by day. More than 170 planes are grounded while more than 50 percent of passenger planes cannot fly because of a lack of engines and spare parts. The National Iranian Tanker Company, which owns the world’s largest fleet of super tankers, is also unable to modernize its vessels due to sanctions. The 2015 nuclear deal allowed some updates and repairs to take place, but these stopped in 2018.

Spotlight Russia: Number one imposer and target of sanctions this summer

Looking at the visual below, one thing should stand out: The country that imposed the highest number of sanctions this summer was Russia. Moscow maintains an autonomous sanctions regime and also complies with the United Nations Security Council’s sanctions. This summer, the Russian intelligence agency Rosfinmonitoring (RFM)—also known as the Federal Financial Monitoring Service and reports directly to the president of Russia—added 752 entities and individuals to its terrorists and extremists list.

One of the entities recently added to RFM’s sanctions list is the Adat People’s Movement, which was previously added to the Russian Ministry of Justice’s banned entities list based on the Supreme Court of Chechnya’s decision in 2022. The movement, which does some of its work on the active 1ADAT Telegram channel, stands for an end to the “occupation” of Chechnya. The court decision and consequent listing by the Ministry of Justice already meant that the Public Association Adat People’s Movement was slated for liquidation. Adding the Adat People’s Movement to the RFM’s list may appear to be unnecessary duplication, but the listing could be used in the future against individuals associated with the movement. The RFM designation could also apply to a grouping which avoids taking on any form of legal identity. Crucially, RFM designations do not require an official court decision, unlike new designations to the Ministry of Justice’s list of banned entities.

In addition to becoming the number one sanctioning country, Russia also remained the number one sanctioned country. The European Union’s (EU) seventh package of sanctions targeted Russia’s top lender, Sberbank, freezing its assets in the West and blocking transactions that are not food- and fertilizer-related.

On September 5, Russia cut gas exports to Europe by ceasing all deliveries through the Nord Stream 1 pipeline, citing the need for turbine repairs. Germany exposed itself to heavy criticism when it secured a sanctions exemption in June to send a turbine repaired in Canada back into Russia. At the time, Berlin argued that sending the power compressor turbine (which is needed for the pipeline to function) would call Russia’s bluff and make clear that deliveries were being curtailed for purely political reasons. This is ultimately what has happened only three days after the Group of Seven (G7) countries announced they would force a price cap on Russian oil exports.

Drug trafficking sanctions: Are they effective?

Turning to Latin America, Mexico and Colombia have a high number of sanctioned entities and individuals. The primary reason is their involvement in the illegal drug trade, covered by US Executive Order 14059, as well as Narcotics Trafficking and Foreign Narcotics Kingpin Sanctions Regulations.

This summer, the US Treasury designated Obed Christian Sepulveda Portillo, an individual acting on behalf of the Mexico-based Cartel de Jalisco Nueva Generacion (CJNG)—a violent organization responsible for trafficking fentanyl and other deadly drugs to the United States. Portillo was trafficking firearms from the United States to CJNG, enabling the cartel to protect drug trafficking routes and other illicit assets. Treasury has previously sanctioned CJNP and its network of businesses and individuals facilitating the illegal drug trade. As a result of sanctions, any property or interests owned by Portillo in the United States will be blocked and reported to Treasury, and Americans will be prohibited from facilitating transactions with him.

By restricting access to US financial institutions, sanctions against drug trafficking organizations and individuals disrupt their operations. However, it is unclear whether sanctions alone can deter potential traffickers. Treasury has been keen to highlight that its designations have helped dismantle cartels and apprehend leaders; but it also acknowledges that these outcomes were achieved in coordination with US and foreign law enforcement agencies. Taking on the cartels does cause collateral damage locally: Unemployment and drug-trafficking violence tend to increase as new groups compete for abandoned territory. Still, there are merits to deploying sanctions to tackle the illegal drug trade, and it is reassuring to see that policies are subject to internal scrutiny and frequent evaluation.

Russia is the main driver behind this year’s designation uptick

This year has been one of the most intense in the history of sanctions, driven by the West’s resolute and united response to Russia’s invasion of Ukraine. Still, given that the United States has the most expansive sanctions program, partners have been catching up. Switzerland increased its total number of sanctions by 66 percent from last year, followed by the United Kingdom’s 56 percent.

To learn about Western sanctions against Russia and to find out where gaps still remain, check out our brand-new Russia Sanctions Database.

On the radar

EU foreign policy chief Josep Borrell delivered a downbeat assessment of the prospects of reviving the JCPOA on September 5, noting that the US and Iranian positions were “diverging.” However, this divergence is mainly to do with nuclear safeguards, not with new sanctions designations by the United States.
Fears of a winter crisis in Europe have heightened speculation that EU sanctions against Russia may be lifted. Recently we have seen well-attended protests in Prague calling for sanctions to be lifted, frequent comments by France’s opposition parties disparaging “counterproductive” sanctions, and even some calls for the Nord Stream 2 pipeline from Russia to Germany to be opened. Some voices in Germany still assume the technical difficulties befalling Nord Stream 1 are real.
The EU member most strongly threatening to break from the bloc’s sanctions consensus is Hungary. Ahead of a routine European Council vote on sanctions renewal on September 15, Budapest threatened to wield its veto unless three Russian businessmen were removed from the asset freeze and travel ban list. It has since dropped this demand. Though frequent, Hungary’s demands for exemptions and amendments do not threaten the overall architecture of the EU sanctions regime.
We remain strongly of the view that the EU will maintain sanctions pressure on Russia. EU members are already pushing back against speculation that it would lighten the pressure, arguing that export controls take time to be properly effective. Through the G7, the EU has also signed on to the US price cap initiative despite skepticism in Brussels and Paris about its technical feasibility.

The Global Sanctions Dashboard provides a global overview of various sanctions regimes and lists. Each month you will find an update on the most recent listings and delistings and insights into the motivations behind them.

Explore Here

At the intersection of economics, finance, and foreign policy, the GeoEconomics Center is a translation hub with the goal of helping shape a better global economic future.

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Marczak quoted in the The Washington Post on AMLO’s visit to the White House

nsolorzano — Wed, 13 Jul 2022 01:21:00 +0000

Jason Marczak was quoted in The Washington Post on AMLO’s comment on Mexico’s cheaper gas during his visit in Washington DC.

“The Mexican leader’s comment about cheaper Mexican gas “was a clear attempt to show that division between Mexican energy policy and U.S. energy policy and what AMLO sees as the implications of each policy,” said Jason Marczak, a Latin America scholar at the Atlantic Council.”

More about our expert

Staff

Jason Marczak

Americas Caribbean

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Marczak quoted in the the Los Angeles Times on AMLO not attending the Summit of the Americas

nsolorzano — Tue, 12 Jul 2022 20:54:00 +0000

After AMLO’s visit to the White House, Jason Marczak was quoted in the Los Angeles Times, regarding AMLO’s decision to not attend the Summit of the Americas.

“AMLO not going to the Summit of the Americas was a big blow to the relationship” between Washington and Mexico City, said Jason Marczak, senior director of the Adrienne Arsht Latin America Center at the Atlantic Council. “This [meeting] is incredibly important to reassure both Mexicans and Americans of the strength of U.S.-Mexico ties.”

More about our expert

Staff

Jason Marczak

Americas Caribbean

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Bozmoski quoted in Bloomberg on temporary visas in the US

nsolorzano — Tue, 12 Jul 2022 16:35:00 +0000

María Fernanda Bozmoski was quoted in Bloomberg following AMLO’s visit to the White House commenting on AMLO’s and Biden’s discussion of immigration.

“It’s not viable in the current domestic context in the United States. We have mid-terms coming and even if this was an idea the US Congress would entertain, the numbers we’re talking about — 300,000 or half a million visas — is a drop in the bucket,” said Maria Fernanda Bozmoski, deputy director for programs at the Atlantic Council’s Latin America center.”

More about our expert

Staff

Jason Marczak

Americas Caribbean

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AMLO’s US visit can get the USMCA back on track

Jacob M. Kaufhold — Tue, 12 Jul 2022 15:04:36 +0000

The July 12 meeting between US President Joe Biden and Mexican President Andrés Manuel López Obrador (better known as AMLO) provides an opportunity for the US-Mexico-Canada Agreement (USMCA)—its progress, shortcomings, and future—to move to the top of the two countries’ shared agenda.

Following a tumultuous negotiation period, the USMCA has now been in force for two years, and its impact has been overshadowed by pressing economic issues: the COVID-19 pandemic, supply-chain problems, and inflation driven by the Russian invasion of Ukraine. Despite that, the USMCA is still important, having made critical modernizations to the North American Free Trade Agreement (NAFTA) by securing enforceable environmental commitments, strengthening workplace protections, committing Mexico to its labor reforms in recent years, and including provisions for confronting or working with “nonmarket economies” as a bloc. Critically, as the Western Hemisphere sees a boom of digital products and services, the USMCA also sets rules for trading in the digital economy, including a guarantee that data moves freely across borders.

Multiple levels of government will need to cooperate in order to harness the full economic potential of the USMCA. The rare bilateral meeting offers the perfect opportunity for Biden and López Obrador to chart the course forward together.

Two years on, the USMCA still provides guiding principles for the US-Mexico-Canada relationship. Last year’s North American Leaders’ Summit (NALS), while focusing primarily on challenges posed by the pandemic, resulted in commitments by the three countries to increase support for small- and medium-sized enterprises (SME), strengthen labor protections, and cooperate on environmental concerns, building on USMCA chapters 25, 23, and 24, respectively. The Americas Partnership for Economic Prosperity announced at last month’s Summit of the Americas echoes the USMCA’s commitments to protect biodiversity and the environment, improve labor standards, and create standards for the digital economy. It is important that the United States, Mexico, and Canada follow up on their USMCA commitments via concrete mechanisms, initiatives, and working groups. This upkeep is especially important considering that the parties are halfway to the first joint review session, where they will consider changes and updates to the agreement.

Challenges such as COVID-19 have made the quantitative impact of the USMCA hard to measure, and the reality is it’s too soon to understand precisely how it has benefited the North American economy. But what we do know is policymakers have taken new steps to enhance collaboration, particularly in the form of initiatives to strengthen supply chains. For example, Biden’s US Supply Chain Task Force is developing solutions for strained supply chains in collaboration with Mexico and Canada, among other trade partners. Furthermore, the USMCA’s Competitiveness Committee—which was suggested by Mexico during negotiations—is actively working to ensure that North American supply chains can withstand a future emergency and avoid the pitfalls and coordination failures of the COVID-19 pandemic. Beyond that, the US-Mexico Supply Chain Working Group, established at the US-Mexico High Level Economic Dialogue earlier this year, is currently exploring the semiconductor industry as a potential area for joint development.

Despite these successes, opportunities for the United States and Mexico remain untapped, threatening the potential for the countries to share growth. For example, the Competitiveness Committee has a broad mandate—beyond strengthening supply chains—to incentivize production in North America, encourage regional economic integration, harmonize regulation, improve transportation, and respond to new developments; the committee has met twice since the USMCA came into force, but it could do so more frequently to better explore its expansive remit. Other committees established by the agreement (for example, the Committee on SME Issues), offer a powerful avenue for the parties to work on shared goals at the ministerial level and maintain momentum between major summits like NALS. But these committees are currently underutilized, and the relationships between different committees are unclear. Those relationships need to be defined so that committees can cooperate with each other and fully realize their potential. Opportunities spelled out in deliverables from NALS have also been left untouched: Leadership has yet to update the North American Plan for Animal and Pandemic Influenza as promised or host a Trilateral Cyber Experts Meeting to discuss internet infrastructure and security.

Domestic politics are also threatening the potential for shared growth. As Mexico was preparing to pass a controversial energy reform this spring that seemed to have given preferential treatment to the government-run Federal Electricity Commission (CFE), US Trade Representative Katherine Tai raised objections; she also directed her office to review Mexico’s compliance with the USMCA, which includes provisions against favoring state-owned companies and for protecting the environment. While the energy-reform bill crumbled, Mexico’s 2021 law giving dispatch priority to electricity produced by the CFE has remained, as the courts recently failed to rule it unconstitutional. Tai is now reportedly considering formal consultations on the topic, which would be one of only a couple such disputes with Mexico. Mexico’s nationalization of its lithium industry in the wake of the constitutional change’s failure may also come to be considered a violation of USMCA. Such disagreement on key areas for North American cooperation—energy security, the climate crisis, and strategic mineral resources—undermines the United States and Mexico’s ability to strengthen ties and present a united front on global issues.

Looking to the future, though, the North American partners have clear, common goals thanks to the USCMA: strengthening supply chains, supporting SMEs, and equitable growth and recovery. Biden and López Obrador must use this meeting to frame the next five months of collaboration on these goals and to guide cabinet-level cooperation through to the next NALS and High-Level Economic Dialogue at the end of 2022. Together, the presidents can set the agenda for securing digitalization and environmental protection while clarifying which committees and ministers will take the lead on shared goals going forward.

The USCMA and other agreements already provide a strong framework. The two presidents must build upon it, starting now.

Jacob M. Kaufhold is a project assistant at the Atlantic Council’s Adrienne Arsht Latin America Center.

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Climate and energy at the US-Mexico bilateral summit

David L. Goldwyn, Neil Robert Brown, Andrea Clabough — Mon, 11 Jul 2022 15:33:42 +0000

In the months since President Joe Biden and Andrés Manuel López Obrador (AMLO) last met (and since we wrote on that meeting), energy has moved back to the top of the agenda. US partners around the world increasingly recognize the tremendous investment necessary to meet our critical needs for energy security, affordability, and sustainability, and the need for international cooperation to get there. But not Mexico. In those intervening months, Mexico has continued its inward pivot and pushed partnership with the US further away. AMLO’s recent refusal to attend the Summit of the Americas in Los Angeles, when other leftist political leaders in Latin America were not invited due to their human rights records, was the most public snub to date.

The fundamental tension lies in the AMLO Administration’s ongoing efforts to undo the 2013 Mexican Energy Reforms in all but name amid attempted re-nationalization of Mexico’s energy sector. These efforts have left his administration embroiled in legal disputes with both US and international private investors, a situation over which the Biden Administration has voiced its concerns for several months.

Energy is core to AMLO’s vision for Mexico and to his own ideology. He views successive “neoliberal” reforms of the energy sector that allowed for private investments and eventually competition as corrupt and fundamentally counter to state interests. His solution is reasserting the dominance of state-owned Petróleos Mexicanos (Pemex) and Comisión Federal de Electricidad (CFE). On one hand, that has led to billions of dollars in fiscal injections to those companies to shore up their struggling finances while doing nothing to improve their profitability and, on the other hand, systematically sidelining private players in areas in which they compete with the state champions. The casualties include all types of energy—wind, solar, natural gas, and refined US products—and the companies and consumers that rely on that energy. All of this means that Mexico is moving away from climate mitigation, and its own legally binding emissions reductions targets, as it spurns clean energy investment in favor of state-owned inefficient coal and fuel oil plants.

Mexico’s future economic prosperity is at risk. At a time when energy prices are at record highs, Mexico risks taking itself out of what could be a North American manufacturing renaissance. Mexico needs massive investment to provide its citizens and industry with reliable, affordably priced, and environmentally friendly energy. In principle, that creates room for state financial support for Pemex and CFE in a manner more aligned with AMLO’s world view (which he did win a popular mandate to pursue) alongside private companies that bring the capital, expertise, and technology that the state companies lack. In practice, however, AMLO’s attempts to favor Pemex and CFE have led to repeated blatant violations of Mexico’s obligations under the United States-Mexico-Canada Agreement (USMCA) and of Mexican law, efforts to carve out energy from USMCA, capture of once-independent regulatory agencies, and pressure on the judiciary.

For its part, the Biden Administration was initially reluctant to prioritize energy issues. The bilateral agenda is packed, and there are other real humanitarian crises of security and immigration with which to contend. Yet what happens in energy does not stay in energy. The Biden Administration’s strategy to help manage immigration through economic opportunity and climate action is undermined by weak rule of law in the Mexican energy sector. Meanwhile, the mounting detrimental impacts of Mexican energy policies on the US economy, energy security, climate, and credibility of USMCA enforcement has led to bipartisan Congressional backlash.

Crucially, Climate Envoy Kerry recognized that backsliding on energy investment was unraveling Mexico’s climate commitments—specifically crushing renewables despite the country’s staggering potential—and raised the issue directly with AMLO. Kerry’s long coattails recently facilitated an encouraging start to provide relief for around $30 billion in US investment, according to U.S. Embassy Mexico City figures, a tactical win-win for both governments. In addition, United States Trade Representative (USTR) Katherine Tai has helpfully signaled that diplomacy is not the only US option. She has made clear that some of the AMLO Administration’s actions in the energy sector violate USMCA and is reportedly pursuing formal consultations, which could lead to retaliatory sanctions.

Nonetheless, AMLO has dug in on his state-centered energy strategy, leaving disputes simmering with the United States on energy security, climate, and trade relations. But while friction is high, there is opportunity for the Biden and AMLO administrations to understand each other’s perspectives and legitimate concerns, and produce sustainable outcomes which might reset the bilateral relationship around energy.

As AMLO visits the White House this week, areas to watch are:

Steps to stop the bleeding on rule of law in the Mexican energy sector. Most important is whether President Biden clearly asserts US national interests and demands fair treatment of US companies, products, and services in a manner consistent with its treaty commitments to the US and that his Administration will enforce USMCA in that regard. In AMLO’s Mexico, energy decisions are made by the President, and failure to receive a clear message from his US counterpart is a green light for AMLO to keep on his current course.
Accelerating areas of agreement on energy security and climate. For example, Mexico and the US can partner to enable shipment of US LNG from its Pacific coast to provide much needed energy security for Japan and South Korea and more affordable gas to replace coal in emerging Asia, while also providing local supplies of cleaner-burning and affordable fuels in under-developed regions of Mexico. Additionally, Mexico’s methane leakage rate from its oil industry is amongst the highest in the world, which is both bad for the environment and a waste of much-needed fuel in Mexico. Mexico has joined the US-led Global Methane Pledge already. Reducing methane waste could be an invaluable win for North America and indeed the world.
Charting cooperation on secure energy and climate supply chains. Mexico should be a natural partner for the United States as it seeks to build the manufacturing supply chains necessary both to lead the generational economic opportunity of the energy transition and to secure access to critical materials and components. While that opportunity cannot be realized at scale until Mexico turns a page on its existing energy policy, steps can be taken now to lay the groundwork.

Much rides on the Biden-AMLO meeting, and the stakes could hardly be higher. The Biden and AMLO Administrations can chart a more proactive, collaborative course on energy policy which supports their shared goals. As climate change accelerates and a worsening energy supply crisis engulfs the world, it is more essential than ever for the US and Mexico to work constructively on these issues and overcome differences of opinion wherever possible.

David L. Goldwyn served as Special Envoy for International Energy under President Obama and Assistant Secretary of Energy for International Relations under President Clinton. He is chair of the Atlantic Council’s Energy Advisory Group.

Neil Brown served on the senior Republican staff of the Senate Foreign Relations Committee and is currently a nonresident senior fellow at the Atlantic Council Global Energy Center and managing director at the KKR Global Institute.

Andrea Clabough is an associate at Goldwyn Global Strategies, LLC and a nonresident senior fellow at the Atlantic Council Global Energy Center.

EnergySource

Meet the authors

Fellow

David L. Goldwyn

Adrienne Arsht Latin America Center Global Energy Center

Caribbean Climate Change & Climate Action

Fellow

Neil Robert Brown

Energy Markets & Governance Energy & Environment

Fellow

Andrea Clabough

Nonresident Fellow

Climate Change & Climate Action Energy & Environment

EnergySource Nov 16, 2021

Silence is assent: A path forward in US-Mexico energy and climate relations

By David L. Goldwyn, Neil Robert Brown

Mexico’s recent climate and energy measures will cause economic harm, set back emissions reduction efforts, and strain the country’s relationship with the US. The Biden administration must be clear that these nationalistic policies, which contravene the United States-Mexico-Canada Agreement, will not be tolerated.

Energy & Environment Energy Markets & Governance

EnergySource May 6, 2022

Colombia can lead the energy transition in Latin America

By Juan Gomez

Colombia’s geography gives it a chance to take a leadership role in Latin America’s energy transition. But to do so, Colombian leaders will first need to address indigenous concerns, remove barriers to investment, and fix long-standing mismanagement issues.

Colombia Energy & Environment

EnergySource Apr 28, 2022

The US should leverage 45Q for the graphite supply crunch

By William Tobin

The US is staring down a significant shortfall in the supply of graphite, a critical mineral to the energy transition. Synthetic graphite production using captured carbon could be the way forward, and the 45Q tax credit is the best tool policymakers have to stimulate it.

Energy & Environment Geopolitics & Energy Security

The post Climate and energy at the US-Mexico bilateral summit appeared first on Atlantic Council.

Preble on Net Assessment: Is Biden’s approach to Latin America a problem?

Atlantic Council — Thu, 23 Jun 2022 18:33:00 +0000

On June 23, Christopher Preble co-hosted a new iteration of the Net Assessment podcast in the War on the Rocks network about the Summit of the Americas.

By all accounts, the Summit was poorly organized, and attending leaders were unimpressed with the lack of consultation before the event and with the initiatives set forth by the US during the conference. Does the planning and execution of the Summit tell us anything about the Biden administration’s foreign policy more broadly? What should our policies towards Central and South American countries be? And are President Biden and his team unwilling to make hard choices in foreign policy because the decisions will be unpopular with important domestic constituencies?

More about our expert

Staff

Jason Marczak

Americas Caribbean

The post Preble on Net Assessment: Is Biden’s approach to Latin America a problem? appeared first on Atlantic Council.

Atlantic Council’s Adrienne Arsht Latin America Center partners with State Department for US-Mexico border study

Angela Chavez — Fri, 03 Jun 2022 12:00:00 +0000

New research will examine the impact of enhanced technology on the US-Mexico border in line with US goals to create more secure and efficient borders

Washington DC – June 3, 2022 – The Atlantic Council’s Adrienne Arsht Latin America Center today announced a new partnership with the State Department’s Bureau of International Narcotics and Law Enforcement Affairs (INL), the Hunt Institute for Global Competitiveness at the University of Texas at El Paso (UTEP), and Colegio de la Frontera Norte (COLEF) in Tijuana to enhance security and economic growth in the United States and Mexico. This year-long partnership will include an economic impact study of improved US-Mexico border management practices and tools, among other impact analyses about the security and environmental impacts of these technologies.

“As companies look at nearshoring and as global supply chains are being reconfigured to adjust to new commercial and geopolitical realities, the US-Mexico border is quickly becoming all the more critical for the economic competitiveness of both countries. With new technologies deployed, a more efficient, transformed border has the power to expedite legitimate trade and travel and reduce commercial bottlenecks while simultaneously improving border security. This new partnership will provide timely insights on steps that can be taken to improve the lives of millions along the border and beyond,” said Jason Marczak, Senior Director at the Atlantic Council’s Adrienne Arsht Latin America Center.

Mexico’s role as the United States’ largest trading partner, with over $661 billion in total trade between the countries in 2021, makes safe and efficient borders a shared priority for both nations. President Joseph R. Biden reinforced the importance of secure borders with increased detection and screening capabilities during his first State of the Union address. The high volume of movement of goods and people at the border, combined with current inefficiencies in border management practices, often leads to extensive wait times and the over-use of scarce management resources. The introduction of new technology-focused border management practices could positively impact the lives of millions of people in the United States and Mexico by creating safer and more efficient borders. This project will detail the economic, security, and environmental benefits that would stem from investing in a 21st century US-Mexico border.

“We are two nations with a shared future. If we want that future to be brighter, we need to modernize our border infrastructure, strengthen our cooperation on border security, and ensure the more efficient flow of goods, services, and lawful travelers,” said Ambassador Ken Salazar, United States Ambassador to Mexico.

In addition to the economic impact study, the Atlantic Council, the Hunt Institute, and COLEF will produce three short publications specifically focused on foresight, security, and the environment. The consortium will also host a series of consensus-building activities such as roundtables, consultations, and focus groups with stakeholders from the public, private, and civil society sectors in the United States and Mexico.

“As a research organization within UTEP, the Hunt Institute is intimately aware of both the economic possibilities of binational cooperation and the potential impediments to that cooperation posed by border security. Border management has direct economic impacts on national economies, not just within border communities. The Hunt Institute is excited to collaborate with the Atlantic Council and COLEF to generate widespread support for the economic benefits of enhanced screening procedures at the US-Mexico border,” said Mayra Maldonado, Executive Director of the Hunt Institute for Global Competitiveness at the University of Texas at El Paso.

The project will deliver new insights into the economic, security, and environmental impacts of enhancing detection and screening capabilities at the US-Mexico border to inform policy decisions that will determine the shared future of our countries for years to come.

“The commercial partnership between Mexico and the United States takes place within a very competitive economic regional framework. As we look to the future, the economic performance of both countries will be strengthened as more sectors participate in cross-border trade and as the benefits of US-Mexico commerce reach further into all parts of Mexico, in addition to northern border areas,” said Dr. Edgar David Gaytán Alfaro, Coordinator of the Master’s Program in Applied Economics and researcher in the Economic Studies Department at Colegio de la Frontera Norte.

Please email inquiries to achavez@atlanticcouncil.org

Online Event Thu, March 17, 2022 • 10:00 am ET

The post Atlantic Council’s Adrienne Arsht Latin America Center partners with State Department for US-Mexico border study appeared first on Atlantic Council.

AC Selects: Ukraine’s energy security and US-Mexico growth opportunities

rcasberg — Fri, 18 Mar 2022 19:30:00 +0000

Week of March 18, 2022

Last week, the Eurasia Center and Latin America Center hosted experts to discuss the consequences of Russia’s war on European energy security, the US-Mexico bilateral relationship, and strategies to sustain green and equitable economic growth across the Americas.

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I think the whole world realized the seriousness of this request (no-fly zone) because it will be a disaster not only for Ukraine but the whole continent if they attacked another nuclear power station.
Maxim Timchenko, Chief Executive Officer, DTEK

The consequences of Russia’s war on energy security

Russia’s war in Ukraine is throwing into question Europe’s entire energy policy, with countries scrambling to find replacements for Russian hydrocarbons.

Geopolitics & Energy Security Nuclear Energy Oil and Gas Russia

There is such great human suffering that’s going on and one person, one dictator can do what is being done… the unity of the world, the Western world is really important.
Ken Salazar, US Ambassador to Mexico

Online Event Thu, March 17, 2022 • 8:15 am ET

Ambassadors Salazar & Moctezuma on US-Mexico priorities: Migration, energy, security & beyond

Where do the United States and Mexico currently stand on consensus around top issues for the bilateral agenda? What are key advancements in priority issues, and what may be new opportunities for working together?

Americas Energy & Environment Latin America Mexico

The toughest challenges that cross borders from immigration, gender equity, and climate change in this pandemic, we have a better shot of addressing those if we don’t wait only for national governments to solve them.
Eric Garcetti, Mayor, Los Angeles, California

Public Event Thu, March 17, 2022 • 12:00 pm ET

Road to the Summit: A green and equitable future for the Americas

A conversation to generate strategies for green and equitable economic growth across the Americas.

Americas Climate Change & Climate Action Economy & Business Inclusive Growth

The Eurasia Center’s mission is to enhance transatlantic cooperation in promoting stability, democratic values and prosperity in Eurasia, from Eastern Europe and Turkey in the West to the Caucasus, Russia and Central Asia in the East.

Social media war: Meta establishes monitoring center, Patreon bans military fundraising, Russian accounts under new scrutiny

The post AC Selects: Ukraine’s energy security and US-Mexico growth opportunities appeared first on Atlantic Council.

Engagement Reframed #4: Securing America’s demographic and economic future

Mathew Burrows — Tue, 08 Mar 2022 18:38:32 +0000

What is the opportunity?

Throughout US history, many American entrepreneurial heroes have been immigrants or the children of immigrants—from Alexander Graham Bell and Andrew Carnegie, both born in Scotland, to Intel’s Andy Grove and Google’s Sergey Brin, originally from Hungary and Russia, respectively. Indian immigrants comprise only about 1 percent of the US population but 6 percent of Silicon Valley’s workforce, and, as the appointment of Twitter Chief Executive Officer Parag Agrawal exemplifies, they disproportionately dominate the top echelons of tech corporate leadership. With increasing competition from China and elsewhere, immigrants are even more critical today to the future of US technology excellence. According to the nonpartisan National Foundation for American Policy (NFAP), “Immigrants have started more than half of America’s startup companies valued at $1 billion or more and are key members of management or product development teams in more than 80 percent of these companies.”

The United States can maintain its competitive edge by revising its immigration laws. Ironically, there is no reliable way under current law for immigrants to start a business and remain in the country after founding a company. Successful immigrant entrepreneurs must be refugees who qualify for staying, or be sponsored by employers, or have family ties in the United States. A “startup” visa, for example, which would allow foreign nationals to start companies and create jobs, would be an important addition to the US immigration system. The long wait for employment-based green cards prevents many individuals in H-1B status from having the employment status that allows them to start a business.

The relatively low cap on the number of annual H-1B temporary visas—65,000 plus 20,000 for those with advanced degrees—can make it difficult for startup companies to hire new personnel in their fast-growing businesses or for international students to remain in the United States. Moreover, restrictions on H-1B immigration have caused multinational companies eager for talent to hire US-educated foreign scientists and technologists at their foreign affiliates when these individuals cannot attain H-1B visas for employment in the United States. In these situations, the other countries where the affiliates are located reap the benefit. Many of the companies facing the most difficulty in obtaining H-1B visas for their employees are concentrated in highly H-1B-dependent and R&D-intensive sectors operating offshore tech service sectors. In most cases, the affiliates to which the new hires are sent are in Canada, India, or China.

Without more skilled immigrants, US businesses run the risk of not being able to expand and remain competitive in the global economy.

Distinct from nonimmigrant foreign workers with H-1B visas, another important avenue for immigrants coming to the United States has been as international students. A quarter of the “unicorn” founders in the NFAP study originally enrolled in top US universities. Like foreign jobseekers requiring a work visa, international students have faced hurdles in the past few years. In 2018, the Trump administration reduced the duration of student visas from five years to one. Even more harmful was President Donald Trump’s anti-immigrant rhetoric, which many experts believe dampened international students’ interest in studying in the United States (while raising parental fears for their children’s safety). “After years of phenomenal expansion starting in the mid-2000s, enrollment growth [of international students at US universities] slowed to less than 1 percent by 2019-2020.” Arguably, the pandemic—which led to a halting of immigration for a time—took a bigger toll on the number of international students coming to the United States than Trump’s anti-immigrant policies. Some 2 million fewer working-age immigrants are living in the United States today than in 2019. Pandemic restrictions also caused “a staggering 15-percent decline in international students in the 2020-21 academic year.” Fortunately, enrollment partially rebounded in fall 2021 with a 4-percent increase over last year’s earlier level. If enacted by Congress, proposals to reduce the number of Chinese students coming to US shores could substantially affect US universities because the Chinese comprise the largest group of foreign students in the United States, approximately 30 percent.

Going forward, the economic damage to universities from lowered enrollment could be substantial. International students represented nearly 60 percent of all student population growth in 2000–2018. Today, with a declining youth population in the United States, the concurrent drop in the number of international students studying at US universities will be an extra burden on academic budgets. Many science, technology, engineering, and math (STEM) PhD programs depend on international students for their survival. A pre-pandemic study found that 70.3 percent of all full-time graduate students in electrical engineering; 63.2 percent in computer science; 60.4 percent in industrial engineering; and more than 50 percent in chemical, materials, and mechanical engineering, as well as in economics, were international students. If US immigration law is not overhauled to attract more international talent to study in the United States, university funding will not only decrease, but US innovation will stall as well. A World Bank report warned that any reduction in the number of “foreign graduate students” could significantly reduce US innovative activities; conversely, the report assessed that a 10-percent increase in the number of foreign graduate students would raise patent applications by 4.7 percent, university patent grants by 5.3 percent, and non-university patent grants by 6.7 percent. Although the United States remains a top destination for international students, other countries are increasingly competing for such students, particularly those in the STEM field. In trying to recover from the COVID-19 pandemic, Canada has opened additional pathways for enticing older graduates with work experience and others who are French-speakers to apply for permanent residency. Australia—another popular destination for Indians and others—offers permanent residency possibilities for postgraduates, although the process is considered more complex than in Canada. Germany, which has an active program for attracting and retaining highly skilled workers in areas experiencing shortages, is providing a fast track to permanent residency for both international graduates (after two years) and those recruited for their skills (four years). With such competition, US complacency could spell a slow decline in attracting the best and brightest.

Why now?

Trump cited the hardships suffered by American workers who lost their jobs because of the pandemic as justification for suspending new work visas. Today, unemployment is low, and companies are facing a new crisis in trying to fill vacancies: too few skilled workers for the number of jobs. Shortages exist at all levels: lower-skilled workers are in high demand in the agriculture, construction, hotel, restaurant, and hospitality sectors.

Even before the pandemic, tech-skilled workers were scarce. A New American Economy report found that “computer-related jobs . . . made up 69.6 percent of all foreign labor requests in FY 2020, a slight increase from FY 2019 despite the COVID-19 pandemic.” Despite lingering criticism that foreign workers threaten to take jobs away from Americans, “The unemployment rate for computer- and mathematics-related occupations was 2.3 percent. By 2020, that had only increased by 0.7 percentage points, to 3.0 percent. By March 2021, the unemployment rate for workers in these occupations was 1.9 percent, lower than it was before the pandemic.” Computer and highly skilled mathematics-based jobs have traditionally been filled in high proportions by immigrants on H1-B and other temporary worker visas. Business groups, such as the US Chamber of Commerce, assess that the need to increase immigration is urgent. Without more skilled immigrants, US businesses run the risk of not being able to expand and remain competitive in the global economy. Angering many traditional Republican supporters, US Chamber of Commerce CEO Suzanne Clark, has, in fact, called for “doubling the number of legal immigrants.”

Despite sharp partisan differences, public views of immigrants have shifted toward greater acceptance, according to a mid-2021 Pew Research Center survey. The share of people who see being Christian and being born in the United States as critical for being “truly American,” Pew found, “has significantly decreased between 2016 and November 2020.” Moreover, this has been the case regardless of a respondent’s party leaning, although less so for Republicans.

How to make it happen

Most every immigration reform has been controversial and has required a modicum of bipartisanship to secure passage. While the post-COVID recovery, tight labor market, and growing worries about competitiveness with China on technology make today a propitious moment for reform, the sharp partisan divide in Congress, as well as the upcoming midterm elections, make even limited legislative efforts parlous. The Biden administration still has some means to address the tech-worker shortage and the declining number of international students coming to the United States and could lay the groundwork for more substantial immigration reform over the long term.

Short-Term Expedients: The Biden administration downplayed H-1B visas in its original Citizenship Act in favor of increasing the number of green cards from 140,000 to 170,000, exempting STEM doctoral candidates. Biden hoped to make H-1B visas less attractive to employers, while promoting the chance of permanent residency, which has traditionally been more appealing to students and workers. The Citizenship Act, which included these changes, has stalled, prompting the administration to expand the types of degrees qualifying for STEM recognition and to allow STEM graduates to remain in the country for up to 36 months. University officials have commended the executive measure, which will help them re-attract the world’s STEM talent.

Under the House’s COMPETES Act, holders of doctorates in certain STEM fields would be exempt from numerical caps on green cards, regardless of whether they earned their degree in the United States or abroad. Whether those provisions will survive the reconciliation process is unclear: the bill’s Senate counterpart contains no analogous STEM immigration provisions and, to become law, at least 10 Republican senators would need to support it to avoid a filibuster.

The Biden administration should consider asking Congress to raise the cap on the number of H1-B visas. The base number of 65,000 was set more than 30 years ago, in 1990, and the additional 20,000 visas for advanced-degree-holders from US universities was added in 2006. Last year’s (FY 2021’s) H1-B lottery attracted more than 300,000 candidates, representing a 12-percent increase from FY 2020. Raising the cap is not unprecedented: it was raised to 115,000 in 1999–2000 and to 195,000 in 2001-2003. Encouraging more temporary visas can help keep the channel open for needed skilled immigrants in case the provisions favoring STEM PhD candidature for green cards in the COMPETES Act fail. Even if those provisions were enacted, more technically skilled workers would be required than those with PhDs. Expanded H-1B visas would provide such an avenue for a wider spectrum of highly skilled workers to come to the United States.

Needed Long-Term Solution: Close observers of the immigration debates on Capitol Hill believe that Democrats should invest more in building a consensus because there have been potential opportunities to forge common ground with Republicans. In March 2021, the House passed two bipartisan immigration bills to legalize the so-called DREAMers (individuals living in the United States illegally, but who first came to the United States as minors) as well as farmworkers. Nine Republicans joined Democrats to pass the Dream and Promise Act by a vote of 228-197. The Farm Workforce Modernization Act also passed, by a vote of 247-174, backed by 30 Republicans.

The need for immigration reform is more pressing than ever. During the past decade and a half, demographers, economists, and other experts have grown increasingly worried about the declining birth rate and accelerating aging in the United States. Many had believed that the United States, with its large number of immigrants—who typically have higher birth rates than native-born Americans—would not see its birth rate decline so precipitously. The United States’ birth rate is now more in line with the low birth rates found among US allies and partners in Europe and Asia. Meanwhile, since 2008 the birth rates for immigrant groups in the United States have also dropped. In 2020, according to the Centers for Disease Control (CDC), the general fertility rate in the United States was about 56 births per 1,000 women—the lowest rate on record and about half of what it was in the early 1960s. Moreover, the decline in birth rates is seen across all measured racial and ethnic groups. Births dropped by 4 percent among white, black, and Latina women; 9 percent for Asian women; 3 percent for Hawaiians and other Pacific Islanders; and 7 percent for Native American and Alaska native women.

Beginning in 2030, immigration is projected to overtake natural increase as the principal driver of US population growth, according to the US Census Bureau. In the absence of any immigration, the US population would stagnate, if not decline starting in 2030. With no population growth, the United States could experience permanently lowered economic growth; this is already occurring in rural counties, whose populations are shrinking. Not only is there a strong argument to allow an increased number of immigrants, but there is also a need to attract immigrants with special skills that could help the United States sustain its competitive edge. Conservative Republicans have been particularly vociferous in calling for skills-based immigration, which could help form the basis for a compromise on other issues that Democrats support—and Republicans largely oppose—such as providing a pathway for the United States’ 11 million undocumented immigrants to obtain citizenship.

The question is: how long does Washington want to wait to reform US immigration policies? The year 2030—when the US population could begin to decline—is only eight years away, and the last major reform of US immigration law was in 1990. Congress needs to better understand the demographic implications of inaction and consider the effects of a shrinking population on the United States’ ability to compete globally. With public attitudes becoming more accepting of immigrants, the Biden administration should begin educating the public on the demographic and economic future awaiting the United States if its immigration policies are not reformed soon.

Photo by Go Nakamura. Migrants seeking asylum in the US from India, walk to turn themselves in to the US border patrol after crossing the border from Mexico at Yuma, Arizona, US, January 23, 2022. REUTERS

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The New American Engagement Initiative’s Assumptions Testing series explores some of the foundational beliefs that guide US foreign policy. By questioning the conventional wisdom, and exposing these assumptions to close scrutiny, the series aims to open a new seam in the policy debate and generate a more lively, fruitful, and effective strategic dialogue – one that is capable of producing a sustainable, nonpartisan strategy for US global engagement.

Reality Check Series

The New American Engagement Initiative’s Reality Checks are short briefs dedicated to exploring a particular policy or set of policies, assessing their efficacy, and, where appropriate, proposing alternatives. Reality Checks are published regularly and tied to the news of the day or derive from NAEI’s Assumptions Testing series. All are succinct and straight-to-the-point. The briefs are designed for busy professionals anxious for pragmatic and timely policy options.

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The New American Engagement Initiative’s Engagement Reframed policy briefs reimagine and reframe the US approach to the world beyond traditional, narrow notions of US military dominance to fashion an achievable and sustainable form of US leadership in a world of many capable actors.

The post Engagement Reframed #4: Securing America’s demographic and economic future appeared first on Atlantic Council.

What to expect from Mexico’s energy reform bill

Angela Chavez — Thu, 03 Mar 2022 14:33:00 +0000

Mexico’s Congress is currently debating a proposed amendment to the constitution to allow the state to increase control over the country’s energy market. The bill would grant the state electricity company – Comisión Federal de Electricidad (CFE) – 54 percent of the power output market and control over the terms and conditions of private energy producing companies.

However, approval requires support from two-thirds of both the higher and lower legislative chambers. At the moment, the ruling party MORENA does not have supermajority in either. Supporters of the bill claim that it will end preferential treatment for private energy companies and projects funded by foreign private finance, while detractors claim it will hinder global clean energy efforts and increase energy costs.

Looking ahead, upticks in oil prices stemming from Putin’s invasion of Ukraine could alter the proposed timeline and viability of this energy reform bill.

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Russian Hybrid War Report: Russia retaliates against anti-war celebrities as social platforms crack down on Russian media

Digital Forensic Research Lab — Mon, 28 Feb 2022 16:54:38 +0000

As Russia expands its assault on Ukraine, the Atlantic Council’s Digital Forensic Research Lab (DFRLab) is keeping a close eye on Russia’s movements across the military, cyber, and information domains. With more than five years of experience monitoring the situation in Ukraine, as well as Russia’s use of propaganda and disinformation to undermine the United States, NATO, and the European Union, DFRLab’s global team presents the latest installment of the Russian Hybrid War Report.

TASS website apparently hacked to display casualty statistics

Pro-Kremlin disinformation aims to diminish trust in Ukrainian army’s capabilities

Retaliations spread against Russian celebrities who urged an end to the war

Belarus Cyber Partisans disrupt Belarus railway network

“War” isn’t mentioned on pro-Kremlin and Kremlin-owned media outlets

Pro-Kremlin newspaper publishes commentary comparing Ukraine to Gaza

Mexican YouTube channels claim the US will invade Mexico in response to the Russian invasion

Georgian PM says Ukraine failed to avoid war, Georgia not joining sanctions against Russia

Georgia’s breakaway region of Abkhazia recognized DNR and LNR

Meta announced the creation of a “Special Operations Center” to monitor Ukraine war content on Facebook and Instagram. This model was previously deployed during the Taliban’s takeover of Afghanistan in August 2021, as well as in select elections beginning in 2018. Meta further activated a one-click privacy tool that it developed after the fall of Afghanistan to shield Afghans from Taliban surveillance and reprisals. The tool renders all user data, including profile pictures, inaccessible to any account that has not been directly added by that user.

Patreon removed a fundraising campaign for Come Back Alive, a Ukrainian charity organization that collects donations for the Ukrainian military and which was founded in 2014. The fundraiser had gone viral on February 23 when Twitter users discovered that different donation tiers were tied to different pieces of military equipment (e.g. $4 for a bullet, $299 for a tank). While Come Back Alive claimed that the $250,000 raised since the invasion had disappeared, Patreon stated that the funds would be given to the charity. Patreon has a longstanding ban on the financing of violent activities, although this policy has been inconsistently enforced in the past.

Lastly, social-media companies are being pressured to remove Russian diplomatic and media accounts from their platforms. Following the initial bombardment by Russian forces, the official Twitter account of Ukraine (@Ukraine) appealed directly to Twitter users and Twitter policy staff to remove the @Russia handle. Russian media also reported that Facebook had imposed restrictions on the social media accounts of RIA Novosti, the state-owned media conglomerate whose properties include RT and Radio Sputnik. At the time of this reporting, however, the pages were still accessible.

—Emerson T. Brooking, Resident Senior Fellow, Washington, DC

—Ingrid Dickinson, Young Global Professional, Washington, DC

Additional reading: Silicon Valley Must Pull the Plug on the Kremlin (Tech Policy Press)

TASS website apparently hacked to display casualty statistics

On February 27, Twitter user @PutinIsAVirus noticed an article published by Russian state news service TASS that listed Russian losses and acknowledged Vladimir Putin’s “disappointment” in how the war was proceeding. The DFRLab confirmed that the page was displaying this information before it was removed from the article.

Rather surprised by this but TASS, Russian news agency , is REPORTING the following number of Russian losses, which are rather aligned with those reported by #Ukraine #Russia is experiencing brutal losses, never seen beforehttps://t.co/vlzX0URAlE pic.twitter.com/3noPaI5nF1
— Putin is a Virus (@PutinIsAVirus) February 27, 2022

@PutinIsAVirus presumed that someone at TASS had intentionally leaked the figures, but another user, @kamerknc, raised the possibility that TASS had been hacked, noting that the page had also briefly displayed pro-Ukrainian information on how readers could contact Ukraine’s hotline for Russians to learn about missing soldiers.

https://twitter.com/kamerknc/status/1498019480877809665

While there have been numerous instances of hackers shutting down websites in Ukraine and Russia, this incident would be one of the first examples of hackers successfully altering content on a state media website to demoralize audiences. Russia has largely avoided discussing its own casualties.

—Andy Carvin, DFRLab Managing Editor, Washington DC

Pro-Kremlin disinformation aims to diminish trust in Ukrainian army’s capabilities

Debunks published by Ukrainian fact-checkers reveal that pro-Kremlin media have pivoted from spreading disinformation that paints Ukraine as the aggressor to disinformation that implies the Ukrainian army is demoralized.

Since Russia’s full-scale military assault began on February 24, Ukrainian fact-checkers have seen an increase in stories that focus on the demoralization of Ukraine’s armed forces. One narrative claimed that servicemen with the 57th Separate Motorized Infantry Brigade gave up their arms and defected to the so-called Luhansk People’s Republic; a second said that Ukrainian forces were abandoning their positions en masse; and a third claimed that the Ukrainian army was not resisting Russia. All these stories were debunked by StopFake.org, the Ukrainian fact-checking collective.

Additionally, Kremlin-controlled television channel Russia-24 accused Ukraine of sharing disinformation about its victories. The Facebook page for Ukraine’s ground forces announced the capture of two Russian prisoners of war (POW), sharing a photo of the men, potentially in violation of the Geneva Convention. Russia-24 said this claim was false because snow was visible in the photo and “there is no snow in the streets.” In the image, the POWs are standing in a wooded area, where snow typically remains on the ground longer than in streets.

In addition, Russia-24 suggested that a report from Ukraine’s State Emergency Service about a fire in an apartment building in Chuguiiv, which killed a young boy, was false. Russia-24 claimed that “journalists contacted the mother and it turned out that everyone is safe and sound.” The story did not include any evidence of them contacting the mother.

Russia’s Ministry of Defense has only reported about its success in Ukraine and has not mentioned any casualties among its forces, while Ukraine’s Ministry of Defense claimed eight hundred Russian soldiers have been killed as of Friday, which cannot be verified.

—Nika Aleksejeva, DFRLab Lead Researcher, Riga, Latvia

Retaliations spread against Russian celebrities who urged an end to the war

Many Russian and foreign celebrities popular in Russia made public statements condemning Russia’s invasion of Ukraine, and some of them have already experienced consequences for their public condemnation of the Kremlin regime.

Ivan Urgant, host of the popular comedy show “Vecherny Urgant,” posted a black square on his Instagram channel with the phrase “Fear and pain. NO TO WAR.” The show, which aired on the Kremlin-controlled Pervijchannel, then disappeared from its programming. Channel spokesperson Larisa Krimova was evasive, later telling journalists, “The current program layout is connected with important social and political events. Ivan Urgant, of course, continues to work on the channel.”

Similarly, the TV channels TNT and Pyatnica!, both owned by Gazprom Media, a part of the state-owned gas enterprise Gazprom, ended their contracts with Armen Oganyan, a producer at Comedy Club Production, and Marina Grankina, producer at Ukrainian TeenSpirit, after both condemned the war in Ukraine. Meanwhile, ticket sales were suspended for a Minsk concert by Valery Milardze, a popular Russian singer who condemned the war on Instagram.

Other Russian anti-war celebrities such as actress Chulpan Hamatova were labeled as “politically illiterate” by Kremlin-controlled media outlet RIA FAN. Additionally, Russian pop singer Sergei Lazarev, actress Maria Mironova, and other Russian celebrities received online threats after making anti-war statements on social media.

—Nika Aleksejeva, DFRLab Lead Researcher, Riga, Latvia

Belarus Cyber Partisans disrupt Belarus railway network

On February 27, Belarus Cyber Partisans announced the “collapse” of Belarus Railway’s computer systems “to slow down the deployment of occupying troops and give Ukrainians more time to repel the attack.” This was their second attempt to disrupt the train network in recent weeks. Cyber Partisans also claimed that they had disrupted Belarus Railway websites. The DFRLab confirmed that the websites pass.rw.by, portal.rw.by, and rw.by were no longer functioning that evening.

Later, a Telegram channel named Belarus Railway Worker’s Community claimed that Belarus Railway operations were now in “manual mode” and that trains in Neman, Minsk, and Orsha were “paralyzed.” On Twitter, an anonymous user named @liksio reported from a train that ticket validation had been disrupted.

Screenshot or Twitter user @likisio having troubles validating a ticket purchased online. (Source: @likisio/archive)

The railway company announced on Telegram that ticket sales had been disrupted but made no comment about the status of other railway operations.

—Nika Aleksejeva, DFRLab Lead Researcher, Riga, Latvia

“War” isn’t mentioned on pro-Kremlin and Kremlin-owned media outlets

As the international community condemns Russia’s war in Ukraine, pro-Kremlin and Kremlin-owned media outlets are refusing to use the term “war,” instead referring to the situation in Ukraine as a “special military operation.”

The DFRLab analyzed the headlines of four major outlets known for pushing the Kremlin’s agenda: Sputnik Georgia, Zvezda, Ria Novosti, and RT. The findings revealed that the outlets commonly used variants of “special military operation” like “special operation” and “military operation” instead of “war” or “invasion,” the terms widely used by independent media to describe the situation in Ukraine. For example, the Russian-language edition of state-owned RT placed a banner on its website reading “special operation.”

Montage of Kremlin outlets avoiding usage of the word “war” in their headlines.

However, RT seems to have no issue using the term “war” when describing Ukraine’s actions. On February 22, two days before Russia’s invasion, RT’s English-language platform published an article titled “How Ukraine’s ‘Revolution of Dignity’ led to war, poverty and the rise of the far-right.” The article also uses the term “Nazi” twenty-three times while pushing the narrative of a “Nazi Ukraine”—one of the justifications used by Putin when announcing the invasion into Ukraine on February 24.

—Sopo Gelava, Research Associate, Tbilisi, Georgia

Pro-Kremlin newspaper publishes commentary comparing Ukraine to Gaza

Komsomolskaya Pravda, a Russian daily newspaper, published a commentary comparing the war in Ukraine with the recent conflicts in Gaza. A letter authored by a former Donetsk resident with Israeli citizenship claimed that Ukraine has been bombing the so-called Donetsk People’s Republic for eight years, not unlike how Israel has been targeted by rockets from Gaza. The author asked, “If Israel is allowed to respond to shelling from Gaza and capture the Golan Heights, then why is Russia not allowed to do the same?”

The letter then went on to claim that 100 percent of residents in Donetsk are Russians rather than Ukrainians, yet there was not a single Russian-language school there in 2014. “Why do we suddenly believe that there will be no war considering this situation?” the author concluded.

—Sopo Gelava, Research Associate, Tbilisi, Georgia

Mexican YouTube channels claim the US will invade Mexico in response to the Russian invasion

Videos posted in Spanish by Tu COSMOPOLIS, a Mexican channel that describes itself as a platform spreading “verified information,” and Campechaneando, a YouTuber close to Mexico’s President Andrés Manuel López Obrador (AMLO), amassed hundreds of thousands of views by misleadingly claiming that the United States will invade Mexico in the wake of Russia’s invasion of Ukraine.

Tu COSMOPOLIS and Campechaneando posted the videos on February 23 and February 24 respectively. Both videos distorted an interview with former US President Donald Trump and misleadingly claimed that he suggested that the United States will invade Mexico’s northern states in response to the Russian invasion of Ukraine. Campechaneando also suggested that US President Joe Biden will follow up on the false statement attributed to Trump. Tu COSMOPOLIS and Campechaneando videos garnered 458,000 and 385,000 views, respectively, as of Friday evening.

Although Trump mentioned Mexico three times, he did not suggest an invasion of the country. Instead, Trump proposed to increase the presence of security forces on the southern border—on US territory—to prevent “millions of people [who] are bum-rushing our country” from “127 countries,” not just Mexico.

In another video posted on February 22, Campechaneando also claimed that Russia’s Vladimir Putin told AMLO that the United States will defeat Mexico and invade the country. Campechaneando did not show Putin’s statement or quote him. However, Putin’s claims about the United States stealing Mexican territories first appeared in 2014, prior to AMLO becoming president, when Putin used the 1848 Guadalupe-Hidalgo agreement between the US and Mexico as an argument to defend the 2014 Russia-Ukraine armed conflict. The video garnered 450,000 views.

The DFRLab could not find a connection or coordination between the Tu COSMOPOLIS and Campechaneando channels.

—Daniel Suárez Pérez, Research Assistant in Latin America, Colombia

Georgian PM says Ukraine failed to avoid war, Georgia not joining sanctions against Russia

On February 25, Georgian Prime Minister Irakli Gharibashvili said that Ukraine failed to avoid war and that it would harm its territorial integrity and citizens. While commenting on Ukraine at a memorial for Georgians killed during the 1921 Soviet invasion of Georgia, Gharibashvili recalled the 2008 Russian-Georgian war and blamed the Georgian government that was in power at the time for “stupidly, foolishly… succumbing to provocation.”

Gharibashvili also announced that Georgia will not join international economic sanctions on Russia, claiming that to do so would damage “the country, the populace, and more.” In a response to opposition criticism for not calling a National Security Council meeting about Russia’s invasion of Ukraine, Gharibashvili commented that “there is no need.”

Kremlin media hailed Gharibashvili’s decision not to join sanctions against Russia. RT editor in chief Margarita Simonyan tweeted in Russian, “Ребята, Грузия выздоровела!” (“Guys, Georgia has recovered!”) Russian First anchor Artyom Sheynin considered Gharibashvili’s statement as support for “precise military operations to force to peace,” adding that Russian military operations “clean people’s minds historically,” referring to Russia’s war in Georgia in 2008.

Domestically, Gharibashvili is under fire for his remarks. Thousands of Georgian citizens went into the streets to condemn Gharibashvili and express support to Ukraine.

—Sopo Gelava, Research Associate, Tbilisi, Georgia

Georgia’s breakaway region of Abkhazia recognized DNR and LNR

On February 25, the president of Georgia’s breakaway region of Abkhazia signed decrees recognizing the Donetsk and Luhansk people’s republics. In a Russian-language statement published by Apsnypress, President Aslan Bzhania stressed that Abkhazia has experienced the same fate as Donetsk and Luhansk, insisting that “more than four million Russian-speaking citizens of Ukraine were effectively subject to genocide.” Bzhania’s statement went on to accuse Ukraine of aggression incited by the West, adding that “Georgia tried to destroy the Abkhaz people” thirty years ago.

Bzhania claimed that “militant nationalism” and radical political forces deprived Ukraine of the ability to negotiate, so instead Ukraine had resorted to the persecution of Russian speakers residing in the Donbas. He added that the West provided Ukraine with lethal weapons, thus helping Ukraine prepare for its “final annihilation” of Russian speakers. Bzhania assessed Russia’s recognition of Ukraine’s breakaway republics as “fair,” adding that a military operation is “absolutely justified.”

Bzhania also called on the government of Abkhazia to start preparation for establishing diplomatic relations between Abkhazia and the two Ukrainian breakaway republics.

—Sopo Gelava, Research Associate, Tbilisi, Georgia

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Spotlight: Latin America and the Caribbean – Ten questions for 2022

Adrienne Arsht Latin America Center — Tue, 04 Jan 2022 13:00:00 +0000

The year 2022 will be one of change across the Western Hemisphere. So, what might or might not be on the horizon?

The year 2022 will be one of change across the Western Hemisphere. From presidential elections in Brazil and Colombia to newly elected presidents taking office in Chile and Honduras, regional leaders will be looking at new ways to rebuild economies from the COVID-19 pandemic while balancing mounting social pressures. So, what might or might not be on the horizon in 2022?

How might key presidential elections shake out? Will regional economies recover to pre-pandemic growth rates? What might be the outcome of the US-hosted Summit of the Americas, and will Caribbean voices play a larger role than in previous gatherings? Will the region expand its ties with China?

Take our ten-question poll in less than five minutes!

Question #1: Caribbean – Will Vice President Kamala Harris make her first trip to the Caribbean in 2022?

Question #2: Central America – Will the United States have confirmed ambassadors in all three northern Central American countries (currently only Guatemala) by year-end 2022?

Question #3: Chile – Will the new Chilean constitution be approved when put to a referendum?

Question #4: China and Latin America – Considering Nicaragua’s newly established China ties, will the three other Central American countries that currently recognize Taiwan—Belize, Guatemala, and Honduras—also switch recognition to China?

Question #5: Colombia – Will Colombia’s presidential election go to a second round?

Question 6: Economy – Can the region recover pre-pandemic growth rates in 2022?

Question #7: Mexico – Will Mexico remain the United States’ top trading partner throughout the next year?

Question #8: Bitcoin – Following in El Salvador’s footsteps, will support for Bitcoin tender grow in the region?

Question #9: Venezuela – Will Nicolas Maduro return to the negotiating table in Mexico City?

Question #10: Brazil – Will President Jair Bolsonaro win another term this year?

Bonus Question: Will Latin America and the Caribbean be represented in the final of the World Cup?

Our answer to question #1: YES

In 2022, the Biden-Harris administration will look for big wins and opportunities to expand its leadership in the Americas. This is achievable in the Caribbean with a high-profile visit, which would optimally be accompanied by a major policy announcement from Vice President Harris. President Joe Biden was the last vice president to visit the region, where he focused his time discussing the Caribbean Energy Security Initiative.

The stage is set for a similar visit to occur with Vice President Harris. Economic recovery is slow, vaccine hesitancy is increasing, and other actors, such as China, are playing a more active role in the Caribbean. Regional leaders often note that US attention is inconsistent, and that few high-profile US officials travel to the Caribbean. A visit and subsequent policy announcement that aids the Caribbean in its time of need would build on recent conversations between the Vice President and Prime Minister of Trinidad and Tobago Keith Rowley (virtual) and Prime Minister of Barbados Mia Mottley (in person).

Our answer to question #2: NO

Given President Nayib Bukele’s recent personal attacks against President Biden and other US government officials, including Ambassador Jean Manes and current Charge d’Affaires Brendan O’Brien, it is unlikely that the United States will confirm all ambassadors to the Northern Triangle countries. President Bukele’s attacks were a response to the Biden administration’s decision to add Osiris Luna Meza, the chief of the Salvadoran penal system and vice minister of justice and public security, and Carlos Marroquin, chairman of the Social Fabric Reconstruction Unit, to the Specially Designated Citizens and Blocked Persons List. Both Salvadoran officials are accused of having a direct relationship with gangs, including MS-13. In Honduras, however, a new administration under President-elect Xiomara Castro provides a renewed sense of cooperation between the United States and the Central American country.

Our answer to question #3: YES

Once the constitutional draft is finalized by summer 2022, the Constitutional Convention will vote to approve or reject the new legal charter. If the body rejects the new constitution, Chile will keep its current one. However, if it is approved, the group will present the document to the newly elected head of state, who, in turn, will issue a call for a national referendum in which Chileans will vote to approve or reject the new constitution. Voting will be mandatory, and the new constitution will move forward only if an absolute majority is achieved.

While 78.3 percent of voters cast their ballot in favor of a new constitution in 2020, rising polarization and inefficiencies within the Constitutional Convention have left thousands of Chileans disenchanted with the reform process. However, the desire for fundamental changes remains high. If the new legal charter is approved by Chilean voters, it will be put into effect shortly after the vote through a formal ceremony. However, if Chile votes to reject, the 1980 Constitution written under Augusto Pinochet will remain in place. With just one opportunity to get the new constitution approved, the convention will attempt to generate a moderate bill that will stimulate consensus among the political left and right.

Our answer to question #4: NO

It is unlikely that all three of Taiwan’s Central American allies will switch recognition to China in 2022. But, considerations of international benefits, domestic political agency, or both may prompt a change in at least one of the countries. Internationally, US COVID-19 vaccine donations far outstripped those of China, sending a reassuring message to Taiwanese allies in the region.

But, Chinese vaccine diplomacy—including early, well-publicized vaccine sales and shipments—and broader medical, humanitarian, and economic assistance could still prove alluring for countries in need. Despite running with a pro-China message, Honduran President-elect Xiomara Castro recently declined to switch diplomatic recognition from Taiwan to China. Absent any external shocks, Belize, Guatemala, and Honduras will likely attempt to maintain the status quo for as long as possible, favoring Taiwan while leaving the door open for closer ties with China. This delicate balancing act has served to remind larger countries not to take their allegiances for granted and will continue to do so. But, it will be increasingly tested, as seen with Nicaragua, in the critical and uncertain year ahead.

Our answer to question #5: YES

There has yet to be an election in Colombia’s history in which a president is elected in the first round. Senator Gustavo Petro, who served as mayor of Bogotá (2012–2014), leads the left-wing political party Colombia Humana, and was the runner-up in the 2018 presidential election against incumbent President Ivan Duque. With nearly 42 percent of the vote, Petro has positioned himself as the candidate with the greatest support from Colombian voters.

However, Petro currently polls at 25.4 percent, which is not enough for an absolute majority that will grant him the presidency in the first round. Petro will most likely go to a second-round vote against a center-right or center-left candidate, potentially former Mayor of Bucaramanga Rodolfo Hernández or former Governor of Antioquia Sergio Fajardo. To date, Hernández polls at 11 percent and Fajardo at 7 percent. As recommended by the Atlantic Council’s US-Colombia Task Force, co-chaired by Senators Roy Blunt and Ben Cardin, strengthening the alliance between Colombia and the United States ahead of 2022 presidential elections is paramount to safeguard Colombia’s gains in terms of development, rule of law, and democracy. Regardless of election results, the United States should continue to position itself as Colombia’s strongest ally, advancing stability and prosperity at home and abroad.

Our answer to question #6: YES

Led by its five major economies, regional gross domestic product (GDP) is on track to return to pre-pandemic levels in 2022, though per-capita income will likely not recover until 2023. Key uncertainties may alter this outlook: the extent of success in vaccination and pandemic management, stimulus trade-off between continued support and fiscal discipline, labor markets (currently experiencing slower recovery than GDP), inflation, electoral outcomes, and external conditions including evolving investor appetite and commodity prices.

The region as a whole is not expected to return to pre-pandemic growth trajectories in the coming years, signaling permanent output losses due to COVID-19. In a divergent recovery, smaller and vulnerable states, such as those in the tourism-dependent Caribbean, are experiencing an even slower return to normal. Lastly, Latin America and the Caribbean (LAC) should set an ambitious agenda beyond “recovery”—given unimpressive pre-pandemic growth rates and patterns—and, rather, seek ways to accelerate development and build forward in a more inclusive, productive, and sustainable way.

Our answer to question #7: YES

It is likely that Mexico will remain the United States’ top trading partner throughout 2022. Mexico currently holds the top position—overtaking China in February 2021—with Canada in the second spot, lagging behind by $2.9 billion in total trade. COVID-19 significantly hindered US-Mexico trade—which largely relies on land trade via trucks and railcars—due to the pandemic-induced land-border closures to “non-essential” traffic. As of November 8, 2021, however, the United States reopened its borders to non-essential traffic and booming commerce is expected along the border. Moreover, US-Mexico trade topped $545 billion through October 2021 (the most recent data available), an increase of over 24 percent from one year earlier. Given the highly integrated nature of US-Mexico trade in the automotive and energy sectors, coupled with the efforts in border cities and ports to increase capacity and efficiency, trade is likely to continue to grow between the United States and Mexico.

Our answer to question #8: YES

Bitcoin presents an attractive option for countries in Latin America and the Caribbean, yet those countries will not replicate El Salvador’s approach. The government of El Salvador claimed that adopting Bitcoin would reduce financial exclusion and high remittance fees. These issues also affect the entire region. The World Bank predicted that remittances to Latin America and the Caribbean rose 21.6 percent in 2021, costing roughly $6.9 billion in remittance fees. According to the International Monetary Fund (IMF), financial inclusion in the region falls below global averages, and is exacerbated in the Caribbean due to the de-risking of correspondent banks. The worsening effects of climate change will also likely generate support for a decentralized virtual currency, as remittances typically increase following natural disasters, alongside decreased access to financial institutions.

Despite Bitcoin’s allure, its implementation in El Salvador has been marred by technological unreliability, weak financial regulations, and high price volatility. Politicians in Paraguay, Mexico, and Panama have already introduced legislation to regulate Bitcoin’s use as legal tender, and more will follow in 2022. As support for Bitcoin rises, so will debates on its social and environmental risks. Countries across the region will chart their own paths instead of following El Salvador’s playbook.

Our answer to question #9: YES

Although, the latest round of negotiations in Mexico has been suspended since October 2021, a combination of long-term incentives will likely propel Maduro to negotiate with the Venezuelan Unitary Platform—the umbrella organization encompassing the main political opposition parties in the country. Maduro seeks access to capital, legitimacy, guarantees against prosecution, and division within factions of domestic opponents—all of which he can accomplish through negotiations.

However, these factors are not the only ones at play in determining Maduro’s negotiation participation. After the highly visible diverging strategies within the opposition during the recent regional elections—and Julio Borges’ recent resignation and call for the interim government’s dissolution—Maduro might decide to simply wait out further erosion of opposition unity, instead of engaging with it directly. The success of such a strategy, if taken, would enhance the regime’s monopoly on power.

Our answer to question #10: Too early to call.

The odds are not in his favor, but it’s too early to say. Recent polls suggest that President Bolsonaro and former President Luiz Inacio Lula da Silva will face each other in a second round of elections, repeating the 2018 Bolsonaro versus Workers’ Party (PT) duel. However, this time around, former President Lula, as the PT candidate, is leading the way in early polling. Both candidates have a strong support base, but former President Lula’s history with corruption and President Bolsonaro’s mismanagement of the pandemic and current economic hurdles also give them significantly high rejection rates.

Third-way candidates, such as President Bolsonaro’s former minister of justice, Sergio Moro—famous for leading the Car Wash Operation that put President Lula in jail—is running on an anticorruption, center-right platform. Those Brazilians who in 2018 voted for President Bolsonaro as a “vote against corruption” might be more inclined to seek other alternatives. Current high inflation and unemployment rates might also play against President Bolsonaro’s reelection. Having said that, it will likely be a close race, and there is still a long way to go until elections in October 2022.

BONUS QUESTION ANSWER: YES

Brazil and Argentina are the only Latin American counties that have already qualified for the 2022 World Cup. In the Caribbean, Jamaica seems to be the only country with a chance of qualifying. While it is impossible to know who will be in the final (RIP Paul the Octopus), Brazil and Argentina are always strong contenders.

The post Spotlight: Latin America and the Caribbean – Ten questions for 2022 appeared first on Atlantic Council.

Infographic: Why North America matters?

Eva Lardizabal — Thu, 18 Nov 2021 18:03:57 +0000

DOWNLOAD PDF

This week’s North American Leaders’ Summit will focus on opportunities for deepened collaboration on issues such as health, commerce and investment, security, and migration. The Leaders’ meeting – following a five-year hiatus – reaffirms the importance of US-Mexico-Canada cooperation. A vibrant and more economically integrated North America is fundamental to advance common interests.

This new Adrienne Arsht Latin America Center infographic highlights North American leadership across the aforementioned issues

The post Infographic: Why North America matters? appeared first on Atlantic Council.

Silence is assent: A path forward in US-Mexico energy and climate relations

David L. Goldwyn, Neil Robert Brown — Tue, 16 Nov 2021 21:51:10 +0000

The United States has deep and enduring interests in a stable, prosperous Mexico. Both countries are among each other’s top trading partners; their climates, cultures and supply chains are deeply interconnected; and US national security concerns regarding migration from the Northern Triangle area of Central America are strongly influenced by employment, prosperity, and economic opportunities in Mexico itself. Regrettably, the federal government of Mexico, under the auspices of the Andrés Manuel López Obrador (AMLO) administration, is now taking steps in the energy and climate arena that contrary to Mexican law and international trade agreements which are causing broad economic harm and placing unnecessary strain on the cross-border relationship. These steps, such as pending constitutional changes in the power generation sector, are sharply eroding the investment climate in Mexico across industries, rapidly reversing efforts to reduce Mexico’s greenhouse gas emissions in line with its own national climate goals, and threatening to undermined shared bilateral interests in improving economic conditions and quality of life, especially in Mexico’s southern regions. Resetting bilateral cooperation on climate and energy is possible to do in a way that respects Mexico’s energy sovereignty, but it must start with decisive action by President Biden to protect US interests and United States-Mexico-Canada Agreement (USMCA) commitments.

In an effort to protect the finances and monopolistic positions of the national oil company, Pemex, and the Federal Electricity Commission (CFE), the Mexican government has seized US-owned terminals used to import American petroleum products for Mexicans, given preference to higher-GHG-emitting sources of electricity over privately held renewable sources, and subsumed political control of the formerly independent regulator Comisión Reguladora de Energía (CRE) into the national energy ministry, Secretaría de Energía (SENER), thus allowing the CRE to be used to block permits for renewable power developments and to harass US companies. These steps contravene the commitments that President López Obrador himself made when he (re)signed the USMCA. Among other stipulations, that agreement provides US companies with national treatment in Mexico that bars discrimination in favor of state-owned Pemex and CFE, forbids barriers to energy of US energy products, and prohibits any efforts by the government at nationalization and expropriation of privately held assets. Mutual respect and assurance of these carefully negotiated provisions is at the heart of the bilateral, and indeed the trilateral, relationship, along with the strength of North America as a whole in a hotly competitive global economy.

So far, the Biden administration, mindful of Mexico’s indispensable cooperation on immigration issues, has been largely silent on the AMLO government’s actions which so clearly threaten cross-border cooperation on energy and climate security. President López Obrador is a leader who believes that important messages come from the head of government and, as demonstrated in his responsiveness to former President Trump, has proven willing to take such messages seriously. When North American leaders meet in Washington this Thursday, it is essential for President Biden, as well as Secretary Blinken and Secretary Kerry, to be absolutely clear to their Mexican counterparts that these USMCA treaty violations, as well as the proposed reforms which would constitutionally enshrine discrimination against nongovernmental generators, are wholly unacceptable and will result in retaliation at the highest levels of the US government. Importantly, President Biden need not imitate the style of public admonishment in asserting American interests associated with his predecessor, and he need not reverse AMLO’s deeply held nationalistic energy ideology, but he must be clear that there is no free pass for expropriation and discrimination among neighbors and allies. Setting these red lines is essential for Mexico’s future prosperity and America’s national security. On the other hand, failure to act will chill private investment in Mexico—other than that from China—for the foreseeable future. In the interim, Mexico will continue to regress on decarbonization, renege on its climate commitments—violating its own laws—and crush low-cost renewable energy in Mexico in its misguided nationalistic push. In the long term, undermining private investment will undermine Mexican prosperity and quality of life not just for Mexicans, but also for residents of the Northern Triangle region of Central America, in which an undermining of regional investment efforts will exacerbate illegal migration.

The Mexican energy reforms, which took 76 years to enact, are now on the verge of producing both fresh revenue for the Mexican economy and low-cost, affordable, and privately financed renewable energy, which will be foundational to Mexico’s development and prosperity of its people. The stakes at this week’s meeting could hardly be higher. From President López Obrador’s point of view, when it comes to Washington, silence is assent. President Biden should not miss the opportunity to make the US position clear.

Neil Brown formerly served on the senior Republican staff of the Senate Foreign Relations Committee and is currently a nonresident senior fellow at the Atlantic Council Global Energy Center and managing director at the KKR Global Institute.

EnergySource

Meet the authors

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David L. Goldwyn

Adrienne Arsht Latin America Center Global Energy Center

Caribbean Climate Change & Climate Action

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Neil Robert Brown

Energy Markets & Governance Energy & Environment

EnergySource Nov 10, 2021

Nuclear power and the energy transition in non-OECD countries

By Robert F. Ichord, Jr.

In non-OECD countries, nuclear power’s role in immediate emissions reductions appears to be minimal, due to long lead times and other mitigating factors. But after 2030, rapid innovation could mean that nuclear energy will have a much more important part to play. OECD countries should partner with non-OECD countries to lay the groundwork now.

Energy & Environment Energy Transitions

EnergySource Nov 1, 2021

The net-zero kingdom: A third way

By Andrea Clabough

Released to great fanfare, Saudi Arabia’s new green pledges represent an attempt to build a clean future on the bedrock of fossil fuels. The viability of that approach is far from certain.

Energy & Environment Energy Transitions

EnergySource Oct 25, 2021

IEA World Energy Outlook 2021: All eyes on net zero

By Ameya Hadap

With COP26 rapidly approaching and the challenge of net zero on everyone’s minds, climate negotiators need tools. The IEA’s World Energy Outlook 2021 is the perfect one.

Energy & Environment Energy Transitions

Learn more about the Global Energy Center

Global Energy Center

The Global Energy Center promotes energy security by working alongside government, industry, civil society, and public stakeholders to devise pragmatic solutions to the geopolitical, sustainability, and economic challenges of the changing global energy landscape.

The post Silence is assent: A path forward in US-Mexico energy and climate relations appeared first on Atlantic Council.

Buscando la adhesión de México

Christopher Skaluba, Gabriela R. A. Doyle — Tue, 02 Nov 2021 21:09:33 +0000

La presidencia de Donald J. Trump ha puesto en duda la suposición de que la OTAN podía contar con el apoyo del comandante en jefe estadounidense. El desafío que Trump plantea a la ortodoxia en torno a la Alianza es en parte personal, en parte político, y en parte reflejo del cambio de actitud de la opinión pública estadounidense sobre la política exterior y de defensa. También resuena, en el fondo, si no en el estilo, con aspectos de las presidencias de Barack Obama y George W. Bush, en las que la OTAN se consideraba a veces una carga que había que mantener en lugar de un activo que operar.

Si bien esta realidad podría considerarse circunstancial para cada administración, el cuestionamiento de la centralidad de la OTAN para los intereses de seguridad de los Estados Unidos debería considerarse como una tendencia con fundamentos estructurales subyacentes vinculados al sentimiento público. El desapego progresivo de los Estados Unidos de la OTAN podría dar lugar a una repentina desvinculación de la Alianza, una situación a la que la OTAN no podría sobrevivir y que, según múltiples testimonios, estuvo a punto de producirse durante la Cumbre de la OTAN en Bruselas de 2018.¹ Para los europeos, que consideran que las garantías de seguridad de Estados Unidos son fundamentales para su soberanía, y para aquellos en los Estados Unidos que creen que el sistema de alianzas de Estados Unidos es la condición sine qua non de su poder e influencia a nivel mundial, existe una confluencia urgente de propósitos para reavivar el compromiso fundamental de Washington con la OTAN.

El ingreso hipotético de México en la OTAN puede ser un ingrediente necesario para que los Estados Unidos siga invirtiendo en la seguridad europea a largo plazo.² Esta sugerencia se hace teniendo en cuenta la realidad de que el poder económico³ y político⁴ de los Estados Unidos se está desplazando hacia lugares y poblaciones con menos vínculos tradicionales con Europa, de modo que resulta imperativo ampliar el atractivo de la OTAN para un público estadounidense cada vez más diverso.

Argumentos a favor de diversificar el apoyo público estadounidense a la OTAN

La idea de que México es clave para mantener el compromiso de Estados Unidos con una Alianza cuya principal misión es disuadir la agresión rusa en Europa es, sin duda, contraintuitiva. De igual forma se requiere una evaluación del por qué ésta sería una opción atractiva para México y de lo que México aportaría a la Alianza en términos prácticos; hay argumentos convincentes, mas no concluyentes, sobre ambos aspectos.

Nuestro planteamiento parte de la premisa de que la OTAN es fundamental para el liderazgo mundial de los Estados Unidos, de modo que hacerla relevante para las comunidades emergentes en los Estados Unidos resulta obligatorio si la Alianza quiere ganarse su lealtad política. De igual manera supone que mantener el apoyo a la OTAN debe ser algo más que un ejercicio de diplomacia pública, aunque éste sea un elemento necesario. Por el contrario, garantizar el apoyo de la opinión pública estadounidense a la Alianza debe basarse en políticas que interesen a un segmento de la ciudadanía cada vez más diverso y con más poder.

Hacer que estas políticas sean relevantes para una amplia franja de la población estadounidense es especialmente difícil en un país tan extenso como los Estados Unidos. Las divergencias regionales, la diversidad étnica y racial y la polarización política hacen que las soluciones monolíticas sean poco prácticas. De hecho, las fechorías rusas—incluida la injerencia directa en las elecciones estadounidenses—no son la preocupación generalizada y animada que eran cuando, durante la Guerra Fría, el arsenal nuclear de Moscú constituía una preocupación omnipresente para todo el mundo. Es posible que una competencia a largo plazo entre los Estados Unidos y China pueda servir como causa de unión general, pero el papel de la OTAN en ese escenario es incierto, ya que la opinión pública europea no se siente amenazada militarmente por China.

Por el contrario, es más probable que el compromiso perdurable de los Estados Unidos con la OTAN se garantice mediante una serie de políticas o misiones que reflejen los intereses de seguridad de un público estadounidense cada vez más diverso. Entre ellos debe figurar, sin duda, la disuasión frente a Rusia—que también debe interesar a los europeos—pero igualmente podría ser necesario combatir amenazas no tradicionales, como las pandemias y el cambio climático, que cada vez son más importantes para los ciudadanos más jóvenes.⁵ Sin embargo, los intereses regionales seguirán siendo también una parte importante del rompecabezas.

Al igual que la atención a la seguridad de los aliados europeos ha sido una prerrogativa para generaciones de estadounidenses de linaje europeo—que hasta ahora han dominado el poder político y económico en los Estados Unidos—tiene sentido que los ciudadanos de otros orígenes se vean obligados a preocuparse por la seguridad de sus países de origen. Para la OTAN, esto podría significar un papel más destacado al abordar la seguridad en África o Asia.⁶ Pero primero, los intereses de la comunidad hispana/latinx⁷ deberían tener prioridad, sobre todo porque la formalización de una relación entre México y la OTAN constituye un objetivo político alcanzable.

Al igual que la atención a la seguridad de los aliados europeos ha sido una prerrogativa para generaciones de estadounidenses de linaje europeo—que hasta ahora han dominado el poder político y económico en los Estados Unidos—tiene sentido que los ciudadanos de otros orígenes se vean obligados a preocuparse por la seguridad de sus países de origen.

Tropas mexicanas desfilando el 16 de septiembre de 2015. (Fuente Wikimedia Commons)

Las tendencias demográficas nacionales en Estados Unidos también apoyan esta lógica. Según el Pew Research Center, la población hispana/latinx de Estados Unidos alcanzó los 60.6 millones en 2019, lo que supone el 18% de la población total de los Estados Unidos.⁸ De esa cifra, las personas de origen mexicano representan el 62% de la población latinx total del país, o alrededor de unos 37 millones de personas. Entre 2010 y 2019, la comunidad latinx representó más de la mitad de todo el crecimiento de la población de los Estados Unidos, incluso cuando ese crecimiento ha comenzado a disminuir. En general, los latinx son el segundo grupo étnico más grande del país, detrás de los blancos no hispanos.⁹

Dado que se prevé que la comunidad hispana/latinx represente el 29% de la población estadounidense en 2050, es preciso tener en cuenta sus opiniones sobre las relaciones internacionales.¹⁰ Si bien los datos en las encuestas sobre las preferencias de los latinos en materia de política exterior,¹¹ son limitados y contradictorios, y aún menos sobre las opiniones respecto a la OTAN, anecdóticamente, es una prioridad baja. Sin embargo, un estudio del Chicago Council on Global Affairs de 2014 descubrió “que los hispanoamericanos son más positivos que otros estadounidenses hacia México. En la escala de ‘sentimientos’ de 0 a 100, siendo 100 el más cálido y 50 el neutro, los latinos dan a México una calificación media de 67, frente a una media de 51 entre los no latinos.”¹²

A falta de nuevas investigaciones, se desconoce si el ingreso de México en la OTAN motivaría a la comunidad latinx de los Estados Unidos a convertirse en defensores de la Alianza, pero es una suposición razonable basada en los datos disponibles actualmente y en el sentido común. Incluso un debate sobre dicha posibilidad podría dar a conocer la OTAN a un número significativo de ciudadanos estadounidenses que de otro modo no estarían familiarizados con la Alianza, un resultado beneficioso en sí mismo, y cuyo efecto puede medirse. Para ello, un diálogo estructurado entre la OTAN y México para explorar una base de cooperación constituiría un primer paso positivo.

Si bien la adhesión de México a la OTAN es un proyecto generacional que requiere la alineación de una serie de incentivos políticos y normativos por todas las partes, una asociación formal es posible a corto plazo. Tal perspectiva representa una oportunidad para determinar cómo se verían afectadas las actitudes de los latinx estadounidenses hacia la OTAN, a la vez que proporciona el tiempo necesario para trabajar en los beneficios prácticos de una eventual adhesión tanto para Bruselas como para Ciudad de México.

Ver el vídeo

Planteando el caso a las capitales aliadas

Aunque el argumento central de este ensayo es que los aliados europeos deberían apoyar una relación formal con México como medio para consolidar el apoyo a largo plazo de los Estados Unidos a la OTAN, el argumento tradicional a favor de la eventual adhesión de México es razonablemente sólido en cuanto a sus fundamentos.

En términos reales y relativos, México aportaría importantes recursos a la Alianza. Luego de haber gastado algo más de 5,000 millones de dólares en defensa en 2019, México se situaría en la mitad superior de los miembros de la OTAN, aunque con un gasto en defensa del 0.5% del PIB, ocuparía el último lugar de la OTAN proporcionalmente.¹³ Sin embargo, el ingreso en la Alianza seguramente estaría condicionado a un aumento del presupuesto de defensa, de modo que los 5,000 millones de dólares de referencia tendrían una ventaja incorporada. Con cerca de 237,000 efectivos en servicio activo, México sería el tercer ejército de la OTAN, por detrás de los Estados Unidos y Turquía, y el ejército y la marina representarían la mayor parte de los efectivos mexicanos.¹⁴ Para poner esto en perspectiva, la adhesión de México añadiría más personal militar en servicio activo a las filas de la OTAN que los trece nuevos miembros de la Alianza juntos.

Aún cuando las fuerzas armadas de México tienen capacidades más limitadas que los ejércitos de más alto nivel de la OTAN, sus capacidades parten de un piso alto, beneficiándose de la cooperación bilateral en materia de seguridad con los Estados Unidos. Como explica un estudio del Wilson Center de 2016, “En la última década, las fuerzas armadas mexicanas se han convertido en un ejército fortalecido y más profesional, experto en la guerra de cuarta generación, que opera en todo el espectro del conflicto, desde misiones quirúrgicas de las Fuerzas Especiales de pequeñas unidades hasta las operaciones de estabilidad a nivel de división en áreas comparables en tamaño a Bélgica.”¹⁵ Al igual que la mayoría de los nuevos aliados o socios, no se esperaría que México fuese un contribuyente significativo a las misiones de la OTAN de forma inmediata, aunque en teoría, el tamaño y la capacidad de sus fuerzas armadas—que cuentan con un amplio historial de misiones de Ayuda Humanitaria/Apoyo en caso de Catástrofes en todo el mundo—lo hacen capaz de contribuir.¹⁶

Más allá de los argumentos de capacidad, México podría servir como puerta de entrada para una mayor presencia de la OTAN en América Latina, donde la Alianza está ausente fuera de una asociación formal con Colombia. Dada la influencia crítica de Rusia para apuntalar al régimen de Nicolás Maduro en Venezuela y la creciente influencia de China en el Sur Global, un mayor papel de la OTAN en América Latina podría fomentar la promoción de la democracia al tiempo que proporcionaría un efecto disuasorio oportuno, incluyendo la solicitud de Rusia a México para aumentar los acuerdos bilaterales de comercio y seguridad. Además, la incorporación de un tercer país del Pacífico a la Alianza contribuiría a fomentar los vínculos transatlánticos y transpacíficos con vistas a contener a China.

Con el tiempo, la OTAN podría utilizar sus relaciones con México y Colombia para replicar sus otros acuerdos de asociación regional, como el Diálogo del Mediterráneo, con el fin de incluir consultas políticas para compartir información sobre las actividades locales de Rusia y China, y fomentar el apoyo a las políticas sobre 5G, las cadenas de suministro o contrarrestar la desinformación. En tal contexto, el coqueteo de Brasil con la OTAN parecería menos descabellado, y otras posibilidades, como una futura Cuba democrática asociada a la OTAN, serían conceptos alcanzables.

Independientemente de otros beneficios, los aliados europeos querrían tener garantías de que se puede contar con México para apoyar las decisiones relacionadas con la defensa y la disuasión en Europa. Incluso la perspectiva de mantener el compromiso de los Estados Unidos con la causa de la soberanía europea sería menos atractiva si México ejerciera su derecho de veto en medio de una crisis con Rusia, por ejemplo. Si bien estas garantías son difíciles de imaginar en la actualidad, es probable que se puedan conseguir mediante un diálogo a lo largo del tiempo.

Planteando el caso a México

Las largas tensiones entre México y Washington y la renuencia histórica de México a imponerse en los asuntos de seguridad global hacen que la idea de pertenencia de México a una alianza de seguridad liderada por los Estados Unidos sea ostensible.¹⁷ Como país sin una amenaza militar tradicional, es poco probable que México necesite la protección del Artículo 5. De hecho, la adhesión a la OTAN podría aumentar los riesgos para la seguridad de México, al requerir compromisos militares en misiones alejadas de sus preocupaciones de seguridad tradicionales, mientras se desvían recursos hacia gastos de defensa y lejos de las necesidades sociales apremiantes.

Sin embargo, una relación formal con la OTAN daría derecho a México a una reforma mejorada del sector de seguridad (RSS)¹⁸ por parte de una organización muy versada en la materia; reforzaría las relaciones comerciales transatlánticas a través de la consolidación de los intereses económicos y de seguridad en conjunto con el Tratado Estados Unidos-México-Canadá (TMEC) y el Acuerdo Global UE-México;¹⁹ le permitiría enmarcar una política exterior como un socio aún más cercano en la seguridad de América del Norte tras el TMEC; y subrayaría su estatus como una potencia regional²⁰ creciente y un ejemplo influyente para otros estados latinoamericanos.²¹

El más atractivo de estos factores podría ser el prestigio y el estatus que supondría una afiliación a la OTAN. A pesar del enfoque nacionalista del presidente mexicano Andrés Manuel López Obrador, éste comparte un objetivo con su predecesor: conseguir un mayor respeto para México en el extranjero. Una asociación formal con la OTAN se alinea perfectamente con las identidades e intereses de México como potencia norteamericana y latinoamericana. México puede acentuar su relación dentro de la comunidad norteamericana, solidificando los renovados lazos con Estados Unidos y Canadá a través del TMEC. Al mismo tiempo, la adhesión reforzaría el papel de México, actualmente implícito, como modelo para otras naciones latinoamericanas, dándole la oportunidad de influir en cualquier ampliación de la presencia de la OTAN en la región.

Una asociación formal con la OTAN se alinea perfectamente con las identidades e intereses de México como potencia norteamericana y latinoamericana.

_{El presidente Donald J. Trump recibe al presidente de los Estados Unidos Mexicanos, Andrés Manuel López Obrador, el 8 de julio de 2020.}

_{(Fuente: White House Flickr)}

A su vez, varios países de la OTAN podrían ofrecer incentivos bilaterales atractivos para la participación de México, incluido el apoyo binacional de los Estados Unidos y Canadá a los sectores policial y judicial de México. La OTAN serviría tanto para institucionalizar como para hacer multilaterales los diálogos existentes con los Estados Unidos en materia de defensa y seguridad, de forma que podría beneficiar a México desde el punto de vista práctico y político (y que podrían ser igualmente bien acogidos por el Congreso y la comunidad política de los Estados Unidos). La OTAN podría también servir como columna vertebral para intensificar los diálogos sobre seguridad con naciones como España y Francia, con las que México ya mantiene sólidos vínculos.

Encontrar el conjunto adecuado de incentivos para los ciudadanos y los políticos mexicanos llevará tiempo, pero hay opciones reales. Una serie de circunscripciones—entre ellas la Secretaría de la Defensa Nacional (SEDENA) y la Secretaría de Marina (SEMAR), que obtendrían recursos adicionales y la capacidad de centrarse en tareas militares más tradicionales en lugar de seguridad interior—podría considerar una relación con la OTAN como una posibilidad atractiva.²²

Conclusión

La comunidad política estadounidense se ha centrado en apuntalar el apoyo de los Estados Unidos a la OTAN persuadiendo a los Estados miembros europeos para que aumenten sus contribuciones para equilibrar la carga. La idea de que el aumento del gasto en defensa europeo solucionaría el malestar de Estados Unidos con la OTAN no tiene sentido. De hecho, el debate sobre el reparto de las obligaciones está sirviendo para representar las realidades demográficas subyacentes que están en el origen de la disminución del apoyo estadounidense a la Alianza.

Si bien se supone que el balance de las obligaciones es importante para Trump y sus partidarios, no hay pruebas de que incluso grandes aumentos en el gasto europeo en defensa durante la presidencia de Trump hayan mejorado la posición de la OTAN con el presidente estadounidense o su base política. En lugar de intentar apaciguar a los que no pueden ser apaciguados, la comunidad política estaría mejor servida si encontrara nuevos defensores de la Alianza.

Al discutir esta propuesta con colegas europeos, una réplica común es que la construcción de la relación de la OTAN con México es una distracción de los muchos retos de seguridad que enfrenta Europa. De hecho, pudiera ser la clave para mantener a Estados Unidos en rápida evolución en sintonía con esas mismas preocupaciones. Es comparable a un caso como el de Islandia, cuya importancia estratégica (la geografía) supera otro tipo de contribuciones que pudiera hacer. Para los aliados que dependen de las garantías de seguridad de los Estados Unidos, poco debería importar que México envíe fuerzas a una misión reforzada de Presencia Avanzada si su membresía mantiene a Estados Unidos comprometido con la causa de la soberanía europea.

Si bien la idea de una posible adhesión de México a la OTAN puede parecer improbable, también lo fue en su momento la posibilidad de que los países del Pacto de Varsovia se unieran a la Alianza antes de que las circunstancias intervinieran para hacerlo inevitable. Mientras los Estados Unidos experimenta una dramática agitación política relacionada con el rápido reajuste demográfico, las circunstancias pueden estar conspirando de nuevo para escribir el próximo y sorprendente capítulo de la OTAN.

* * *

Christopher Skaluba es el director de la Iniciativa de Seguridad Transatlántica en el Centro Scowcroft para Estrategia y Seguridad del Atlantic Council. Anteriormente se desempeñó como director principal de Política Europea y de la OTAN en el Despacho de la Secretaría de Defensa.

Gabriela R. A. Doyle es la asistente de programa en la Iniciativa de Seguridad Transatlántica.

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NATO 20/2020 is a weekly podcast that explores 20 bold ideas to push NATO to be more visionary, more capable, and more self-evidently valuable to the security of more people.

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1 Julia E. Barnes y Helene Cooper, “Trump Discussed Pulling U.S. From NATO, Aides Say Amid New Concerns Over Russia,” en The New York Times, 14 de enero de 2019, https://www.nytimes.com/2019/01/.

2 Si bien el Artículo 10 del Tratado de Washington limita la pertenencia a la OTAN a las naciones europeas, esto puede superarse, con el respaldo de los miembros de la Alianza mediante los protocolos de adhesión que se han utilizado de forma habitual en la historia de la OTAN para modificar el tratado o hacer las excepciones necesarias. Desde el punto de vista geográfico, México es tan equidistante de la zona del Atlántico Norte como Turquía, miembro de la Alianza desde hace mucho tiempo, mientras que una parte importante del territorio mexicano se encuentra por encima del Trópico de Cáncer, la línea de demarcación sur del territorio del Atlántico Norte en el Tratado de Washington.

3 Según nuestros propios cálculos, utilizando datos del Fondo Monetario Internacional y la Oficina de Análisis Económico del Departamento de Comercio de EE. UU., California, Texas y Arizona en combinación son la tercera economía más grande del mundo por PIB.

4 Kristen Bialik, “For the Fifth Time in a Row, the New Congress is the Most Racially and Ethnically Diverse Ever,” Pew Research Center, 8 de febrero de 2019, https://www.pewresearch.org/fact-tank/2019/02/08/for-the-fifth-time-in-a-row-the-new-congress-is-the-most-racially-and-ethnically-diverse-ever/.

5 Harvard Kennedy School Institute of Politics, “Harvard Youth Poll,” 23 de abril de 2020, https://iop.harvard.edu/youth-poll/harvard-youth-poll; El Secretario General de la OTAN, Jens Stoltenberg, pronunció un discurso ante estudiantes universitarios de diez países de la OTAN en un seminario sobre clima y seguridad, en el que subrayó que la OTAN debe poner de su parte para controlar el cambio climático. OTAN (Organización del Tratado del Atlántico Norte), “Secretary General: NATO Must Help to Curb Climate Change,” 28 de septiembre 2020, https://www.nato.int/cps/en/natohq/news_178372.htm?selectedLocale=en.

6 Los afroamericanos y los asiáticos representan algo más del 13% y el 6% de la población estadounidense, respectivamente. United States Census Bureau, “QuickFacts,” consultado el 10 de octubre de 2020, https://www.census.gov/quickfacts/fact/table/US/IPE120219.

7 La palabra “Latinx” es un término relativamente nuevo que se utiliza para identificar de forma más inclusiva a la comunidad hispana y latina. “Hispano” se refiere tradicionalmente a una persona de origen hispanohablante, incluso de España, que reside en los Estados Unidos. “Latino” suele denominar a un individuo de origen latinoamericano o caribeño. Para aclarar el confuso solapamiento entre los dos términos y ofrecer una alternativa neutra en cuanto al género, “latinx” se utiliza cada vez más como una alternativa panétnica políticamente correcta, aunque no ha sido ampliamente adoptada. A los fines de este ensayo, se han utilizado hispano y latinx indistintamente o en combinación según lo requiera el material de referencia. Mark Hugo Lopez, Jens Manuel Krogstad, and Jeffrey S. Passel, “Who Is Hispanic?” Pew Research Center, 15 de septiembre de 2020, https://www.pewresearch.org/fact-tank/2020/09/15/who-is-hispanic/.

8 Luis Noe-Bustamante, Mark Huge Lopez, y Jens Manuel Krogstad, “U.S. Hispanic population surpassed 60 million in 2019, but growth has slowed,” Pew Research Center, 7 de julio de 2020, https://www.pewresearch.org/fact-tank/2020/07/07/u-s-hispanic-population-surpassed-60-million-in-2019-but-growth-has-slowed/.

9 Jens Manuel Krogstad and Luis Noe-Bustamante, “Key Facts About U.S. Latinos for National Hispanic Heritage Month,” Pew Research Center, 10 de septiembre de 2020, https://www.pewresearch.org/fact-tank/2020/09/10/key-facts-about-u-s-latinos-for-national-hispanic-heritage-month/; Luis Noe-Bustamante, Mark Hugo Lopez, and Jens Manuel Krogstad, “U.S. Hispanic Population Surpassed 60 Million in 2019, but Growth Has Slowed,” Pew Research Center, 7 de julio 2020, https://www.pewresearch.org/fact-tank/2020/07/07/u-s-hispanic-population-surpassed-60-million-in-2019-but-growth-has-slowed/.

10 Jeffrey S. Passel and D’Vera Cohn, “U.S. Population Projections: 2005-2050,” Pew Research Center, 11 de febrero de 2008, https://www.pewresearch.org/hispanic/2008/02/11/us-population-projections-2005-2050/.

11 Mientras que un estudio de 2019 del Pew Research Center descubrió que una minoría de hispanos cree que los Estados Unidos debería participar activamente en los asuntos mundiales, un informe de 2014 del Chicago Council of Global Affairs observó que las preferencias entre los “blancos” y los latinx eran prácticamente iguales en cuanto al apoyo al liderazgo mundial de los Estados Unidos. Pew Research Center, “Large Majorities in Both Parties Say NATO Is Good for the U.S.,” 2 de abril de 2019, https://www.pewresearch.org/politics/2019/04/02/large-majorities-in-both-parties-say-nato-is-good-for-the-u-s/#views-of-u-s-relationship-with-its-allies; Dina S. Smeltz and Craig Kafura, Latinos Resemble Other Americans in Preferences for US Foreign Policy, Chicago Council of Global Affairs, 2015, https://www.thechicagocouncil.org/sites/default/files/Hispanics%20and%20Foreign%20Policy%20-%20Final.pdf.

12 Smeltz y Kafura, Latinos Resemble.

13 Marina Pasquali, “Military Expenditure As Percentage of Gross Domestic Product (GDP) in Mexico from 2007 to 2019,” Statista, 15 de junio de 2020, https://www.statista.com/statistics/793995/military-expenditure-share-gdp-mexico/.

14 “Chapter Eight: Latin America and the Caribbean,” Military Balance (2020), 120 (1): 389.

15 Iñigo Guevara, A Bond Worth Strengthening: Understanding the Mexican Military and U.S.-Mexican Military
Cooperation, Mexico Institute, Wilson Center, octubre de 2016, https://www.wilsoncenter.org/publication/
bond-worth-strengthening-understanding-the-mexican-military-and-us-mexican-military.

16 Lt Col Ricardo Reynoso, Mexican Army, “Mexican Humanitarian Assistance System: A Monograph,” School of Advanced Military Studies, United States Army Command and General Staff College, Forth Leavenworth, Kansas, 2016, https://apps.dtic.mil/sti/pdfs/AD1022238.pdf.

17 Anvesh Jain, “Canada, NATO, and the ‘Dumbbell Concept,’” NATO Association of Canada, 17 de mayo de 2019, http://natoassociation.ca/canada-nato-and-the-dumbbell-concept/.

18 Marina Caparini, “Security Sector Reform and NATO and EU Enlargements” en SIPRI Yearbook 2003: Armaments, Disarmaments, and International Security (Stockholm: Stockholm International Peace Research Institute, 2003), https://www.sipri.org/yearbook/2003/07.

19 European Union, “Mexico and the EU,” 12 de mayo de 2016, https://eeas.europa.eu/delegations/mexico/14897/mexico-and-eu_en.

20 El secretario de Defensa mexicano, general Salvador Cienfuegos, y el secretario de la Armada mexicana, almirante Vidal Soberón, señalaron la voluntad y el deseo de México de involucrarse más en los asuntos globales en la Conferencia Ministerial de Defensa de América del Norte en 2017. En una llamada bilateral tanto con Cienfuegos como con Soberón, el entonces secretario de Defensa Mattis “elogió el creciente liderazgo de México en la región.” 8 de febrero de 2017, DOD News, https://www.defense.gov/Explore/News/Article/Article/1075465/mattis-mexican-military-leaders-discuss-bilateral-relationship/.

21 David G. Haglund, “Pensando Lo Imposible: Why Mexico Should Be the Next New Member of the North Atlantic Treaty Organization,” Latin American Policy, 14 de octubre de 2010, 1(2): 281.

22 Rebecca Bill Chavez, “The Return of Latin America’s Military,” The New York Times Opinion, 14 de Agosto de 2018, https://www.nytimes.com/2018/08/14/opinion/mattis-latin-americas-military.html.

The post Buscando la adhesión de México appeared first on Atlantic Council.

The security of defense trade with allies: Enhancing contact, contracts, and control in supply chains

James Hasik — Wed, 28 Jul 2021 14:59:46 +0000

FORWARD DEFENSE

ISSUE BRIEF RELEASE

Former Nonresident Senior Fellow

What is security of supply?

Security of supply is a conviction that crucial goods and services will be available when a government’s foreign and military policies demand action. Around NATO, the European Union, and in other contexts, governments have entered into various forms of agreements designed to ensure that security in a crisis. The United States has such agreements of varying enforceability and reciprocity with twenty-eight countries. These include the legislated designations of the national technology and industrial base (NTIB), security of supply arrangements (SOSAs), reciprocal defense procurement memoranda of understanding (RDP MOUs), reciprocal government quality assurance agreements (RGQAAs), and commercial contracts with foreign suppliers.

Protectionism has recently been rising around the world and particularly in the United States, where enthusiasm for rewarding domestic producers has often been conflated with the actual demands of national security.
James Hasik

Why is this issue critical now?

Why discuss these now? Protectionism has recently been rising around the world and particularly in the United States, where enthusiasm for rewarding domestic producers has often been conflated with the actual demands of national security. During the COVID-19 pandemic, several countries initially restricted exports of medical supplies on which trading partners depended. The United States was at times on both sides of that problem. Even now, there is rising US enthusiasm for rewarding domestic producers. These trends beg the question: Would even the SOSAs, the more reciprocal and salient of these agreements, be honored in a national military crisis?

A foundational study

To answer that question, this issue brief considers the text of the arrangement documents, interviews with Washington-based diplomats and defense officials, and a historical analysis of the few contemporary cases in which US security of supply has been tested. The paper concludes that the SOSAs themselves say little, and that in practice, they have almost never been tested. Nevertheless, the agreements, though unenforceable, have value as easily arranged signals of underlying, enduring relationships between governments. They are thus worth reinforcing and perhaps extending to several other important US partners.

Recommendations for the United States

The issue brief provides several actionable and timely recommendations for improving the way in which US policymakers contact potential foreign suppliers and market their security requirements, contract with those suppliers to negotiate deals and divide proceeds, and control these relationships by monitoring and enforcing deals.

Contact: The assistant secretaries of defense for acquisition and industrial policy should facilitate awareness within the acquisition community of how to leverage agreements undergirding defense trade with allies to secure access to supplies from comparatively advantaged sources.
Contracts: Contracts with foreign sources of supply should employ stockpiling and licensing to hedge against the potential for disruptions of supply arising from circumstances beyond the control of allied governments.
Control: The US government should explore whether security of supply arrangements can be extended to allies and partners whose industrial bases are important to US defense, such as Japan, Taiwan, and Mexico. Doing so could enhance a conviction that goods and services sourced from these countries are secure.

About the author

Former fellow

James Hasik

Forward Defense Scowcroft Center for Strategy and Security

Defense Industry Defense Policy

About the project manager

Fellow

Steven Grundman

Senior Fellow

Forward Defense Scowcroft Center for Strategy and Security

Defense Industry Defense Policy

Transatlantic tariffs, national security, and geopolitical priorities

Barbara C. Matthews — Tue, 01 Jun 2021 20:06:58 +0000

The United States and the European Union announced this week the initiation of a negotiation process aimed at eliminating US tariffs on steel and aluminum imports from Europe by the end of the year. The move reflects the promised rapprochement between the Biden/Harris administration and European allies, assuaging European irritation at having the metal industry – and thus, by implication the EU itself – been formally designated a national security threat by the United States. Additionally, smoothing over the disputes represents a continued effort to increase geopolitical pressure on China.

Successfully concluding these talks will require both parties to navigate some difficult issues over the next six-seven months. This post recaps the situation at hand and the key issues that require resolution.

National security tariffs on steel and aluminum

Section 232 of the Trade Expansion Act of 1962 authorizes the president of the United States (and, thus, the US Trade Representative) to impose tariffs on imports if it is found that the imported items in question constitute a threat to US national security. Section 232 tariffs therefore assume a highly globalized economy generates vulnerability for the domestic economy based on factors other than the terms of trade. The factors all seek to ensure that the US Government can acquire necessary materials from domestic sources in the event of a national emergency. When the Trump administration in 2018 imposed tariffs on steel and aluminum imports under Section 232 of the Trade Expansion Act, it triggered widespread fears of a global trade war. The controversy arose over (i) the foundation for the tariffs on national security grounds and (ii) the global scope of the tariffs, which included traditional transatlantic allies in Europe while exempting the United States’ bordering neighbors in Canada and Mexico pursuant to tariff-free commitments under the United States-Canada-Mexico Agreement.¹ Global trade war fears escalated further when the European Union threatened retaliatory action. Fortunately, trade tensions simmered down in 2019 with no further action. The May 17, 2021 joint statement by the US Trade Representative and the EU Commission acknowledged these concerns by highlighting that “as the United States and EU Member States are allies and partners, sharing similar national security interests as democratic, market economies, they can partner to promote high standards, address shared concerns, and hold countries like China that support trade-distorting policies to account.” Even as the announcement of negotiations focused on eliminating tariffs between the US and the EU, the joint statement also indicated that both the United States and the European Union face damage from steel dumping and overcapacity in the global steel market. However, they may find it difficult to eliminate the tariffs despite best intentions.

Metals trade: Key data points

Policymakers on both sides of the Atlantic frequently assert that Chinese steel and aluminum production generate the majority of adverse competitive effects on the global steel market. The actual import data in the United States tells a slightly different story. Department of Commerce data shows that the top 10 sources of steel imports into the United States do not come from China. Steel imports dropped significantly following the imposition of Section 232 tariffs, including even from Canada that had been exempted from the tariffs.

The data also indicate that the dispersion of importers is far from even. The top three steel importers (Canada, Brazil, and Mexico) account for 50 percent of steel imports. Germany only accounts for 4 percent; Italy for even less.

The import structure for aluminum is more concentrated. Canada accounts for over two-thirds of US aluminum imports. The next three largest importers are the United Arab Emirates, Argentina, and Russia. Aluminum imports from China to the United States are limited to a small set of products (such as rods, wire, and bars). European imports to the United States are minimal.

Finally, the imposition of an import tariff does not mean the tariffs remain in place without the possibility of change. The United States permits US firms to request exclusions from the tariffs, and the Congressional Research Service indicates that the Department of Commerce to date has granted roughly 60 percent of all exclusion requests regarding aluminum. At the end of 2020, the Department of Commerce further announced that 105 steel and fifteen aluminum products would become eligible for a “general exemption.”

European exports of steel and aluminum also are similarly muted. Italy’s exports to the United States are dominated by pharmaceuticals products (17 percent), machinery (12 percent) and aircraft (7 percent). Germany’s exports to the United States follow a similar structure.

In other words: the economic significance of the aluminum and steel tariffs for transatlantic trade is not as large as media headlines might suggest. Similarly, claims that Chinese steel and aluminum distorts import markets are less impactful than asserted. Rather, the symbolic and geopolitical significance of aluminum and steel tariffs is much higher, particularly in the context of global market dynamics.

Two key issues for 2021

The Joint US-EU Statement this week makes clear that policymakers on both sides of the Atlantic seek to join forces to combat a larger, persistent problem in the global market for steel: Chinese over-production. Powered by state subsidies, Chinese steel production alone has increased 418 percent since 2000, making it responsible for nearly 50 percent of all global production by 2019. The success of the Chinese steel market seems to have also inspired many large emerging steel markets (India, South Korea, Russia, Taiwan, Brazil, and Mexico) to scale up rapidly, supported by state subsidies and market intervention.

Transatlantic policymakers must now grapple with two very difficult issues if they are going to successfully eliminate the Section 232 tariffs applied to European producers.

State subsidies: On the surface, a joint US-EU effort to address Chinese overcapacity could take the form of challenging state subsidies provided by Beijing to local firms. The challenges could include bilateral initiatives as well as more formal complaints within the World Trade Organization (WTO).

This will not be an easy transatlantic conversation. Certain EU member states currently provide significant subsidies to their domestic steel and aluminum manufacturers. Market intervention also is not uncommon. Pandemic-era industrial policy spending priorities focused on preserving and creating jobs by funding the transition to a green economy mean that traditional manufacturing companies are likely to receive even larger shares of government funding to facilitate changes in their production processes that decrease their carbon emissions.

European efforts to pressure China to decrease state subsidies for steel and aluminum may not be as effective as policymakers might like. If the elimination of Section 232 tariffs for European steel and aluminum becomes contingent on Chinese action, the prospects for a deal by year end dramatically decrease.

National security: US policymakers could certainly decide that no national security issues arise from European steel and aluminum imports based solely on the nearly minimal amount of such imports relative to other trading partners. European policymakers certainly will seek to promote the perspective that they should at least be treated on a par with the largest importer of both products (Canada), which already receives a large exemption due to the USMCA’s tariff terms.

Eliminating the Section 232 tariffs would certainly go a long way towards assuaging the diplomatic insult of being deemed a national security threat to the United States. But making this decision based on geopolitical grounds potentially undermines the ability to make progress regarding state subsidies that distort global markets.

Transatlantic policymakers have thus created a potentially problematic framework for discussion. If US officials lift the Section 232 tariffs on EU steel and aluminum imports, they effectively determine that European state subsidies and market intervention in this sector is not as important as geopolitical priorities. In other words, they suggest that the problem with the tariffs were not state subsidies themselves – but who was giving them.

Prioritizing preferential treatment for allied nations makes it far more difficult to persuade China by making arguments about substantive market distortion. Any such move instead could backfire, incentivizing China to call out the various government subsidies being distributed as part of the pandemic-era recovery process. Pursuing all these initiatives outside the WTO umbrella potentially further weakens the global trade body. How Europe and the United States resolve the steel and aluminum tariffs issue will thus tell us a great deal about the shape of global trade policy over the near- to medium-term.

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1 The USMCA requires that at least 70 percent of aluminum imports from Canada and Mexico for the automobile sector must enter the United States free of tariffs.

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Raising ambitions: How Latin America and the Caribbean is tackling the climate crisis

Valentina Sader — Fri, 30 Apr 2021 19:38:57 +0000

The ripple effects of last week’s Leaders Summit on Climate, led by US President Joe Biden, will be felt for years, as the international community embraced renewed momentum toward mitigating the impacts of climate change ahead of November’s UN Climate Change Conference of the Parties (COP26) in Glasgow, Scotland. With climate change impacts being felt across the Americas, urgency is rising in this pivotal part of the world.

The Leaders Summit brought together forty world leaders, including seven from Latin America and the Caribbean, representing Antigua and Barbuda, Argentina, Brazil, Chile, Colombia, Jamaica, and Mexico. The Americas are a crucial player in coordinated efforts to tackle global climate change, so we asked experts from the Atlantic Council and elsewhere to lay out what’s next.

What were some of the most ambitious commitments made by Latin America and the Caribbean in mitigating climate change? Are they aligned with the expectation put out by the Biden administration and COP26? How will the international community contribute to these regional efforts?

Jorge Gastelumendi is the global policy director at the Atlantic Council’s Adrienne Arsht-Rockefeller Foundation Resilience Center. He is also a COP26 high level climate champions co-lead for the Race to Resilience.

Putting nature-based solutions at the core of the efforts to fight climate change was the most outstanding, though not surprising, feature of commitments advanced by Latin American and Caribbean representatives—from Brazil’s president, Jair Bolsonaro, indicating the country’s commitment to end illegal deforestation in the Amazon by 2030, to Mexico’s president, Andrés Manuel López Obrador, committing to implement one of the largest reforestation programs in the world. Peru went even farther by committing that 50 out of the 150 actions in its climate plan will be nature-based solutions in sectors such as water management, land use, and forests. The main obstacles to materialize these commitments is the lack of implementation capacity in the region and the lack of financial resources from both public and private actors, particularly the financial sector. The international community, with the leadership of the United States, is critical in helping overcome these two obstacles. Colombia, for example, highlighted exploring innovative financial mechanisms, such as debt-for-adaptation swaps, which could avoid deforestation in the Amazon (a priority of Brazil, Colombia, and Peru) and protect the oceans (a priority for Chile).

President Bolsonaro, in his speech, raised the need for the right to development of current and future generations, also mentioning the Amazonian Paradox. What is the Amazonian Paradox and in what ways can a collaborative approach with the international community, the private sector, civil society, and indigenous communities help address it?

Rodrigo Lima is a lawyer with expertise in international trade, non-tariff barriers and sustainable development. He is the director of Agroicone, a Brazilian sustainable agribusiness organization.

The Amazonian Paradox emerges from the immense contradiction between the assets and potentials from a mega-biodiverse forest that covers almost five million square kilometers over nine countries, and the social realities and inequalities among its more than twenty-three million inhabitants. The possibility to provide effective value to the forest, generate profits from its services, promote its sustainable use, and allow its population to thrive from the economic benefits and environmental services reflects the challenge of the Amazonian Paradox.

It is reasonable to compare the Amazon to a puzzle that needs time and effort to be assembled. The Amazon is home to 329 indigenous lands, covering almost one million square kilometers—local communities, family farmers, medium and large farmers. About 640,000 square kilometers are non-designated public lands, which should be designated as national parks, private areas, indigenous land, or for other uses.

To organize the territory and create policies to enable a low carbon economy, while considering different actors and interests, depends on federal and state governments. But it also relies on cooperation from multiple sources. In this regard, climate finance can play a critical role not just in promoting Reducing Emissions from Deforestation and forest Degradation (REDD+) projects, but more broadly in creating and sustaining a flourishing nature-based economy.

The completed puzzle relies on fostering a thriving economy based on natural resources, tourism, sustainable agriculture, forest management, and conservation activities. Bioeconomy opens a huge possibility to build upon this challenge, connecting extractivist producers to processing facilities and the market, generating social co-benefits from REDD+ projects, harnessing sustainable agriculture production based on innovation and good practices, and generating cosmetics and medicines, among other activities that could transform the Amazonian Paradox into the Thriving Amazonia.

International cooperation, as discussed at the Leaders Summit on Climate and other forums, has a fundamental role to play to support assembling this puzzle. The Amazon cannot be seen as a pure protection area; it must enable and promote social, economic, and environmental benefits for its population while it generates environmental goods to all society.

President López Obrador, in mentioning Mexico’s reforestation program, suggested its expansion to the South of Mexico and into Central America, generating jobs. He also suggested temporary work-permits and residency in the United States for those committed to this program, as a mechanism to address the migration crisis. How could the climate crisis be a greater challenge to the current border crisis? In what ways could addressing climate issues also be an opportunity to solve migration?

Maria Fernanda Bozmoski is the deputy director for programs at the Atlantic Council’s Adrienne Arsht Latin America Center, where she leads the Center’s work on Mexico and Central America.

Hurricane season in Central America is right around the corner, and back-to-back natural disasters may bring the region to the breaking point. The number of migrants will likely increase in anticipation of hurricane season, as well as in the aftermath. While migration from the dry corridor—which stretches from Guatemala to Costa Rica—is likely, hurricanes also greatly affect the Caribbean coast. The Central American Integration System (SICA) estimates that up to eight hurricanes may form in the region this year. Four of the eight may be intense, according to the organization.

Climate change is both a long-term push factor for migration and an accelerant. The United Nations estimates more than 7.3 million people were directly impacted by hurricanes in 2020, and there are more than 8 million starving people in Honduras, Guatemala, and El Salvador—up from 2.2 million in 2018. While the nearly four-fold increase in starvation is not all a result of the climate crisis, the destruction of crops and villages is a factor in this increase. In fact, experts find that climate change is a major factor explaining in the current surge in hunger.

The consequences of climate change are being felt now by current generations and the Caribbean nations are particularly impacted. Like other heads of state, the leaders of Antigua and Barbuda, and Jamaica reinforced the need for support and collaboration on addressing climate change. How could the international community support Caribbean nations in adapting to the existing and upcoming consequences of the rise in global temperatures?

Vicki Assevero is a former senior fellow for the Adrienne Arsht Latin America Center’s Caribbean Initiative.

The international community can support Caribbean nations and other small island developing states (SIDS) by acknowledging the World Meteorological Association’s 2020 Report that sea level rise has doubled, and hurricanes have intensified, so the imperative to finance climate adaptation is urgent. Prime ministers Gaston Browne of Antigua and Barbuda, and Andrew Holness of Jamaica urged acceleration of the pace of implementation of existing accords. This would mean not only funding the financing mechanisms foreseen in the original Paris Climate Accord but also those outlined in the Warsaw Mechanism and the Samoa Pathway. More importantly, multilateral institutions must continue to mobilize capital for greater investments in renewable energy and green technologies. The Caribbean SIDS are also urging new metrics in the form of a multi-dimensional vulnerability index that would facilitate access to concessional financing.

Commitments on energy transition and renewable energy were popular among leaders at the summit. In terms of transitioning to cleaner energy, how close is Latin America and the Caribbean to reaching that goal and significantly reducing its greenhouse gas emissions? What key steps could be taken to accelerate an energy transition in the Americas?

Randolph Bell is the director of the Atlantic Council’s Global Energy Center, and Reed Blakemore is the deputy director of the Atlantic Council’s Global Energy Center.

Though the reaffirmation and raised ambitions for climate action last week from across Latin America and the Caribbean were encouraging, regional progress to meeting climate goals has thus far been inconsistent. That said, growing electricity demand and the cloudy forecast for hydropower (long the prevailing baseload electricity source in the region) presents an important opportunity for countries to take significant steps to transform their energy mix and kickstart their climate goals. Accelerating the introduction of a mix of variable renewables, low-carbon natural gas resources, and in some cases nuclear energy, will offer alternatives to bioenergy, diesel, and coal in order to fulfill new electricity demand while also replacing potential declines in hydropower output. Additional efforts to decarbonize the transportation sector will also further electrify the region and support reduced emissions. Taken together, this makes investment into accompanying grid infrastructure as well as digitalization and energy efficiency important next steps in maximizing the emissions-reducing potential of regional electrification and energy transition.

Valentina Sader, is assistant director and Brazil lead at the Adrienne Arsht Latin America Center.

AfricaSource Apr 23, 2021

Climate change will not be fixed without Africa

By Rama Yade

When Congolese President Félix Tshisekedi spoke at the virtual Leaders Summit on Climate this week, he had the force of the continent behind him. And his message was that developed countries must do more. As the summit comes to a close, the world still has so much to learn from Africa about how to tackle the climate crisis—if the world would only listen.

Africa Climate Change & Climate Action

Fast Thinking Apr 13, 2021

FAST THINKING: Why economic development is key to addressing the migration crisis at the US border

By Atlantic Council

On this episode of Fast Thinking, Atlantic Council experts Rebecca Scheurer and Jason Marczak dive into the root causes of mass emigration from Guatemala, Honduras, and El Salvador, and offer recommendations for long-term solutions to the underlying push factors that drive people from their homes—including crime, gang violence, corruption, and climate change.

Migration Northern Triangle

New Atlanticist Apr 25, 2021

Climate diplomacy can help turn action into results: UAE minister

By Larry Luxner

Al Jaber, the United Arab Emirates’ minister of industry and advanced technology, reflected on the connection between climate partnerships and economic results.

Climate Change & Climate Action Energy & Environment

The post Raising ambitions: How Latin America and the Caribbean is tackling the climate crisis appeared first on Atlantic Council.

Pepe Zhang in El País: México ahuyenta la inversión extranjera excepto la de China

ibernhard — Mon, 26 Apr 2021 14:52:00 +0000

On April 26, 2021, Pepe Zhang was quoted in an El País article, “México ahuyenta la inversión extranjera excepto la de China” (“Mexico discourages foreign investment except that of China”).

Originally quoted in Spanish, Zhang’s remarks translate as follows: “Something that has been consistent between the Trump and Biden administrations here in Washington is that China has become one of the top foreign policy priorities. Part of that is national security. If we look at Mexico through that lens, which is so deeply integrated in the North American block of trade and investment and has a strong relationship with the US, it’s reasonable that Washington is very focused on the Chinese economic presence in Mexico.” Zhang then added, “Having said that, I don’t think we are seeing anything as dramatic as if Washington were actively pressuring Mexico or saying, ‘You have to rethink your investment approach’. I don’t think we’re there yet.”

More about our experts

Staff

Pepe Zhang

Senior Fellow

Former Nonresident Senior Fellow

China Coronavirus

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Busch in The Hill: US should challenge Mexico’s ban on glyphosate and genetically-modified corn at the WTO

Marc L. Busch — Sat, 27 Mar 2021 20:00:00 +0000

ORIGINAL SOURCE

In the News May 11, 2020

Busch in The Hill: A vote against the WTO is a vote against Trump’s trade priorities

By Marc L. Busch

Economy & Business English

In the News Feb 22, 2021

Busch in The Hill: Biden administration must settle unwinnable WTO cases over steel and aluminum tariffs

By Marc L. Busch

Marc Busch writes in The Hill that the US should not want to win its WTO cases on steel and aluminum, as doing so would risk the rest of the world using a wider definition for the WTO’s “national security” exception.

Americas China

In the News Jul 13, 2020

Busch in The Hill: USMCA needs the WTO even more than NAFTA did

By Marc L. Busch

Marc Busch writes that the World Trade Organization (WTO) backstopped NAFTA in the past and must backstop USMCA now if the new trade deal is to succeed.

Americas Economy & Business

Former fellow

Marc L. Busch

Scowcroft Center for Strategy and Security

Americas Economy & Business

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Spotlight: 10 Questions for Latin America and the Caribbean

Adrienne Arsht Latin America Center — Thu, 11 Feb 2021 14:00:00 +0000

As we approach one year since the first COVID-19 case in Latin America and the Caribbean, we look ahead at what might or might not be on the horizon for the region over the next year.

Join us as we look at some of the key questions that may shape the region, then take our informal poll and see how your opinions shape up against our analysis.

Will the region see mass vaccinations? How will regional economies fare? What might be on the agenda for the US relationship with Brazil and Mexico? US President Joe Biden’s administration has entered office with a full inbox: how will developing trends in the region affect the new administration’s agenda?

Here are the eleven questions that the Adrienne Arsht Latin America Center is answering to map the rest of the year.

Question #1: COVID – Will Latin America and the Caribbean achieve widespread vaccination in 2021?

Question #2: Economy – Will regional economies outpace growth forecasts in 2021?

Question #3: Central America – Given the extent of damage from the 2020 hurricanes in Central America, will the region see more climate migrants?

Question #4: Mexico – Will joint security challenges top the list of priorities in the US-Mexico relationship under Biden?

Question #5: Stability – Latin America has faced sporadic, but massive, waves of protests and national strikes prior to and during the pandemic. Will 2021 be a year of even greater social unrest?

Question #6: Venezuela-EU – Will the European Union (EU) resume conversations with Nicolás Maduro’s regime to monitor Venezuela’s regional elections in 2021?

Chapter #7: Brazil – Will the Biden administration and that of Brazilian President Jair Bolsonaro find ways to cooperate on a climate agenda?

Question #8: Colombia – Will the United States and Colombia reform the underlying premises of their anti-narcotics policies?

Question #9: China and the Caribbean – Will the five Caribbean nations and two Central American countries that still recognize Taiwan shift to recognizing the People’s Republic of China (PRC)?

Question #10: Caribbean – Will the Caribbean Community and Common Market (CARICOM) achieve its goal of a Caribbean Single Market and Economy (CSME) in 2021?

BONUS QUESTION: In the 2016 Summer Olympics in Rio de Janeiro, Brazil (#13), Jamaica (#22), and Cuba (#23) were the only Latin American and Caribbean countries to finish in the top twenty-five in the medal count. Assuming the Olympics are held, will more countries from the region finish in the top twenty-five this summer?

OUR ANSWER TO QUESTION #1: NO

The first case of COVID-19 in Latin America and the Caribbean was reported in Brazil on February 26, 2020. Since then, the region has reported nearly 17.5 million cases and more than 550,000 COVID-19-related deaths, accounting for one third of global deaths. Countries have actively worked to secure vaccines through bilateral and multilateral arrangements, including agreements with Pfizer, Moderna, AstraZeneca, Russia’s Sputnik V, and China’s CoronaVac. Nevertheless, widespread vaccination requires not only adequate planning for vaccine acquisition, but efficient and equitable distribution. Recent incidents in Germany and the United States show that even more resourceful countries are experiencing hiccups in massive vaccine rollouts, such as logistical challenges (especially the required temperature-controlled supply chain), personnel shortages, and vaccine hesitancy. Latin American and Caribbean nations may face these hurdles at a greater scale, due to resource and capacity constraints.

As of January 19, 2021, eleven Latin American and Caribbean countries have authorized emergency use of COVID-19 vaccines: Argentina, Brazil, Bolivia, Chile, Colombia, Costa Rica, Ecuador, El Salvador, Mexico, Panama, and Venezuela. On December 24, 2020, Mexico, Chile, and Costa Rica became the first countries in Latin America to begin mass vaccination. Despite moving quicker than most others in the region, Mexico aims to inoculate only 75 percent of its population by March 2022. For most countries in Latin America and the Caribbean, definitive delivery and mass vaccination timeframes remain unclear, and could be delayed over time.

Some low-income countries in the region may be able to vaccinate, at most, 20 percent of their populations in 2021, a figure considerably lower than the 65-percent theoretical threshold for herd immunity. Of added concern, the COVAX initiative—a key global initiative launched to secure vaccine doses for poor countries—currently faces a $4.9-billion funding gap. This could potentially complicate the initiative’s goal of helping inoculate 20 percent of each low-income country’s population against COVID-19 by the end of 2021. With stark disparities in vaccine access across and within countries, widespread vaccination is a distant prospect for Latin America and the Caribbean in 2021.

OUR ANSWER TO QUESTION #2: YES

In July 2020, a month after Latin America and the Caribbean became the global epicenter of the coronavirus pandemic, Alicia Bárcena, head of the United Nations Economic Commission for Latin America and the Caribbean (ECLAC), cautioned that the region should brace for a “lost decade.” By the end of 2020, the economic contraction in Latin America reached 7.7 percent—its steepest contraction ever, albeit 1.4 percent less than ECLAC’s earlier forecast. Can the region rebound in 2021 and exceed current growth forecasts?

After experiencing its worst economic crisis ever in 2020, the regional economy is expected to grow 3.7 percent in 2021. But, it’s also possible that the region can outpace this forecast, if it can manage a strategic balancing of expanded fiscal support for social-protection programs and small businesses, investment in job-generating productive sectors, and structural reforms to tackle long-standing challenges in the rule of law, equality, productivity, and climate. To accelerate economic reactivation, the region must leverage international investment and cooperation from global institutions such as the World Bank and the International Monetary Fund (IMF), as well as from regional organizations such as the Inter-American Development Bank. The private sector, at the national and international levels, must also play a central role in revamping growth, but will require strong incentives from local governments and risk-mitigated business climates.

Eyes will be on Brazil, Mexico, and Argentina (the region’s three largest economies) as well as Peru, which has had one of the best developing-world growth rates in the past decade, to recover from their 2020 economic downturns. In comparison to these four countries, Chile and Colombia suffered less devastating declines and could be positioned for stable growth over the year, but the migration crisis in Venezuela will continue to pose a heavy burden on neighboring countries’ already-strained public resources.

OUR ANSWER TO QUESTION #3: YES

This year will almost certainly see a surge in Central American migrants and refugees trekking north to the US southern border, due to a unique confluence of the devastation caused by Hurricanes Eta and Iota, as well as the myriad effects of the coronavirus pandemic and other long-standing migration pressures. Days before Biden’s inauguration, a caravan of more than nine thousand Hondurans created international headlines. The caravan was fueled, in part, by the promise of a revamped immigration policy in the United States.

The back-to-back hurricanes—which made landfall in Central America less than two weeks apart—wreaked havoc across Nicaragua and the Northern Triangle (Guatemala, Honduras, and El Salvador), affecting more than five million people and forcing at least 350,000 Hondurans and Guatemalans into emergency shelters. With hundreds of thousands of Central Americans internally displaced, shelters lacking basic services and sanitation quickly became new ground for rapid coronavirus infection. The destruction to essential infrastructure—such as bridges, roads, buildings—and entire communities was a heavy blow to a region that saw a 6.5-percent economic decline in 2020.

Food insecurity in Nicaragua, Guatemala, and Honduras is expected to rise significantly, due to the destruction of large swaths of agricultural lands, livestock, and infrastructure. In a region with long-standing pre-pandemic challenges around rule of law, insecurity, and economic opportunity, the most likely outcome from these push forces is a novel wave of “new” climate refugees seeking better livelihoods in the United States.

In 1998, Hurricane Mitch, the second-deadliest Atlantic hurricane, caused a massive surge in Central American migration to the United States. If history is any indication of the future, Hurricanes Eta and Iota—Category 4 and 5, respectively—can trigger a similar scenario in 2021.

OUR ANSWER TO QUESTION #4: NO

Security cooperation will be an important, though complicated, part of the US-Mexico relationship. In the days leading up to Biden’s inauguration, Mexican President Andrés Manuel López Obrador’s (AMLO) administration decided to stop investigations into former Mexican Secretary of National Defense General Salvador Cienfuegos—who was arrested in Los Angeles at the end of last year, and then sent for prosecution to Mexico. AMLO then released more than seven hundred pages of confidential evidence and intelligence, prompting an unusual rebuke by the US Department of Justice. The General Cienfuegos saga is just the latest example of a strained US-Mexico security relationship.

The Mexican Congress passed a new law in December 2020 that limits and deters the work of foreign enforcement agents in Mexico. Under the law, all communications—at all levels—with foreign enforcement agents will need to be reported, meetings with foreign agents must be approved in advance, and senior federal officials will need to be present at said meetings. Failure to do any of the above may result in expulsion of foreign agents. The law has prompted serious concerns that international cooperation with Mexico on the security front will be henceforth paralyzed. Most of the intelligence on criminal groups and illicit activities comes the United States.

AMLO has sought to double down on addressing the root socioeconomic causes of crime, and has moved away from the drug-kingpin strategy of past administrations. These actions also reflect a desire to move away from a “war” with cartels and other powerful criminal organizations in Mexico. But, security cooperation goes beyond reduction of homicides and combating drug trafficking—a stable security climate is a requisite for business and commerce to thrive. The Biden administration will have to navigate this complex scenario in Mexico.

OUR ANSWER TO QUESTION #5: YES

Protests in Bolivia, Chile, Colombia, Ecuador, Peru, and Haiti that began in 2019 were expected to continue into 2020, but extended lockdowns to control the spread of the pandemic led to the suspension of protests in the first half of 2020. Despite the lockdowns and the inherent risk of public gatherings, citizens gathered in large numbers last fall in Argentina, Chile, Colombia, Costa Rica, Guatemala, and Peru for reasons ranging from a rejection of government austerity plans to calls for racial equality, better social and economic protections, increased transparency, and free elections.

As vaccines become available and social activities resume, protests will most likely resume in 2021 as citizens will air new grievances. The pandemic has increased inequality in the region, pushing an additional forty-five million people below the poverty line. As governments struggle to fund social-protection programs, discontent with ruling governments will rise. Costa Rica will likely see protests as President Carlos Alvarado Quesada’s administration resumes negotiations with the IMF to secure a much-needed loan. In 2020, the Costa Rican government quickly retracted proposed tax measures after protestors blocked major roads. Colombia may also continue to see protests as long as marginalized groups, including Colombia’s indigenous and Afro-Caribbean groups, feel the government has failed to address their demands.

Finally, as Nicaragua heads toward an election in November in which the opposition will be unable to run, protestors against Nicaraguan President Daniel Ortega’s regime should be expected to return to the streets. Protests may also gain momentum in Chile, Ecuador, Honduras, and Peru, as they also head toward elections.

OUR ANSWER TO QUESTION #6: YES

The EU will continue to promote a democratic transition in Venezuela. In September 2020, a European mission was sent to Venezuela in a failed attempt to promote minimum democratic conditions ahead of legislative elections. High Representative of the EU for Foreign Affairs and Security Policy Josep Borrell, who announced the EU’s rejection of Venezuelan election results, asked Maduro to “chart a path towards national reconciliation.” Borrell also reiterated the EU’s commitment to supporting Venezuela’s transition to democracy.

In 2021, municipal and regional elections are set to occur according to the Venezuelan Constitution. This will open a new opportunity for the EU and a multilateral coalition to continue engaging in close dialogue with the Maduro regime, the opposition, academia, non-governmental organizations, and other civil organizations to seek to promote conditions that allow for the participation of all political parties in a competitive electoral process. However, conversations aside, the Maduro regime is unlikely to see any upside in allowing elections that are transparent or fair.

OUR ANSWER TO QUESTION #7: MAYBE

In past years, the synergy between the United States and Brazil has led to the signing of the Alcântara Technological Safeguards Agreement, advancing scientific and technological cooperation; support from the United States for Brazil to join the Organisation for Economic Co-operation and Development (OECD); and, at the end of 2020, the signing of a protocol to facilitate trade and investment between the two largest economies in the Western Hemisphere. Despite some diverging views at the presidential level, stronger bilateral relations between Brazil and the United States are mutually beneficial, and opportunities could still exist for advancing on a common agenda.

Brazil has been criticized for recurrent fires in the Amazon rainforest and Pantanal wetlands, environmental disasters such as the Brumadinho dam collapse, and high levels of deforestation, heightening pressures on the Brazilian government to take action to protect its environment.

For Bolsonaro, the economy and structural reforms are top priorities. The government has pursued trade agreements with the EU, South Korea, and Canada, as well as the United States. However, with increasing pressure from the EU, and now the United States, failing to advocate for strong democratic principles and a concrete plan for sustainable development can isolate Brazil in the global arena, undermining possibilities for cooperation with the United States and other countries. To advance on the trade and investment fronts, which are priorities for the Bolsonaro administration, Brazil will need to double down on its efforts to reconstruct its image and role abroad, particularly regarding the climate agenda.

OUR ANSWER TO QUESTION #8: YES

In December 2020, the Congressional Western Hemisphere Drug Policy Commission (WHDPC) unveiled a bipartisan report recommending that the United States rethink many of its historical anti-narcotics policies. The report found that while Colombia has made remarkable progress in strengthening state authority in marginalized areas, the United States’ $11.6-billion Plan Colombia was unsuccessful in meaningfully curbing coca cultivation. Despite having significantly increased manual eradication efforts in Colombia, coca cultivation and cocaine production remain high; it is unlikely the current strategy will allow the United States and Colombia to reach their joint objective of decreasing coca cultivation and cocaine production to half of 2017 levels. As discussed in the report “The Untapped Potential of the US-Colombia Partnership,’’ the United States and Colombia must take measures to reduce coca cultivation and also target other stages of the drug market, including cocaine production, trafficking, and consumption.

Entering office with a profound understanding of the Americas and a track record of advancing policies fundamental to the region’s prosperity, Biden will prioritize strengthening the United States’ ties to the region—particularly the US-Colombia partnership, which he has referred to as the keystone of US foreign policy in the region. In light of the WHDPC report, the new administration has new thinking on how to reorient the US counter-narcotics policy in Colombia away from mass eradication and toward a more holistic approach, placing renewed emphasis on providing physical and economic security to rural Colombians and demobilized rebels. There is also new momentum for the United States to develop a whole-of-government strategy to counter transnational criminal organizations (TCOs) and the international drug trade, per the report’s recommendations.

OUR ANSWER TO QUESTION #9: NO

It is unlikely that all five Caribbean countries that currently recognize Taiwan—Belize, Haiti, St. Kitts and Nevis, St. Lucia, and St. Vincent and the Grenadines—will instead recognize the PRC in 2021. However, the Dominican Republic’s switch to establish diplomatic ties with the PRC in 2018 puts significant pressure on Haiti, with whom it shares the island of Hispaniola. In its overtures to Haiti, the PRC recognizes the country’s extreme poverty and holds out a promise of building the kind of capacity that allowed China to lift 850 million of its citizens out of extreme poverty, but only if Haiti recognizes the “One-China” policy. The other Caribbean countries have long, and sometimes ethno-cultural, histories with Taiwan, which has been a loyal and generous partner. Nevertheless, the geopolitics playing out between Washington and Beijing will put pressure on these small island nations to choose—not necessarily in their own developmental interests, but in the interest of alignment with one great power.

For Guatemala, Honduras, and Nicaragua—the three Central American countries that still recognize Taiwan—pressing domestic issues around the pandemic, natural disasters, citizen and food insecurity, and the economic downturn will prevail over the diplomatic issue of recognition. In addition, the new administration in the United States will move away from a bilateral and mostly stick approach to the isthmus, and toward a more regional and balanced carrot-and-stick approach, in which the question of China can be a powerful bargaining chip. A ramping up of conditionality on foreign aid and support to the region from the United States can be highly persuasive, and can discourage Central American leaders from switching sides.

Caribbean and Central American recognition of China versus Taiwan also hinges on the intensity of Chinese outreach efforts. This, in turn, is often dictated by the state of play in cross-strait relations between China and Taiwan. Since 2016, Taiwan under Tsai Ing-wen’s leadership—in alignment with former US President Donald Trump’s administration—has shifted to a more explicitly competitive stance vis-à-vis Beijing. As cross-strait relations soured, both sides became more aggressive in maintaining or courting new diplomatic allies (e.g., the Dominican Republic, El Salvador, and Panama). In this context, China will likely continue its soft-power diplomacy in the region. The PRC’s staunch verbal support for multilateralism also has the potential to tilt more Caribbean countries toward its orbit. However, much of this could change in the next four years, contingent upon new dynamics in the US-China-Taiwan triangle, as well as Biden’s promised return to global, non-transactional cooperation and a renewed focus on the Americas.

OUR ANSWER TO QUESTION #10: NO

Although the CARICOM has operationalized the single market, the prospect of a single economy remains unlikely. A little history will help. CARIFTA was formed in 1965, shortly after anglophone Caribbean countries achieved independence. CARIFTA removed tariffs and other non-tariff barriers to regional trade. CARICOM was formed in 1973 to implement the Treaty of Chaguaramas, which replaced the free-trade area with a single market. The intended free movement of people, goods, and capital is still not a reality because there is not a “regional body with powers and accountability that can help transform community decisions to binding laws in individual jurisdictions is a key impediment,” according to a 2020 report from the IMF.

In 1989, the CARICOM heads decided that further economic integration was required in an era of globalization. The Treaty of Chaguaramas was revised in 2001 to accelerate the implementation of the CSME, which started in 2006. The 2008 global financial crisis further delayed what former Managing Director of the London-based Caribbean Council David Jessop called “a process plagued by rhetoric and inaction.”

COVID-19, however, may have done what neither of the two best-known analyses of the Caribbean’s challenges, the Golding Report and the Ramphal Commission, could: show the fragmented Caribbean nations the real benefits of integrated, unified coordination when faced with externalities. As she relinquished the CARICOM chair In June 2020, Barbadian Prime Minister Mia Mottley praised the regional architecture for its sterling performance in organizing and supporting the region during the pandemic.

Current Chairman of CARICOM and Prime Minister of Trinidad and Tobago Keith Rowley called for 2021 to be “the year of CARICOM,” and challenged the region to live up to its promise: “Let this be the year that we make CARICOM work for us and construct the resilient society that will provide a safe, prosperous and viable community for all of us.” He boldly called for the CSME to become the principal framework for recovery. Despite the real obstacle of establishing a single currency and its attendant institutions, CSME got a shot of energy from the COVID-19 crisis.

Scowcroft Center for Strategy and Security Transatlantic Security Initiative

BONUS QUESTION ANSWER

Assume the Olympics occur this summer. Several factors contribute to a country’s medal-count prospects—population size, the promotion of women in sports, national investment in sports, etc. While no single factor explains a country’s success or failure, decisions and investments made by Latin American nations over the past four years could be an indication of a strong Olympic showing.

Brazil has made the strategic decision not to prioritize one sport, and has instead sought to be in the competition for as many Olympic slots as possible, securing one hundred and eighty so far. Cuba, in comparison, has focused on boxing and baseball to achieve its Olympic medal goals. Mexico’s Olympic team is also looking promising, with a fairly gender-balanced team (forty-nine men and thirty-seven women). AMLO also announced a financial stimulus for athletes who participated in the 2019 Pan American Games and are now preparing for Tokyo 2020+1 amid the COVID-19 pandemic. Jamaica is also investing in its Olympic athletes, despite the economic constraints of the pandemic, providing $40 million in funding for its athletes’ preparation and qualification.

With all eyes hopefully on the Summer Olympics, the authors predict that countries that provided the most comprehensive support to their athletes during the pandemic will come out on top in the upcoming games.

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Seek membership for Mexico: NATO 20/2020 podcast

Christopher Skaluba, Gabriela R. A. Doyle — Tue, 15 Dec 2020 14:36:43 +0000

Mexico’s membership in NATO may be the key to keeping a rapidly changing America invested in European security.

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About this episode

Eventual Mexican membership in NATO may be a necessary ingredient for keeping the United States invested in European security over the long term. This suggestion is made with an eye toward the reality that economic and political power in the United States is shifting to places and populations with fewer traditional ties to Europe such that broadening NATO’s appeal to a diversifying US public is imperative.

Watch the video

Key takeaways

1:59: Chris talks about how support for NATO is eroding in the United States and why NATO needs to address that quickly
4:36: Chris shares why he thinks that it is important for the United States to support NATO
7:44: Chris and Gabriela talk about some of the benefits that Mexico’s membership could bring to NATO
17:54: Chris and Gabriela explain why NATO could choose to make Mexico a member first and not other countries in hot spots like Georgia and Ukraine
22:34: Chris and Gabriela discuss the advantages in Mexico’s large number of active duty personnel and their capabilities
25:47: Chris talks about the generational nature of the idea
27:49: Chris and Gabriela talk about how increasing diversity in the US population parallels the need for diversifying US public support for NATO
34:29: Gabriela talks about the case from Mexico City’s point of view and what it stands to gain

Read the essay

NATO 20/2020

Oct 14, 2020

Seek membership for Mexico

By Christopher Skaluba, Gabriela R. A. Doyle

Building a relationship between NATO and Mexico may be the key to keeping a rapidly changing America invested in European security.

Europe & Eurasia Mexico

Explore the podcast series

NATO 20/2020 Podcast

NATO 20/2020 is a weekly podcast that explores 20 bold ideas to push NATO to be more visionary, more capable, and more self-evidently valuable to the security of more people.

NATO 20/2020 Oct 14, 2020

Modernize the kit and the message

By H.E. Dame Karen Pierce DCMG

NATO will only remain successful over the next seventy years if it modernizes its capabilities, takes command of emerging technology, and harmonizes its strategic messaging.

Defense Policy Defense Technologies

NATO 20/2020 Oct 14, 2020

Put NATO back in the narrative

By Bridget Corna and Livia Godaert

NATO can recapture the imagination of allied publics by telling its own story better and in new ways to new audiences.

Europe & Eurasia Media

NATO 20/2020 Oct 14, 2020

Reimagine the Washington Treaty

By Damon Wilson and Will O’Brien

Reexamining NATO’s founding charter can be an exercise in creating an Alliance fit for a new geopolitical era.

Economy & Business Europe & Eurasia

Former staff

Christopher Skaluba

Former Director

NATO Security & Defense

Fellow

Gabriela R. A. Doyle

Nonresident Fellow

Scowcroft Center for Strategy and Security Transatlantic Security Initiative

NATO Security & Defense

Manuel Padrón-Castillo

The post Seek membership for Mexico: NATO 20/2020 podcast appeared first on Atlantic Council.

Spotlight: The Biden-Harris Administration and the future of supply chains in the Americas

Tue, 08 Dec 2020 22:20:53 +0000

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The month of November 2020 marked a turning point for the United States as voters cast their ballots at rates not recently seen in a US election. The historic race saw around 65 percent of the voting population in the United States participating, the highest in more than one hundred years. With three hundred and six Electoral College votes in their favor, former US Vice President Joseph R. Biden and California Senator Kamala Harris will become the next president and vice president of the United States.

The atmosphere of uncertainty that characterized the 2020 US election was consistent with the rampant uncertainty that has plagued 2020 as a whole. The global COVID-19 pandemic, which has taken the world by storm, has disrupted lives, upended economies, and destabilized supply chains.

This disruption was profoundly felt in the Western Hemisphere, where suppliers in the Americas were forced to adapt sourcing and inventory strategies as suppliers in Asia and other regions shut down operations, where companies faced shortages and interruptions, and where costs soared as necessary raw materials became harder to source. Even as grocery-store shelves quickly emptied, food and basic necessities became scarce for many, and personal protective equipment (PPE) went on back order, the world stepped up to diversify sourcing and manufacturing locations, setting the stage for the modernization and increased resilience of supply chains in the coming years.

Supply remains crucial as governments, businesses, and individuals brace for a second wave of shutdowns and prepare to bounce back post-pandemic. A key priority for the next US administration will be working alongside partners and allies in the Western Hemisphere to assure supply-chain resilience is achieved and prioritized.

President-Elect Joe Biden has pledged to build broad-based supply-chain resilience and to work collaboratively with the private sector to improve productivity and avoid unnecessary costs and bureaucracy.¹ Snap polls of businesses show they are counting on the next US administration to deliver on this promise.² As the inauguration of the forty-sixth president of the United States approaches, the question becomes: how can cooperation across the Americas, under a Biden administration, impact the future of supply chains in the Americas?

In this Spotlight, seventeen authors from various countries, regions, and industries, representing the public and private sectors, tackle various opportunities in five key questions.

Question 1

Given what is known about the incoming Biden-Harris administration, what might be the US role in advancing the development of greater commercial integration in the Western Hemisphere?

Question 2

In what ways might the next US administration advance policies that allow for supply chains in the Western Hemisphere to withstand major disruptions/shocks similar to COVID-19?

Question 3

What actions can North American and Latin American countries take to utilize new technologies in order to facilitate the modernization and innovation of supply chains as global economies are poised to fundamentally shift post-COVID-19?

Question 4

How can supply chains be used to strengthen efforts to meet environmental, social, and governance (ESG) goals in the Americas—the main pillars that measure sustainability and societal impact of the private sector—and how might the new administration’s policies impact these goals?

Question 5

How can lessons from other regions in deepening regional supply-chain integration be applied to the Americas, especially with an eye toward leapfrogging economic development in the region?

Question one

Given what is known about the incoming Biden-Harris administration, what might be the US role in advancing the development of greater commercial integration in the Western Hemisphere?

Manuel Padrón-Castillo

Partner, International Commercial and Trade Group
Baker McKenzie (Mexico City)

On the factors that will shape a US approach to integration

The United States’ role in advancing the development of greater commercial integration in the Americas will be both strategic and central to its success. But, while it may be intuitive that the United States should move toward greater integration for greater prosperity, the pace of that continued integration will be subject to a variety of internal and external factors over the coming years.

COVID-19 will be a key factor in US trade policy for the Biden administration. The coronavirus has devastated the US economy. Quicker adaptation to new conditions going into 2021 will be essential to bringing back economic growth, and the pandemic’s effects are not exclusive to the US economy; many Latin American countries have seen similar, or worse, consequences. Recovery of the US economy would bring an expectation south of the Rio Grande that a renewed partnership with the United States may alleviate the burdens on the broader regional economy.

Recovery of the US economy would bring an expectation south of the Rio Grande that a renewed partnership with the United States may alleviate the burdens on the broader regional economy.

Manuel Padrón-Castillo

The pandemic will not be the only factor to influence the future of economic and commercial policy in the United States. Even prior to the emergence of COVID-19, the trends in globalization that were prominent over the second part of the past century and the beginning of this new one encountered resistance from protectionism and nationalistic views. It was under these conditions that the US-Mexico-Canada Agreement (USMCA) was negotiated and enacted. For the future of commercial integration, the USMCA shows multilateralism still has a place in the commercial agenda. This is a positive sign for broader, deeper, and further integration.

The Panama Canal

A good indicator of a successful approach to further integration under USMCA is the automotive industry. The increased degree of regional value content (RVC) for vehicles and some auto parts to enjoy free trade, demands that producers provide a comprehensive review of their respective supply chains. In six years, when the window to review the treaty comes up, it will have to be determined if the higher RVC resulted in growth in trade and investment, or if consumers ended up carrying the burden of more expensive vehicles.

Finally, the steady and significant increase of Chinese investment in the hemisphere, particularly in Latin America, suggests that US commercial interests will find stronger competition. Overlooking or minimizing this reality may be detrimental for US economic presence in the region.

Maurice Bellan

Managing Partner, Washington, DC;
Member, Global Dispute Resolution and North America Litigation and Government Enforcement Steering Committees
Baker McKenzie (Washington, DC)

On US leadership in support of regional stabilization and recovery

As the next president of the United States prepares to enter office, I am comforted by the following words: We the people of the United States in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish the Constitution of the United States of America.

The first priority of the president of the United States is to uphold and to honor the US Constitution. In a globally-connected world, the intersectionality of communities and economies test the ability of the US president to provide for the common defense and promote the general welfare of the citizens of the United States. To achieve the economic security that is inherently implied in these venerable clauses of the US Constitution, the president must be mindful that the success of US strategy is inextricably linked to that of its regional neighbors in the Caribbean, Canada, and Central and South America.

To achieve the economic security that is inherently implied in these venerable clauses of the US Constitution, the president must be mindful that the success of US strategy is inextricably linked to that of its regional neighbors in the Caribbean, Canada, and Central and South America.

Maurice Bellan

President Donald Trump’s “America First” foreign policy approach has had the effect—whether intended or not—of placing the United States in a precarious security position with its neighbors in the Western Hemisphere. The Trump administration’s border-enforcement strategy—which appears to have been the depth of its foreign policy agenda—has not proven to be an effective means of engagement, and has not resulted in enhanced security for the United States.

Bilateral discussion and economic development that addresses the root causes of flight from one nation to another is a strategy one can expect a Biden administration to employ. This approach will not only begin to mend a damaged US leadership profile, but will attempt to create a stronger economic profile for the Western Hemisphere—not just for the United States.

For the next US president, helping to stabilize the region must be a top priority. Over the last four years, the lack of US presence and leadership in the region has resulted in increased influence by China and Russia in several Central and South American and Caribbean countries. A Biden administration would prioritize mending the polarization that has occurred, and pull southern allies together to forge a comprehensive and mutually beneficial economic-integration plan. Biden’s experience as the point person for Latin America during the Barack Obama administration will prove helpful for assembling allies and friends and beginning to repair alliances.

Ildefonso Guajardo

Former Secretary of Economy, Mexico
Member, Adrienne Arsht Latin America Center Advisory Council
Atlantic Council

And

Juan Carlos Baker

CEO & Founding Partner, Ansley Consultores
Former Undersecretary of Foreign Trade, Mexico

On the framework of USMCA as a guiding principle for further integration

In today’s context of global economic downturn, the emerging economies in Latin America and the Caribbean need a reliable partner in order to turn the corner and minimize the risk of a “lost decade.” The Biden administration’s “Build Back Better” approach focuses on bringing manufacturing and production back to the Americas, including through nearshoring and reshoring, and could offer unprecedented opportunities for the region.

Trucks wait in a queue for border customs control, to cross into the U.S., at the Zaragoza-Ysleta border crossing bridge as the outbreak of the coronavirus disease (COVID-19) continues, in Ciudad Juarez, Mexico April 30, 2020. REUTERS/Jose Luis Gonzalez

However, a first step for the next US administration will be to kickstart the United States’ own economic recovery, and to do so in partnership with the private sector. This way, the country can counter China’s commercial influence and viably become the reliable partner the region needs to further commercial integration in the hemisphere.

The USMCA offers an ideal framework. Although the pandemic has complicated the implementation and enforcement of the USMCA in Mexico, the agreement’s updated provisions on labor, environment, digital trade, and small and medium enterprises—to name a few—bolster North America’s competitive edge, with unprecedented potential for forward and backward linkages.

Although the pandemic has complicated the implementation and enforcement of the USMCA in Mexico, the agreement’s updated provisions on labor, environment, digital trade, and small and medium enterprises—to name a few—bolster North America’s competitive edge, with unprecedented potential for forward and backward linkages.

Ildefonso Guajardo & Juan Carlos Baker

Moreover, in addition to Mexico, there are other countries in the region that could also potentially host these new global value chains coming from Asia. Colombia and Peru, which also have free-trade agreements with the United States—albeit not as ambitious and modern as the USMCA, nor as sophisticated in their manufacturing and exporting bases as Mexico—could also be attractive markets for companies seeking to have access to the US market and be geographically closer. Having said that, it is important to assess other elements of the business environment: the rule of law, protection of intellectual property, and tax and fiscal issues.

Lisa Schroeter

Global Director of Trade and Investment Policy
Dow

On the role of the private sector in driving integration

At a time when the world is struggling to recover from the devastating impacts of COVID-19, to restore economic growth, and to create high-quality jobs, there has never been a better moment for the United States to energize Western Hemispheric integration, building on the innovative contributions of the US private sector.

Ultimately, companies are already drivers of integration. They invest in each other’s countries, source customers over borders, and, more importantly, engage strategically to share innovation and to partner on supporting customers to deliver new, more sustainable products to market.

Kiva robots move inventory at an Amazon fulfilment center in Tracy, California December 1, 2014. Amazon.com Inc has installed more than 15,000 robots across 10 U.S. warehouses, a move that promises to cut operating costs by one-fifth and get packages out the door more quickly in the run-up to Christmas. REUTERS/Noah Berger (UNITED STATES – Tags: SCIENCE TECHNOLOGY BUSINESS)

In 2021, the public and private sectors can align to support an integrated policy agenda that enables growth, including through: regulatory cooperation, as the United States has demonstrated tangible impacts of regulatory reform, streamlining and making procedures more efficient based on sound science and risk assessment principles so that companies large and small can operate efficiently and with certainty; trade facilitation, as COVID demonstrates the essential value of timely products to market, and supply chains need efficient and clear procedures, leveraging technology so that materials get to markets, especially critical inputs that support domestic manufacturing and highly skilled workers; and sustainability, as one of the greatest areas of opportunity is to share the common goal of better environmental performance in order to support better, more resource-efficient manufacturing, combat climate change, and introduce fit-to-purpose products on the market. Sustainability means both better environmental and economic performance. A common effort to reduce barriers—tariff, non-tariff, regulatory—will enable access and investment in these technologies that can contribute to a more sustainable planet, and can better all communities.

In 2021, the public and private sectors can align to support an integrated policy agenda that enables growth.

Lisa Schroeter

Integration across the Western Hemisphere already happens across supply chains, between customers and people to people. Twenty twenty-one offers the opportunity to build on these strong alliances, with a focused agenda and a common effort to share best practices and build capacity for a more integrated, and better performing, Western Hemisphere market.

Question two

In what ways might the next US administration advance policies that allow for supply chains in the Western Hemisphere to withstand major disruptions/shocks similar to COVID-19?

Jason Marczak

Director, Adrienne Arsht Latin America Center
Atlantic Council

On harmonization of supply chains in the Western Hemisphere

With more free-trade partners than anywhere else in the world, incredible human capital, and geographic proximity, Latin America offers a promising platform to expand US commercial ties in order to generate jobs in the United States and in the region. This can be achieved while helping the region to rebuild in a way that creates sustainable economic development and sets a trajectory for leapfrogging longstanding economic-development challenges.

As global supply chains are reconfigured, the Western Hemisphere should benefit from nearshoring trends, where businesses will find similar time zones, ties to the sixty-million-plus US Latinos, and proximity to domestic and regional markets. Mexico, Colombia, and Central America, in particular, are in a unique position to potentially take advantage of this opportunity—all are free-trade partners with supply chains that, to varying degrees, are already integrated with those of the United States.

The incoming Biden-Harris administration has an opportunity to translate “Build Back Better” into a hemispheric growth plan that helps the region rebuild from COVID-19, while, at home, creating jobs and new economic opportunities. While many tools can be deployed to accelerate regional recovery, the creation of stronger and more resilient supply chains should be near the top of the list.

The incoming Biden-Harris administration has an opportunity to translate “Build Back Better” into a hemispheric growth plan that helps the region rebuild from COVID-19, while, at home, creating jobs and new economic opportunities.

Jason Marczak

Three ways exist to make supply chains stronger and more resilient. First, existing trade agreements should be analyzed to ensure that implementation is, in fact, taking advantage of the free flow of commerce intended in the original agreement. If technical barriers are found to be impeding commerce, they should be rapidly addressed. Second, the spaghetti web of Western Hemisphere agreements can be better utilized, with more efficient harmonization that facilitates greater intra-regional and US trade.

Ships docked at the Guanabara Bay are pictured with the Sugar Loaf mountain in the background in the state of Rio de Janeiro, November 19, 2014. REUTERS/Pilar Olivares (BRAZIL – Tags: MARITIME SOCIETY)

Third, and crucially, the United States should engage in consultations and create formal institutional mechanisms to ensure a common agreement among essential industries in the case of another major disruption. Earlier this spring, a US-Mexico dispute on essential industries reverberated across supply chains and industries. Here, an important starting point for the Biden-Harris administration is to update the 2012 North American Plan for Animal and Pandemic Influenza (NAPAPI) to include a new chapter focused on the protection of supply chains, especially in light of the new United States-Mexico-Canada Agreement (USMCA). An updated NAPAPI should include even clearer procedures and concrete coordination steps to be taken in the face of future health-generated shocks.

Finally, stronger and more efficient supply chains cannot be built without greater investment in both physical and digital infrastructure. Through a Development Finance Corporation with an expanded remit in the type of bankable projects, the United States can better support private-sector efforts to upgrade critical infrastructure—roads, rail, deep-water ports—but also expand broadband and Internet connectivity across the region. In the next administration, the United States will have an historic opportunity to significantly deepen and strengthen supply chains in order to position the United States as the partner of choice for the region’s post-COVID recovery.

Christina Conlin

Partner, International Commercial Practice Group
Baker McKenzie (Chicago)

On tax, trade, and labor policy certainty to strengthen supply-chain resilience

Businesses need certainty. This year has provided anything but that, with challenges and instability due to COVID-19, extreme climate events, and civil protests and disruption in the United States. Supply-chain stability and resilience can be enhanced by the US administration providing quick, clear guidance on its intended tax, labor, and trade policies to support diversification of the supply chain.

The disruption from COVID-19 has placed a new emphasis on companies’ strategies for reshoring, nearshoring, or multi-jurisdictional diversification of suppliers. COVID-19 laid bare the need to diversify all tiers of suppliers to more than one location or region. Tax, trade, and labor policy certainty is needed across industries, though there will be a necessary focus on healthcare and PPE in the immediate future.

COVID-19 laid bare the need to diversify all tiers of suppliers to more than one location or region. Tax, trade, and labor policy certainty is needed across industries, though there will be a necessary focus on healthcare and PPE in the immediate future.

Christina Conlin

While company leaders may not appreciate, nor agree with, all or some of the administration’s policies, they will nonetheless appreciate knowing toward which direction they need to pivot, and how these policies will impact their companies’ supply-chain investment and strategy. Regulatory alignment with key trading partners would also bolster stability by reducing legal and operational challenges across markets. With an early indication of intended policies, businesses can promptly evaluate their investments, commercial contracts, and overall supply chain strategy.

Conversely, the administration’s failure to provide concrete direction quickly may cause companies to withhold investments or forgo needed structural changes, increasing the risks to stability, employment, and economic growth.

COVID-19 exposed supply-chain weaknesses, but supply-chain diversification is necessary to prevent future shocks beyond COVID-19. Companies need to make decisions faster than ever, amid more uncertainty than ever. Clear policy direction from the incoming Biden administration would remove one barrier to resilience.

Kerry Contini

Partner, International Commercial Practice Group
Baker McKenzie (Washington, DC)

On export/import measures to avoid major disruptions

To better withstand major shocks, the incoming Biden administration should consider using export/import measures at the border as a way to keep supply chains close to home and avoid major disruptions. In particular, the Biden-Harris administration might be tempted to repurpose the “carrot” and “stick” import and export measures that were used to address the infamous shortages in PPE during the pandemic. Those measures were intended to encourage imports of the needed products (the “carrot”) while making exports more difficult (the “stick”). On the import side, US measures primarily focused on relaxing product regulatory requirements to make it easier to get the needed products into the US market. On the export side, during the early days of the pandemic, the United States dusted off long-neglected provisions of the Defense Production Act to try to minimize exports of products needed domestically to satisfy the massively increased demand.

To better withstand major shocks, the incoming Biden administration should consider using export/import measures at the border as a way to keep supply chains close to home and avoid major disruptions. In particular, the Biden-Harris administration might be tempted to repurpose the “carrot” and “stick” import and export measures that were used to address the infamous shortages in PPE during the pandemic.

Kerry Contini

Restricting exports is unlikely to become the administration’s go-to tool to address supply-chain disruptions, as this was a controversial approach with questionable results. It is more likely that it would consider addressing mismatches in supply and demand through measures affecting imports (e.g., relaxing product regulatory requirements, expediting customs clearance and inspection procedures, or temporarily suspending import or other duties/fees). Ultimately, the nature and duration of the disruption and the type of supply chain will help to determine the appropriate tool.

In the longer term, it’s worth keeping an eye on the impact of the administration’s continued implementation of export controls on emerging and foundational technologies, which are mandated by the Export Control Reform Act of 2018. The stated objective of these export controls is to advance US national security interests, not supply-chain resilience. However, additional restrictions on the export of US technologies to China and other countries could, somewhat paradoxically, contribute to nearshoring as companies adjust their supply chains to avoid countries subject to these export controls.

Question three

What actions can North American and Latin American countries take to utilize new technologies in order to facilitate the modernization and innovation of supply chains as global economies are poised to fundamentally shift post-COVID-19?

Shunko Rojas

Co-Founder and Partner, Quipu Advisors
Former Undersecretary for International Trade
Argentina

On the importance of digital connectivity, regulatory frameworks, productive processes, and labor-force training for harnessing technology

To maximize the benefits of new technologies in the strengthening and upgrading of regional supply chains in a post-COVID-19 context, the region needs to focus on four key areas: digital connectivity infrastructure, regulatory frameworks, productive processes, and labor force.

Digital connectivity infrastructure: Dynamic, dense, and efficient value chains require a modern and reliable digital-connectivity infrastructure to enable greater capacity, speed, and affordability of digital data processing and transmission. Countries need to invest in digital infrastructure while ensuring quality services and universal access at affordable costs.

A Maersk ship and containers are seen at the Port of Santos, Brazil September 23, 2019. Picture taken September 23, 2019. REUTERS/Amanda Perobelli

Regulatory frameworks: Countries in the Western Hemisphere need to adopt robust, flexible, and conducive regulatory frameworks to catalyze the benefits of new technologies. In particular, countries have to adopt sound regulations on cybersecurity, data privacy, interoperability, and competition. In addition, the region needs to work on regulatory cooperation to set up common standards, and to ensure that data and technology innovations flow freely and safely across the Americas.

Productive processes: Governments and the private sector need to work closely together to better incorporate digital technologies into processes and services to increase productivity, keep up with global technology advances, and adapt effectively to disruptive innovations. Governments should concentrate their efforts on supporting small and mid-size enterprises (SMEs), women, and other disadvantaged groups and their integration into supply chains.

Labor force: Governments must also invest in human capital, and adopt vigorous policies aimed at preparing the workforce to fully grasp the benefits of digital technologies and supporting workers in transition. Digital-skills development through training assistance and education programs can play a key role in ensuring a more even distribution of gains from trade and technology advances, which would ultimately result in more stability and prosperity in the region.

To maximize the benefits of new technologies in the strengthening and upgrading of regional supply chains in a post-COVID-19 context, the region needs to focus on four key areas: digital connectivity infrastructure, regulatory frameworks, productive processes, and labor force.

Shunko Rojas

The 2021 Summit of the Americas will provide a unique opportunity for political leaders to work on a common agenda to address these issues and set the grounds for building a prosperous post-COVID-19 Western Hemisphere based on a digitally driven and more inclusive integration.

Carlos Alberto Vela-Treviño

Partner, Information Technology and Communications Practice Group (Mexico City)
Baker McKenzie (Mexico City)

On the importance of digital transformation as a priority for companies and governments

Digital transformation powered by companies, together with innovative nearshoring regimes facilitated by Latin American governments, should be the key enablers for Latin America becoming an innovative and flexible manufacturing powerhouse, one that allows North American companies to operate in an agile, secure, and nimble environment.

Modern treaties like the USMCA and the Pacific Alliance Treaty might be key enablers for bringing relief to US and Latin American global supply chains hammered by COVID-19 and US-China trade wars. Countries with free-trade agreements in place, free movement of information and personal data, strong privacy and cybersecurity regimes, flexible labor and immigration regimes, and solid anticorruption and intellectual property enforcement laws should score high as nearshoring options. However, to truly compete with the offering of East Asia (which combines skilled workforces with low costs), Latin American governments should be willing to invest in automation technology, artificial intelligence, and robotics, as a means to improve industrial productivity. Nearshoring arrangements of the future should include more than traditional tax benefits; they should also include stimulus for investment in digital transformation, research, and development.

Nearshoring arrangements of the future should include more than traditional tax benefits; they should also include stimulus for investment in digital transformation, research, and development.

Carlos Alberto Vela-Treviño

The creation of sophisticated workforces (rather than the creation of jobs) should become the priority for companies and governments. Digital transformation does not rely on regulatory change or government stimulus in order to produce innovative results. Rather, it is fundamentally about process transformation, about changing how the different stakeholders in a productive chain behave in order to achieve a specific result. Only a skilled workforce would be able to identify opportunities on data, and to test and deploy technology that may enhance productivity, or even fundamentally change the role of a company in the production chain; companies that will succeed are those that cease to see digital as an arm of the company and instead see, and experiment, with digital as the heart of the company.

Joyce Smith

Partner
Lead, Global IP Transactions and Tax Practice
Member, North America International Commercial Practice Group Steering Committee
Baker McKenzie (San Francisco)

On trends from key industries

Countries in the region can consider implementing policies and laws that make it easier for businesses to leverage digital technologies and restructure their supply chains to meet fast-changing realities. Some of the trends that have been seen from advising companies looking to persist through the pandemic and thrive post-pandemic include: significant disruptions to workforces, production capabilities, and logistics that have resulted in the need to resize and find alternative suppliers; a huge uptick in demand for online, digital, and telecommunications services; and a desire to diversify and build flexibility into supply chains given unpredictable developments in political, regulatory, and trade regimes.

For example, in the industrial, manufacturing, and transportation industries, there is a growing emphasis on trying to shorten the supply chain and leveraging digital technologies to create digital factories that make it easier to track inventory.

To help businesses modernize and innovate their supply chains in this environment, countries in the region can seek to bolster their investments in local infrastructure (e.g., expand fifth-generation (5G) capabilities), cooperate with other countries to standardize regulatory requirements (thus alleviating some of the compliance costs associated with engaging in cross-border activities), consider reducing trade barriers where aligned with other national interests, and increase reliance on properly vetted datasets and scientific principles to drive policy decisions.

Joyce Smith

In the consumer goods and retail space, companies have been forced to adopt more flexible business models, including increased reliance on digital platforms and concentrating efforts on key revenue centers.

And, in the technology, media, and telecommunications space, there has been increased demand for services and consolidation of providers—which, in turn, has fostered innovation in sub-industries such as cybersecurity, identity verification, digital marketing, and e-commerce.

To help businesses modernize and innovate their supply chains in this environment, countries in the region can seek to bolster their investments in local infrastructure (e.g., expand fifth-generation (5G) capabilities), cooperate with other countries to standardize regulatory requirements (thus alleviating some of the compliance costs associated with engaging in cross-border activities), consider reducing trade barriers where aligned with other national interests, and increase reliance on properly vetted datasets and scientific principles to drive policy decisions.

A truck driver receives hands sanitiser from a security officer while waiting in a queue for border customs control, to cross into the U.S., at the Zaragoza-Ysleta border crossing bridge as the outbreak of the coronavirus disease (COVID-19) continues, in Ciudad Juarez, Mexico April 30, 2020. REUTERS/Jose Luis Gonzalez

Question four

How can supply chains be used to strengthen efforts to meet environmental, social, and governance (ESG) goals in the Americas—the main pillars that measure sustainability and societal impact of the private sector—and how might the new administration’s policies impact these goals?

Reagan Demas

Partner, Litigation & Government Enforcement Practice Group
Baker McKenzie (Washington, DC)

On the social impact of corporate supply chains

Corporations have great power and ability to influence environmental, social, and governance (ESG) standards around the world. The expansion of corporate supply chains into developing countries increases the impact—both good and bad—of corporate supply chains on ESG standards globally.

The social impact of corporate supply chains (e.g., forced or child labor, human trafficking, worker safety) is under particular scrutiny today. The significant and lasting reputational damage done by allegations of social impropriety and related legal violations within the supply chain is clear and increasing. Yet, corporate reputations are not the only thing at risk—more recently, legal risk has grown significantly with the rise of transparency and reporting obligations, and a move away from previously voluntary standards. These legal risks include statutes imposing responsible sourcing obligations (e.g., 19 U.S.C. § 1307, U.S. Trafficking Victim Protections Act); shareholder litigation based on mandatory corporate public disclosures related to responsible sourcing; litigation by suppliers’ workers based on employment, contract, or tort laws; and consumer litigation based on public statements or commitments related to responsible sourcing. Stakeholders’ expectations (including customers, investors, and civil society) of global companies to address ESG issues in supply chains has never been greater, with legal obligations holding companies responsible for the bad acts of supply-chain partners following suit.

Corporations have great power and ability to influence environmental, social, and governance (ESG) standards around the world. The expansion of corporate supply chains into developing countries increases the impact—both good and bad—of corporate supply chains on ESG standards globally.

Reagan Demas

Many ESG issues in supply chains—in particular, social matters like human trafficking—are bipartisan issues in the US Congress, and the growing volume of corporate regulations touching on those issues is indicative of this bipartisan support. The clear trajectory for future congresses and administrations is toward increased regulation over supply-chain ESG matters and the continued expansion of legal obligations on corporations. As a result, corporations are likely to continue focusing on auditing and managing supply-chain partners to ensure ESG matters are appropriately addressed, and the risk of violations is mitigated.

Jennifer Trock

Partner
Chair, North America International Commercial Practice Group and Global Aviation Group
Baker McKenzie (Washington, DC)

On how sustainability can foster recovery and competitive advantages

Supply chains are increasingly complex, creating both challenges and opportunities to integrate ESG goals. As global “shock” events—whether in the form of global trade wars, natural disasters, or pandemics—become more common, companies must look for long-term solutions to future-proof supply chains with more resilient and sustainable approaches.

For example, one of the hardest-hit sectors has been the aviation, aerospace, and defense sector, where supply chains span from original equipment manufacturers to maintenance/overhaul to the end customer (e.g., airlines/defense sectors), and beyond. As the industry looks to reimagine its supply chains, it is doing so with an increased focus on ESG. Indeed, increased supply-chain efficiency and resilience often demand more sustainable approaches. As just one example in this hard-hit sector, aircraft-parts manufacturers are increasingly exploring three-dimensional (3D) parts and the use of new, more sustainable composites as one way to reduce supply-chain uncertainties. In addition, digitization will be critical for companies to, among other things, use the Internet of Things (IoT) to better manage and source inventory, demonstrate compliance, and report on their ESG obligations to relevant stakeholders.

ESG goals are integral to sustainable supply-chain approaches, but, more than that, sustainability can foster recovery and competitive advantages. Supply chains are a powerful tool in strengthening companies’ efforts to meet their ESG goals in the Americas.

Jennifer Trock

While the Trump administration has overseen the entry into force of USMCA, which has entire chapters devoted to environmental and labor protections in the parties, it has simultaneously rolled back global and domestic commitments on climate-change initiatives.³ Nevertheless, companies and NGOs are increasingly stepping up their ESG commitments—not only as the right thing to do, but also in response to investor expectations. The Biden administration is expected to seek to support the ESG direction of travel further by enforcing the environmental and labor chapters of USMCA, as well as supporting increased climate-change and sustainability initiatives domestically and globally.

ESG goals are integral to sustainable supply-chain approaches, but, more than that, sustainability can foster recovery and competitive advantages. Supply chains are a powerful tool in strengthening companies’ efforts to meet their ESG goals in the Americas.

Landon Loomis

Vice President, Global Policy
Managing Director
Boeing Brazil

On lessons learned from the aerospace and aviation industry

Boeing has longstanding supply-chain relationships across Latin America that support the firm’s global commercial, defense, and service business. These ties are a testament to the region’s growing technological capabilities, and demonstrate the importance of focused investments in research and development, infrastructure, and education. Yet the nature of supply chains is evolving, and has expanded beyond the traditional metrics of quality, capability, and value, increasingly encompassing ESG standards as well.

On environmental, social and governance issues, supply-chain relationships can help drive meaningful change in at least two ways: first, by using ESG criteria to evaluate and select potential suppliers, and second, by including ESG within the contracted work itself. True collaboration on ESG goals would also empower suppliers to speak up and identify problems they see within the contracting company – further enhancing accountability.

On environmental, social and governance issues, supply-chain relationships can help drive meaningful change in at least two ways: first, by using ESG criteria to evaluate and select potential suppliers, and second, by including ESG within the contracted work itself.

Landon Loomis

Boeing is hard at work on these issues with a stakeholder-focused approach. The company appointed a chief sustainability officer to lead its ESG agenda company-wide, made significant commitments to diversity and inclusion programs, and are investing heavily in breakthrough environmental technologies. Boeing’s supply chain and government partners across Latin America will magnify the impact of this effort, and help the company continue to meet consumer expectations to source responsibly, foster economic inclusion, and drive environmental sustainability.

Question five

How can lessons from other regions in deepening regional supply-chain integration be applied to the Americas, especially with an eye toward leapfrogging economic development in the region?

Omar Vargas

Global Head of Government Affairs
3M

On government best practices for addressing supply-demand imbalances

In a world of just-in-time production and consumption, little supply-chain elasticity exists when there are dramatic demand spikes. With COVID-19, demand spikes ranged from twenty times to forty times pre-COVID-19 averages. Total global industrial capacity was not enough to respond to the sharp supply-demand imbalance, which was further exacerbated by rigid regulatory and trade practices. There are several key global government best practices for developing a sustainable national stockpile for future emergencies. Governments that were able to enact the following did best in their national responses. These lessons are equally applicable in the Americas.

Supply-chain localization or regionalization efforts can best be supported by policies that provide tax and regulatory certainty that will support the economics of supply-chain systems that may fall idle between demand spikes.

Omar Vargas

Governments are resilient, and can respond to sudden demand spikes by having immediate access to a national stockpile of needed supplies.
Governments have “emergency-supplies stockpile” specified in their laws as a fully funded, non-negotiable national requirement.
Governments must have the budgetary flexibility to procure what they need when they need it.
Governments have established “emergency-use authorizations” as part of their national public health laws to enable rapid regulatory access to needed supplies beyond their borders. Governments must have globally harmonized standards, so they have access to global supply chains. The more non-standard the regulation, the more difficult the task of procurement becomes for a country.
Governments must have good legal and customs systems to fight product fraud and counterfeits.
Governments allow for flow of goods through their borders. Countries that erected export restrictions scored a short-term win, but left themselves as islands with less access to supplies because supply chains simply adjusted and flowed around them.
Governments enter public-private partnerships with critical best-in-class suppliers. Supply-chain localization or regionalization efforts can best be supported by policies that provide tax and regulatory certainty that will support the economics of supply-chain systems that may fall idle between demand spikes.

Alison J. Stafford Powell

Partner, International Commercial Practice Group
Baker McKenzie (Palo Alto)

On lessons learned from Europe, the Middle East, and Africa (EMEA)

Deepening regional supply-chain integration requires a strategic vision built around an enabling environment, strong alliances with other gateway countries, and collaborative investments in technology.

Dubai’s success as a gateway to the Middle East, Africa, and South Asia exemplifies this. The early establishment of the Dubai International Financial Center (DIFC) attracted trade-finance banks and related talent to facilitate trade and investment flows.⁴ Multiple free-trade zones, including Jebel Ali Free Zone (JAFZA) and Dubai Airport Freezone Authority (DAFZA), contributed to this enabling environment, turning Dubai into a logistics hub.

The Dubai Chamber of Commerce & Industry’s strategy to strengthen industry ties with other regions through establishing representative offices in key locations, including Panama and Brazil, has been highly effective in solidifying the global profile of Dubai as a gateway between those other regions.⁵ The chamber regularly runs a Global Business Forum in other regions, including Latin America, to build productive partnerships and alliances across sectors, including agribusiness, logistics, energy, tourism, and financial services.⁶

Cross-regional and public-private partnerships present an opportunity to spread the costs and ensure early adoption of best practices and common standards when leveraging the latest technologies. The World Economic Forum’s pilot partnerships with the Abu Dhabi Digital Authority, the Dubai Future Foundation, and Saudi Aramco in applying its Blockchain Deployment Toolkit demonstrate the benefits of such an approach for overcoming adoption challenges for successful regional implementation of a digital infrastructure.⁷

The Dubai Chamber of Commerce & Industry’s strategy to strengthen industry ties with other regions through establishing representative offices in key locations, including Panama and Brazil, has been highly effective in solidifying the global profile of Dubai as a gateway between those other regions.

Alison J. Stafford Powell

DP World, the Dubai-based ports operator and world trade-enablement leader, has also recently intensified efforts to digitize logistics in the Middle East and beyond by implementing TradeLens, an open and neutral online, blockchain-based logistics platform, in partnership with shipping and information-technology (IT) companies A.P. Moeller—Maersk and IBM.⁸

These collaborative investments have leapfrogged cumbersome and discordant paper-based documentation systems, and have standardized processes, reduced delays, and improved operational efficiencies across the regional supply chain.

Anne Petterd

Chair, Asia Pacific International Commercial & Trade Practice Group
Baker McKenzie (Australia)

On lessons learned from the Asia-Pacific (APAC) region

A key lesson for deepening regional supply-chain integration is learning how to navigate areas of common needs, as well as differences. This is illustrated by trade-integration steps taken by the ten member states of the Association of Southeast Asian Nations (ASEAN) Economic Community.⁹

As in the Americas, the ASEAN member states are diverse in many ways, including geography, culture, and legal systems, as well as economic and infrastructure development. However, the members also have shared needs.

An identified common imperative to supporting economic growth in ASEAN was to build transport linkages that further connect the region and facilitate investment. Improved infrastructure in terms of transportation and utilities is expected to greatly assist development of supply chains in ASEAN.¹⁰

For example, an ASEAN member may be looking to build manufacturing hubs to attract businesses that have decided to diversify their supply chains. It is also essential to have the right infrastructure in place in terms of transportation routes, power, communications, and port capacity for the new manufacturing hub to be attractive to business.

An identified common imperative to supporting economic growth in ASEAN was to build transport linkages that further connect the region and facilitate investment.

Anne Petterd

Improved infrastructure is not the only requirement for deepening supply chains. Another important common initiative is the ASEAN Single Window, which is being developed as an integrated platform for facilitating trade through faster clearance of cargo and release of shipments.¹¹

Of course, given the differences among ASEAN member states, first agreeing to, and then implementing, all these measures take time. While the ASEAN members have needed to remain focused on making progress, they have also needed to allow for members to progress at differing rates, in line with priorities for individual member states.¹²

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Conclusion

The year 2020 was marked by intense instability and an entire host of challenges the world had not experienced in recent history. The COVID-19 pandemic continues to devastate the health and wellbeing of the world’s population, all while destabilizing economies and growth rates alike. This is not likely to end soon.

Caught at the center of the shockwaves are supply chains, which have experienced, and continue to experience, some of the most severe disruptions they have ever faced at such a global scale. Though different supply chains and industries have had to adapt differently, the lessons the world learned from 2020 will have lasting repercussions for the years ahead.

As the Biden administration prepares to enter office in January 2021, one key priority will be building greater cooperation among partners and allies in the Americas. How it does so will be a determining factor for the future of supply chains, and the Americas overall.

Acknowledgements

The Atlantic Council’s Adrienne Arsht Latin America Center would like to thank the various authors who contributed to this publication, as well as recognize the many individuals who made its creation possible. A special thank you to Roberta Braga and Angela Chavez for their leadership in the production of this Spotlight, and to Natalie Alhonte Braga, Amy Nielson, Leah Schloss, Heather Pinnock, and the entire Baker McKenzie team, who provided invaluable assistance with the publication. Thank you also to Nikita Kataev for her design expertise, and to Susan Cavan for editing the piece. Special recognition goes to Daniel Payares and Beatriz Godoy for their research support. Finally, the Atlantic Council thanks Baker McKenzie’s partners spanning practices and regions for their support of its work and invaluable contributions over the course of many years.

About the authors

Juan Carlos Baker

Juan Carlos Baker is the CEO and founding partner at Ansley Consultores. With almost twenty-two years of professional experience in the public sector, Baker is a globally recognized expert in trade negotiations, international trade, regional economic integration, and foreign relations. In Mexico’s Ministry of Economy, Baker held several important positions, including as director general for North America, where he oversaw the successful implementation of NAFTA provisions in Mexico; deputy chief negotiator of Mexico for the Trans-Pacific Partnership Agreement (TPP); chief of staff to the minister of economy; and undersecretary of foreign trade. As undersecretary of foreign trade, he led Mexico’s trade agenda during USMCA negotiations. At the multilateral level, Baker represented Mexico at different regional and multilateral organizations, such as the World Trade Organization (WTO), the Organization for Economic Cooperation and Development (OECD), the Group of 20 (G20) and the Asia-Pacific Economic Cooperation Forum (APEC).

Maurice Bellan

Maurice Bellan is the managing partner of the Washington, DC, office and a member of the Global Dispute Resolution and North America Litigation and Government Enforcement Steering Committees. He is a former trial attorney at the US Department of Justice, and is experienced in a broad range of fraud and anti-corruption matters. Bellan was recently named by Savoy magazine as one of the most influential African-American lawyers in the United States. He regularly counsels clients in industries heavily regulated by US federal programs or engaged in any activity that is sponsored by the federal government. He leads the Firm’s False Claims Act (FCA) and government-contracts practice, and his work routinely involves FCA compliance, investigations and litigation, bid proposal review and advice, suspension and debarment investigations and negotiations, protection of intellectual property in government contracting, and defense against stark and anti-kickback allegations. Bellan also handles multinational anticorruption investigations involving the Foreign Corrupt Practices Act (FCPA), and has also shepherded clients through enforcement actions pursued by several branches of government including the Department of Justice, Department of Defense, General Services Administration, Financial Crimes Enforcement Network, Environmental Protection Agency, Food and Drug Administration, Department of Health and Human Services, and various US congressional committees.

Christina Conlin

Christina Conlin is a member of Baker McKenzie’s International Commercial practice in Chicago. Prior to joining the firm, she was chief compliance officer for McDonald’s Corporation’s European operations, providing strategic leadership and guidance on regulatory compliance and corporate governance for thirty-nine markets across Europe, Central Asia, and North Africa. She also previously served as general counsel in McDonald’s US central division, where she led a legal team that advised the company and senior leadership on franchising, supply-chain, real-estate, and operational matters. Conlin also worked for more than a decade as a trial lawyer in private practice, representing franchisors, distributors, real-estate developers, manufacturers, and others in court and arbitration.

Kerry Contini

Kerry Contini is a partner in Baker McKenzie’s International Trade Practice Group in Washington, DC. She has written on export controls and trade-sanctions issues for several publications, including WorldECR, Export Practitioner, and Ethisphere. Contini is a co-chair of the Export Controls and Sanctions Section of the Association of Women in International Trade. She joined the firm as a summer associate in 2005 and became a full-time associate in 2006. She focuses her practice on export controls, trade sanctions, and antiboycott laws. This includes advising US and multinational companies on trade-compliance programs, risk assessments, licensing, review of proposed transactions, and enforcement matters. Contini works regularly with companies across a wide range of industries, including the pharmaceutical/medical-device, oil and gas, and nuclear sectors.

Reagan Demas

Reagan Demas has significant experience working on behalf of companies and investors in emerging markets and high-risk jurisdictions. He has managed major legal-compliance investigations for a variety of Fortune 500 companies and negotiated settlements before the US Department of Justice, US Securities and Exchange Commission, and other federal and state regulatory entities, obtaining declinations in a number of matters. He has also conducted risk assessments and due diligence in a variety of legal-compliance matters for companies across industries, and has worked on the ground evaluating partnerships, investments, and other business opportunities worldwide. Reagan has written and spoken extensively on emerging compliance trends, ethics, corruption, and doing business in Africa. In 2019, Reagan was selected as a BTI Client Service All-Star by corporate counsel in recognition of being a leader in superior client service. He is the founder and chief editor of Baker McKenzie’s Global Supply Chain Compliance blog, and has served on the steering committee of the North American Litigation and Government Enforcement Practice Group.

Ildefonso Guajardo

Ildefonso Guajardo Villarreal, a member of the Adrienne Arsht Latin America Center Advisory Council, is a Mexican economist and politician who, most notably, served in the administration of former Mexico President Enrique Peña Nieto as secretary of economy. Prior to this role, Secretary Guajardo worked with the International Monetary Fund as an associate economist, served as director of the North America Free Trade Agreement Affairs Office at the Embassy of Mexico in Washington, and held several other positions in various levels in the Mexican federal government.

Landon Loomis

Landon Loomis was appointed Boeing International’s vice president for global policy in August 2020. Loomis also serves as managing director for Boeing Brazil. He is based in São Paulo and reports to Sir Michael Arthur, president of Boeing International. As vice president for global policy, Loomis coordinates non-US government affairs and policy work, including geopolitical analysis to underpin key Boeing decision-making. Loomis works with Boeing’s country and regional leaders on sales campaigns and business-growth initiatives while strengthening relationships with foreign governments and other important stakeholder groups outside the United States. As managing director of Boeing Brazil, Loomis is responsible for leading company strategy, developing business and industrial partnerships, expanding stakeholder relationships, and leading Boeing’s productivity and enterprise functions in Brazil. Prior to joining Boeing, Loomis served in the White House as a special adviser to Vice President Mike Pence from April 2017 to August 2019. In that role, he was responsible for strategy, analysis, and implementation of the vice president’s engagement with thirty-five countries in the Western Hemisphere, and also advised on key international economic and trade policy issues.

Jason Marczak

Jason Marczak is director of the Atlantic Council’s Adrienne Arsht Latin America Center. He joined the Council in October 2013 to launch the center and set the strategic direction for its Latin America work. Marczak has over twenty years of expertise in regional economics, politics, and development, working with high-level policymakers and private-sector leaders to shape public policy. At the Atlantic Council, he spearheads results-oriented programming that moves ideas to action with a focus on improving socio-economic prosperity in Mexico, Central America, Colombia, Venezuela, Brazil, and Argentina. Most recently, he has overseen a multi-faceted effort to shape the region’s COVID-19 recovery. Since 2016, Marczak is an adjunct professor at The George Washington University’s Elliott School of International Affairs. He was previously director of policy at Americas Society/Council of the Americas and co-founder of Americas Quarterly magazine, overseeing the magazine’s launch. He is a frequent op-ed contributor, a sought-after speaker, and has testified before the US Congress.

Manuel has been practicing with Baker McKenzie since 1992. He is the national coordinator of the International Commercial & Trade Group in Mexico, the firm’s Latin American regional coordinator of the International Commercial and Trade Practice Group, and member of the steering committee for the Global Automotive Industry Group. During his professional practice, he has specialized in the manufacturing “maquiladora” industry in all matters associated with its business planning and compliance. He concentrated his practice in the representation of foreign investors doing business in Mexico. He has written various articles related to manufacturing in México, and has given lectures organized by various associations, including the Mexican-American Chamber of Commerce and American Management Association.

Anne Petterd

Anne Petterd has been with Baker McKenzie since 2001. Prior to that, she spent four years with the Australian Attorney-General’s Department/Australian Government Solicitor mostly working on large IT projects. In her time at Baker McKenzie, she has spent eighteen months working in London (2007–2008) and, more recently, three years working in Singapore (2017–2020). Her practice focuses on IT and telecommunications supply arrangements; understanding regulatory issues for online, telecommunications, and IT businesses (in particular, for data management); and trade regulatory and commercial contracting advice. Petterd regularly leads projects for drafting, localizing, or rolling out commercial agreements of data-protection policies for multiple Asia-Pacific jurisdictions, and conducting due diligence for undertaking new activities in Asia-Pacific markets. While in Singapore, she worked with many businesses seeking to navigate data, tech-regulatory, and business-establishment issues across Asia.

Shunko Rojas

Shunko Rojas is co-founder and partner at Quipu. He is a non-resident fellow at Harvard’s Institute for Global Law and Policy (IGLP), and senior adviser to the US Chamber of Commerce’s US-Argentina Business Council (USABC). He has served as a member of the World Economic Forum (WEF) Global Future Council on International Trade and Investment. Prior to founding Quipu, Rojas served as undersecretary of international trade (2016–2019), and president of the National Commission of Foreign Trade (2016) of Argentina, playing a key role in the country’s successful international insertion strategy. While in government, he led key international trade negotiations (including Mercosur—European Union), represented Argentina at international forums (the World Trade Organization, Organisation for Economic Co-operation and Development, and the Group of Twenty), and spearheaded the country’s national export strategy.

Lisa Schroeter

Lisa Schroeter is the global director of trade and investment policy for the Dow Chemical Company. As part of the corporate Government Affairs & Public Policy team, Schroeter has direct responsibilities for defining and managing the company’s global trade agenda, as well as developing strategy on the international aspects of key corporate issues. Based in Washington, DC, she focuses on trade policy and legislation, trade negotiations, and investment issues that foster growth in Dow’s global businesses through identification of policies facilitating market access and reducing global distribution costs. Before joining Dow, she was the executive director of the TransAtlantic Business Dialogue (TABD). TABD is a unique trade-facilitation process by which US and European corporations work with the US administration and the European Commission to implement practical, detailed recommendations. Schroeter was responsible for staffing the US chair chief executive officer, working with the issue committees to develop and promote their recommendations, and facilitating business and government interaction. Schroeter joined TABD in 1999, and managed the process on behalf of the Boeing Company, PricewaterhouseCoopers, United Technologies Corporation, and Xerox.

Alison J. Stafford Powell

Alison Stafford Powell has considerable experience counseling companies on cross-border outbound trade compliance in the areas of export controls, trade and financial sanctions, anti-terrorism controls, anti-corruption and anti-money laundering rules, US anti-boycott laws, and US foreign-investment restrictions. With a background also in EU and UK trade restrictions, she helps non-US companies navigate conflicting compliance obligations and risks under US and EU trade rules. She is a dual US/English qualified lawyer and has worked in the firm’s London, Washington, DC, and Palo Alto offices since 1996. She advises on all aspects of outbound trade compliance, including compliance planning, risk assessments, licensing, regulatory interpretations, voluntary disclosures, enforcement actions, internal investigations and audits, mergers and acquisitions, and other cross-border activities. She develops compliance training, codes of conduct, and compliance procedures and policies. She has particular experience in the following sectors: technology/cloud/IT services, financial services, travel/hospitality, telecommunications, and manufacturing.

Joyce Smith

Joyce Smith is a partner in the San Francisco office and chair of the California International Commercial Practice Group. Joyce leads the firm’s Global IP Transactions and Tax Practice, chairs its North American International Commercial Practice Steering Committee, and serves as the California Offices representative on the North America Diversity and Inclusion Committee. Her practice focuses on advising multinational companies on cross-border commercial transactions, intellectual-property (IP) and technology licensing, development and acquisitions, IP migrations for post-acquisition integrations and international tax reorganizations, implementation of international tax restructurings, FCPA compliance and due diligence, and other cross-border regulatory, compliance, and commercial issues. She has represented clients ranging from start-ups to large multinational corporations in a variety of industries, with a focus on technology, e- commerce, and pharmaceuticals.

Jennifer Trock

Jennifer Trock is chair of Baker McKenzie’s Global Aviation Group and North America International Commercial Practice Group. She leads the firm’s unmanned aircraft systems (UAS) focus team and is a member of the firm’s Future Mobility Taskforce. She serves as the chair of the American Bar Association’s Forum on Air & Space Law. Trock has been recognized by Chambers USA, Aviation Regulatory–National (2007–2020) and has received honors from Euromoney’s Guide to the World’s Leading Aviation Lawyers, Infrastructure Journal, and the Washingtonian. She routinely advises domestic and foreign airlines, airports, aerospace manufacturers, travel-distribution clients, original equipment manufacturers, and corporate entities on complex transportation and aviation-related regulatory, aviation safety, litigation, enforcement, commercial, restructuring, and financing matters. She has also handled all types of transportation-related regulatory issues, including with respect to transportation of hazardous materials, federal motor-carrier licensing, and transportation security matters.

Omar Vargas

Omar Vargas, a graduate of American University’s Washington College of Law and the School of International Service, was appointed in 2017 by 3M Company to lead its global engagement of government officials and public policy stakeholders. Prior to joining 3M, Vargas held senior government-relations roles with Praxair and PepsiCo, handling a range of international and US federal and state issues. In the early 2000s, he was as an appointee of President George W. Bush to the US Department of Justice, where he served in a variety of capacities, and his portfolio included a broad range of law-enforcement, civil-rights, national security, and immigration-policy matters.

Carlos Alberto Vela-Treviño

Carlos Vela-Treviño is a partner in Baker McKenzie’s Information Technology and Communications Practice Group in Mexico City, and the head of the firm’s Privacy and Data Protection practice in Mexico. He has vast experience in corporate, commercial, and transactional work, including mergers and acquisitions, corporate restructuring, corporate governance, and private-equity transactions. A certified information privacy manager, he is recognized by Legal 500 and other international publications as one of the country’s leading IT/C and media lawyers. Prior to joining Baker McKenzie, he led the IT/C legal practice of a Big Four consultancy firm. He is one of Mexico’s most active privacy, data-protection, and information security lawyers. He has implemented privacy-management compliance programs for more than one hundred companies, including several Fortune 500 companies. He advises on corporate and commercial matters where privacy is an issue, including e-discovery, FCPA investigations, e-commerce, direct marketing, privacy in the workplace, litigation, and machine-to-machine communications.

About the Atlantic Council’s Adrienne Arsht Latin America Center

The Adrienne Arsht Latin America Center (AALAC) broadens understanding of regional transformations through high-impact work that shapes the conversation among policymakers, the business community, civil society, and media. Founded in 2013, the Center focuses on Latin America’s strategic role in a global context with a priority on pressing political, economic, and social issues that will define the trajectory of the region now and in the years ahead. Select lines of programming include: Venezuela’s crisis; Mexico’s US and global ties; China in Latin America; Colombia’s future; a changing Brazil; Central American prosperity; combatting disinformation; shifting trade patterns and modernization of supply chains; charting a post-COVID future; Caribbean development; and leveraging energy resources. Jason Marczak serves as Center Director.

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1 “The Biden Plan to Rebuild Supply Chains and Ensure the US Does Not Face Future Shortages of Critical Equipment. Biden-Harris for America,” Biden for President, https://joebiden.com/supplychains/.

2 Emma Cosgrove, “Biden and Trump Envision Similar Supply Chains, but Difference Paths to Get There,” Supply Chain Dive, October 16, 2020, https://www.supplychaindive.com/news/biden-trump-supply-chains-reshoring-inventory-trade-tariffs/587152/.

3 United States-Mexico-Canada Agreement Implementation Act, P.L. 116-113 (2020), Title VII–VIII; John Schwartz, “Major Climate Change Rules the Trump Administration Is Reversing,” New York Times, April 29, 2019, https://www.nytimes.com/2019/08/29/climate/climate-rule-trump-reversing.html.

4 “About Us,” Dubai International Financial Centre, https://www.difc.ae/about/.

5 Who We Are,” Dubai Chamber of Commerce & Industry, https://www.dubaichamber.com/who-we-are.

6 Ibid.

7 Linda Lacina, “Thoughtful Blockchain Implementation Is Key to Improving Supply Chains in a Post-COVID World,” World Economic Forum, April 28, 2020, https://www.weforum.org/agenda/2020/04/blockchain-development-toolkit-implementation-supply-chains-in-a-post-covid-world/.

8 Sultan Ahmed Bin Sulayem, “DP World Joins with TradeLens To Digitise Global Supply Chains,” DP World, May 20, 2020, https://www.dpworld.com/news/releases/dp-world-joins-with-tradelens-to-digitise-global-supply-chains/.

9 Association of South East Asian Nations.

10 “ASEAN Single Window: Lowering the Costs of Trade Through Faster Customs Clearance,” Association of Southeast Asian Nations, https://www.asean.org/storage/images/2015/October/outreach-document/Edited%20ASEAN%20Single%20Window-2.pdf.

11 “Infrastructure Investor,” ASEAN Intelligence Report, April 2013, https://www.asean.org/wp-content/uploads/2016/09/Infrastructure-investor.pdf.

12 “What is the ASEAN Single Window?” ASEAN Single Window, November 15, 2020, https://asw.asean.org/.

The post Spotlight: The Biden-Harris Administration and the future of supply chains in the Americas appeared first on Atlantic Council.

Seek membership for Mexico

Christopher Skaluba, Gabriela R. A. Doyle — Wed, 14 Oct 2020 18:00:06 +0000

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Donald J. Trump’s presidency has upended the assumption that NATO could count on support from the US commander in chief. The challenge Trump poses to the orthodoxy around the Alliance is part personal, part political, and part reflective of changing attitudes among the US public about foreign and defense policy. It also resonates, in substance if not style, with aspects of the presidencies of Barack Obama and George W. Bush, where NATO was sometimes regarded as a burden to carry rather than an asset to wield.

While this state of affairs might be dismissed as circumstantial to each administration, the questioning of NATO’s centrality to US security interests should be viewed as a trend with underlying structural rationales linked to public sentiment. Like the proverbial boiling frog, progressive US detachment from NATO might result in a sudden decoupling from the Alliance—a situation NATO could not survive and which by multiple accounts almost happened at NATO’s Brussels Summit in 2018.¹ For Europeans who view US security guarantees as critical to their sovereignty and for those in the United States who believe the US alliance system is the sine qua non of its power and influence globally, there is an urgent confluence of purpose to rekindle Washington’s fundamental commitment to NATO.

Eventual Mexican membership in NATO may be a necessary ingredient for keeping the United States invested in European security over the long term.² This suggestion is made with an eye toward the reality that economic³ and political⁴ power in the United States is shifting to places and populations with fewer traditional ties to Europe such that broadening NATO’s appeal to a diversifying US public is imperative.

The case for diversifying US public support for NATO

The idea that Mexico is the key to keeping the United States committed to an Alliance whose main business is deterring Russian aggression in Europe is admittedly counterintuitive. It also requires an assessment of why this would be an attractive option for Mexico and of what Mexico would bring to the Alliance in practical terms; there are compelling, if inconclusive, arguments on both counts.

Our argument starts from the premise that NATO is foundational to US global leadership such that making it relevant to emerging communities in the United States is compulsory if the Alliance is to earn their political allegiance. It also supposes that sustaining support for NATO must be more than an exercise in public diplomacy, even if that is a necessary element. Instead, ensuring US public support for the Alliance must be grounded in policies that matter to an increasingly diverse and empowered segment of the citizenry.

Making these policies relevant to a broad swath of the US public is especially tricky in a country as expansive as the United States. Regional divergences, ethnic and racial diversity, and political polarization make monolithic solutions impractical. Indeed, Russian malfeasance—including direct interference in US elections—is not the broad-based, animating concern it was when Moscow’s Cold War nuclear arsenal was an omnipresent concern for everyone. It is possible a US-China long-term competition could serve as a general rallying cause, but NATO’s role in such a scenario is uncertain since European publics do not feel threatened militarily by China.

Instead, an enduring US commitment to NATO is more likely to be secured by a variety of policies or missions that reflect the security interests of a diversifying US public. These undoubtedly must include deterrence of Russia—such policies must be germane to European publics as well—but might also require combatting nontraditional threats, such as pandemics and climate change, that are increasingly important to younger citizens.⁵ However, regional interests will remain an important part of the puzzle as well.

Just as attentiveness to the security of European allies has been a prerogative for generations of Americans with European lineage—which have heretofore dominated political and economic power in the United States—it makes sense that citizens of other backgrounds will be compelled by the security concerns of their familial homelands. For NATO, this might eventually mean more prominent roles in addressing security in Africa or Asia.⁶ But first, the interests of the Hispanic/Latinx⁷ community should take priority, not least because formalizing a relationship between Mexico and NATO is an attainable policy goal.

Al igual que la atención a la seguridad de los aliados europeos ha sido una prerrogativa para generaciones de estadounidenses de linaje europeo—que hasta ahora han dominado el poder político y económico en los Estados Unidos—tiene sentido que los ciudadanos de otros orígenes se vean obligados a preocuparse por la seguridad de sus países de origen.

Mexican troops on parade on September 16, 2015 (Source: Wikimedia Commons)

Domestic demographic trends in the United States support this logic as well. According to the Pew Research Center, the US Hispanic/Latinx population reached 60.6 million in 2019, making up 18 percent of the total US population.⁸ Of that number, people of Mexican origin account for 62 percent of the nation’s overall Latinx population or some 37 million people. Between 2010 and 2019, the Latinx community accounted for more than half of all US population growth, even as that growth has begun to slow. Overall, Latinx people are the country’s second-largest ethnic group, behind white non-Hispanics.⁹

With the Hispanic/Latinx community projected to comprise 29 percent of the US population by 2050, its views on international relations must be accounted for.¹⁰ While there is limited and conflicted polling data regarding Latinx preferences on foreign policy,¹¹ and even less on views toward NATO, anecdotally, it is a low priority. However, a 2014 Chicago Council on Global Affairs study found “that Hispanic Americans are more positive than other Americans toward Mexico. On the scale of ‘feelings’ from 0 to 100, with 100 being the warmest and 50 being neutral, Latinos give Mexico an average rating of 67, compared to an average of 51 among non-Latinos.”¹²

That Mexico’s NATO membership would motivate the US Latinx community to become champions of the Alliance is unknowable short of further research, but it is a reasonable supposition based on the currently available data and common sense. Even a debate about the possibility is likely to introduce NATO to a significant number of US citizens who are otherwise unacquainted with the Alliance, a beneficial outcome in its own right, and one whose effect can be measured. To that end, a structured dialogue between NATO and Mexico to explore a basis for cooperation would be a positive first step.

While NATO membership for Mexico is a generational project requiring a bevy of political and policy incentives to be aligned on all sides, a formal partnership is attainable in the short term. Such a prospect is an opportunity to determine how US Latinx attitudes toward NATO would be impacted while providing the necessary time to work through the practical benefits of eventual membership for both Brussels and Mexico City.

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Making the case to Allied capitals

While the central argument of this essay is that European allies should support a formal relationship with Mexico as a means of solidifying long-term US support for NATO, the traditional case for Mexico’s eventual membership is reasonably strong on the merits.

In real and relative terms, Mexico would bring significant resources to the Alliance. Having spent just over $5 billion on defense in 2019, Mexico would rank in the top half of NATO members, even though with defense spending at 0.5 percent of GDP, it would rank last in NATO proportionally.¹³ However, joining the Alliance would assuredly be conditioned on increases to the defense budget such that the $5 billion baseline would come with a built-in upside. With nearly 237,000 active duty personnel, Mexico would be the third-largest military in NATO behind the United States and Turkey, with the army and navy accounting for the preponderance of Mexican end strength.¹⁴ To put this in perspective, Mexico’s accession would add more active duty military personnel to NATO’s ranks than the thirteen newest NATO members combined.

While Mexico’s armed forces have more limited competencies than NATO’s highest-end militaries, their capabilities start from a high floor, benefiting from bilateral security cooperation with the United States. As a 2016 Wilson Center study explains, “Over the last decade, the Mexican military has been crafted into a hardened and more professional military, skilled in fourth generation warfare, operating across the spectrum of conflict from surgical small-unit Special Forces missions to division-level stability operations in areas comparable in size to Belgium.”¹⁵ Like most new allies or partners, Mexico would not be expected to be a significant contributor to NATO missions immediately, even as the size and aptitude of its armed forces—which have an extensive record of Humanitarian Assistance/Disaster Relief missions worldwide—makes it capable of contributing in theory.¹⁶

Beyond the capability arguments, Mexico could serve as a gateway for an intensified NATO presence in Latin America where the Alliance is absent outside of a formal partnership with Colombia. Given Russia’s criticality in propping up Nicolás Maduro’s regime in Venezuela and China’s growing influence throughout the Global South, an augmented NATO role in Latin America could further democracy promotion while providing a timely deterrent effect, including on Russia’s solicitation of Mexico to increase bilateral trade and security agreements. Moreover, adding a third Pacific country to the Alliance would helpfully advance transatlantic and transpacific linkages with an eye on containing China.

Over time, NATO could use its relationships with Mexico and Colombia to replicate its other regional partnership arrangements, like the Mediterranean Dialogue, to include political consultations for sharing information on local Russian and Chinese activities, and building support for policies on 5G, supply chains, or countering disinformation. In such a context, Brazil’s flirtation with NATO would seem less far-fetched, and other possibilities, like a future democratic Cuba partnering with NATO, would be achievable.

Regardless of the other benefits, European allies would want assurances that Mexico City could be counted on to support decisions related to defense and deterrence in Europe. Even the prospect of keeping the United States committed to the cause of European sovereignty would be less appealing if Mexico were to wield its veto amidst a crisis with Russia, for instance. While such guarantees are hard to imagine at present, they are likely attainable with considered dialogue over time.

Making the case to Mexico City

Longstanding tensions between Mexico City and Washington and historical reluctance from Mexico to impose itself in global security affairs make the notion of Mexico’s membership in a US-led security alliance an ostensible non-starter.¹⁷ As a country without a traditional military threat, Mexico is unlikely to need Article 5 protection. In fact, joining NATO might increase risks to Mexico’s security, necessitating military commitments to missions remote from its parochial security concerns while diverting resources toward defense expenditures and away from pressing social needs.

Nevertheless, a formal relationship with NATO would entitle Mexico to enhanced security sector reform (SSR)¹⁸ from an organization well-versed in the subject; reinforce transatlantic trade relations through consolidation of economic and security interests in tandem with the United States-Mexico-Canada Agreement (USMCA) and the EU-Mexico Global Agreement;¹⁹ allow it to frame a foreign policy as an even closer partner in North American security on the heels of the USMCA; and underscore its status as a growing regional power²⁰ and influential example for other Latin American states.²¹

The most attractive of these factors might be the prestige and status that a NATO affiliation would convey. Despite Mexican President Andrés Manuel López Obrador’s nationalist focus, he shares one goal with his predecessor: securing greater respect for Mexico abroad. A formal association with NATO aligns perfectly with Mexico’s identities and interests as both a North American and Latin American power. Mexico can emphasize its relationship within the North American community, solidifying renewed ties with the United States and Canada through the USMCA. At the same time, membership would fortify Mexico’s currently implied role as a model to other Latin American nations, granting it the opportunity to influence any expanded NATO footprint in the region.

Una asociación formal con la OTAN se alinea perfectamente con las identidades e intereses de México como potencia norteamericana y latinoamericana.

President Donald J. Trump hosts President of the United Mexican States Andres Manuel Lopez Obrador on July 8, 2020.

(Source: White House Flickr)

Additionally, a number of NATO nations could offer attractive bilateral incentives for Mexico’s participation, including binational US-Canada support to Mexico’s law enforcement and judicial sectors. NATO would serve to both institutionalize and make multilateral existing defense and security dialogues with the United States in ways that might benefit Mexico City practically and politically (and which might be equally welcomed by the US Congress and policy community). NATO might also serve as a backbone for intensified security dialogues with nations, such as Spain and France, with which Mexico already has robust ties.

Finding the right collection of incentives for Mexican citizens and politicians will take time, but there are real options. A number of constituencies—including the Mexican Secretariat of National Defense (Secretaría de la Defensa Nacional, SEDENA), which would realize additional resources and the ability to focus away from internal security to more traditional military tasks—might view a relationship with NATO as an attractive possibility.²²

Conclusion

The US policy community has been focused on shoring up US support for NATO by coaxing European member states to increase burden-sharing contributions. The idea that increased European defense spending would settle US restiveness with NATO misses the point. In fact, the burden-sharing debate is serving as a proxy for underlying demographic realities at the root of waning US support for the Alliance.

While burden sharing is supposed to matter to Trump and his supporters, there is no evidence that even vast increases in European defense spending over the course of the Trump presidency have improved NATO’s standing with the US president or his political base. Rather than attempt to placate those that cannot be appeased, the policy community would be better served by finding new champions for the Alliance.

In discussing this proposal with European colleagues, a common retort is that building NATO’s relationship with Mexico is a distraction from the many security challenges facing Europe. In fact, it may be the key to keeping a rapidly changing United States attuned to those very concerns. It is comparable to a case like Iceland, whose strategic importance (geography) outweighs other types of contributions it can make. For allies that rely on security guarantees from the United States, it should matter little whether Mexico would send forces to an enhanced Forward Presence mission if its membership keeps the United States committed to the cause of European sovereignty.

While the idea of Mexico’s eventual membership in NATO may sound implausible, so did the possibility of Warsaw Pact nations joining the Alliance before circumstances intervened to make it inevitable. As the United States experiences dramatic political upheaval related to rapid demographic realignment, circumstances may again be conspiring to write NATO’s next surprising chapter.

* * *

Christopher Skaluba is the director of the Transatlantic Security Initiative in the Atlantic Council’s Scowcroft Center for Strategy and Security. He previously served as principal director for European and NATO Policy in the Office of the Secretary of Defense.

Gabriela R. A. Doyle is the program assistant in the Transatlantic Security Initiative.

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NATO 20/2020 Podcast

NATO 20/2020 is a weekly podcast that explores 20 bold ideas to push NATO to be more visionary, more capable, and more self-evidently valuable to the security of more people.

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NATO 20/2020

Nov 2, 2021

Buscando la adhesión de México

By Christopher Skaluba, Gabriela R. A. Doyle

La membresía de México en la OTAN puede ser la clave para mantener a Estados Unidos que cambia rápidamente y que invierte en la seguridad europea.

Europe & Eurasia Mexico

NATO 20/2020 Oct 14, 2020

Modernize the kit and the message

By H.E. Dame Karen Pierce DCMG

NATO will only remain successful over the next seventy years if it modernizes its capabilities, takes command of emerging technology, and harmonizes its strategic messaging.

Defense Policy Defense Technologies

NATO 20/2020 Oct 14, 2020

Put NATO back in the narrative

By Bridget Corna and Livia Godaert

NATO can recapture the imagination of allied publics by telling its own story better and in new ways to new audiences.

Europe & Eurasia Media

NATO 20/2020 Oct 14, 2020

Reimagine the Washington Treaty

By Damon Wilson and Will O’Brien

Reexamining NATO’s founding charter can be an exercise in creating an Alliance fit for a new geopolitical era.

Economy & Business Europe & Eurasia

Former Nonresident Senior Fellow

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1 Julia E. Barnes and Helene Cooper, “Trump Discussed Pulling U.S. From NATO, Aides Say Amid New Concerns Over Russia,” New York Times, January 14, 2019, https://www.nytimes.com/2019/01/14/us/politics/nato-president-trump.html.

2 While Article 10 of the Washington Treaty limits NATO membership to European nations, with the backing of NATO’s members, this can be overcome through accession protocols, which have been used routinely in NATO’s history to amend the treaty or to make necessary exceptions. Geographically, Mexico is roughly as equidistant to the North Atlantic area as longtime Alliance member Turkey, while a significant part of Mexican territory lies above the Tropic of Cancer, the southern demarcation line for North Atlantic territory in the Washington Treaty.

3 By our own calculations, using data from the International Monetary Fund and the Bureau of Economic Analysis at the US Department of Commerce, California, Texas, and Arizona in combination are the world’s third-largest economy by GDP.

4 Kristen Bialik, “For the Fifth Time in a Row, the New Congress is the Most Racially and Ethnically Diverse Ever,” Pew Research Center, February 8, 2019, https://www.pewresearch.org/fact-tank/2019/02/08/for-the-fifth-time-in-a-row-the-new-congress-is-the-most-racially-and-ethnically-diverse-ever/.

5 Harvard Kennedy School Institute of Politics, “Harvard Youth Poll,” April 23, 2020, https://iop.harvard.edu/youth-poll/
harvard-youth-poll; NATO Secretary General Jens Stoltenberg gave a keynote address to university students across ten NATO countries at a seminar on climate and security, where he emphasized that NATO must do its part in controlling climate change. NATO (North Atlantic Treaty Organization), “Secretary General: NATO Must Help to Curb Climate Change,” September 28, 2020, https://www.nato.int/cps/en/natohq/news_178372.htm?selectedLocale=en.

6 African Americans and Asian Americans represent just over 13 percent and 6 percent of the US population, respectively. United
States Census Bureau, “QuickFacts,” accessed October 10, 2020, https://www.census.gov/quickfacts/fact/table/US/IPE120219

7 The word “Latinx” is a relatively new term used to most inclusively identify the Hispanic and Latino community. “Hispanic” traditionally refers to an individual of a Spanish-speaking background, including from Spain, residing in the United States. “Latino” generally denominates an individual of Latin American or Caribbean background. To clarify the confusing overlap between the two terms and offer a gender-neutral alternative, “Latinx” is increasingly used as a politically correct pan-ethnic alternative, although it has not been widely adopted. For the purposes of this essay, Hispanic and Latinx have been used interchangeably or in combination as necessitated by the reference material. Mark Hugo Lopez, Jens Manuel Krogstad, and Jeffrey S. Passel, “Who Is Hispanic?” Pew Research Center, September 15, 2020, https://www.pewresearch.org/fact-tank/2020/09/15/who-is-hispanic/.

8 Luis Noe-Bustamante, Mark Huge Lopez, and Jens Manuel Krogstad, “U.S. Hispanic population surpassed 60 million in 2019, but growth has slowed,” Pew Research Center, July 7, 2020, https://www.pewresearch.org/fact-tank/2020/07/07/u-s-hispanic-population-surpassed-60-million-in-2019-but-growth-has-slowed/.

9 Jens Manuel Krogstad and Luis Noe-Bustamante, “Key Facts About U.S. Latinos for National Hispanic Heritage Month,” Pew Research Center, September 10, 2020, https://www.pewresearch.org/fact-tank/2020/09/10/key-facts-about-u-s-latinos-for-national-hispanic-heritage-month/; Luis Noe-Bustamante, Mark Hugo Lopez, and Jens Manuel Krogstad, “U.S. Hispanic Population Surpassed 60 Million in 2019, but Growth Has Slowed,” Pew Research Center, July 7, 2020, https://www.pewresearch.org/fact-tank/2020/07/07/u-s-hispanic-population-surpassed-60-million-in-2019-but-growth-has-slowed/.

10 Jeffrey S. Passel and D’Vera Cohn, “U.S. Population Projections: 2005-2050,” Pew Research Center, February 11, 2008, https://www.pewresearch.org/hispanic/2008/02/11/us-population-projections-2005-2050/.

11 While a 2019 Pew Research Center study found that a minority of Hispanics believe the United States should be active in world affairs, a
2014 Chicago Council of Global Affairs report noted roughly equal preferences between “white” and Latinx support for US global leadership. Pew Research Center, “Large Majorities in Both Parties Say NATO Is Good for the U.S.,” April 2, 2019, https://www.pewresearch.org/politics/2019/04/02/large-majorities-in-both-parties-say-nato-is-good-for-the-u-s/#views-of-u-s-relationship-with-its-allies; Dina S. Smeltz and Craig Kafura, Latinos Resemble Other Americans in Preferences for US Foreign Policy, Chicago Council of Global Affairs, 2015, https://www.thechicagocouncil.org/sites/default/files/Hispanics%20and%20Foreign%20Policy%20-%20Final.pdf.

12 Smeltz and Kafura, Latinos Resemble.

13 Marina Pasquali, “Military Expenditure As Percentage of Gross Domestic Product (GDP) in Mexico from 2007 to 2019,” Statista, June 15, 2020, https://www.statista.com/statistics/793995/military-expenditure-share-gdp-mexico/.

14 “Chapter Eight: Latin America and the Caribbean,” Military Balance (2020), 120 (1): 389.

15 Iñigo Guevara, A Bond Worth Strengthening: Understanding the Mexican Military and U.S.-Mexican Military
Cooperation, Mexico Institute, Wilson Center, October 2016, https://www.wilsoncenter.org/publication/
bond-worth-strengthening-understanding-the-mexican-military-and-us-mexican-military.

17 Anvesh Jain, “Canada, NATO, and the ‘Dumbbell Concept,’” NATO Association of Canada,
May 17, 2019, http://natoassociation.ca/canada-nato-and-the-dumbbell-concept/.

18 Marina Caparini, “Security Sector Reform and NATO and EU Enlargements” in SIPRI Yearbook 2003: Armaments, Disarmaments, and International
Security (Stockholm: Stockholm International Peace Research Institute, 2003), https://www.sipri.org/yearbook/2003/07.

19 European Union, “Mexico and the EU,” May 12, 2016, https://eeas.europa.eu/delegations/mexico/14897/mexico-and-eu_en.

20 Mexican Defense Secretary Gen. Salvador Cienfuegos and Adm. Vidal Soberón, secretary of the Mexican Navy, signaled Mexican willingness and desire to become more involved in global affairs at the North American Defense Ministerial in 2017. On a bilateral call with both Cienfuegos and Soberón, then-Secretary of Defense Mattis “lauded Mexico’s growing leadership in the region.” “Mattis, Mexican Military Leaders Discuss Bilateral Relationship,” February 8, 2017, DOD News, https://www.defense.gov/Explore/News/Article/Article/1075465/mattis-mexican-military-leaders-discuss-bilateral-relationship/

21 David G. Haglund, “Pensando Lo Imposible: Why Mexico Should Be the Next New Member of the North Atlantic
Treaty Organization,” Latin American Policy, October 14, 2010, 1(2): 281.

22 Rebecca Bill Chavez, “The Return of Latin America’s Military,” The New York Times Opinion, August 14, 2018, https://www.nytimes.com/2018/08/14/opinion/mattis-latin-americas-military.html.

The post Seek membership for Mexico appeared first on Atlantic Council.

US-Mexico ties: A post-official working visit readout

Cecilia Godoy — Tue, 14 Jul 2020 21:04:53 +0000

On June 9, 2020, the Atlantic Council’s Adrienne Arsht Latin America Center hosted a timely conversation on President Andrés Manuel López Obrador’s visit to Washington, DC—the president’s first international trip as head of state. Experiencing economic contraction and public health crises due to the COVID-19 pandemic, both presidents highlighted the bonds that unite their countries and emphasized areas for increased cooperation. Our discussion delved into the takeaways of the official working visit and the roadmap ahead for the US-Mexico relationship.

The conversation featured H.E Marta Bárcena Coqui, Mexican ambassador to the United States and The Hon. Christopher Landau, US ambassador to Mexico. Jason Marczak, director of the Adrienne Arsht Latin America Center, moderated this discussion.

The conversation focused on the priorities for strengthening US-Mexico relations in general, North American economic integration, and building partnerships to battle the COVID-19 crisis. Ambassador Bárcena emphasized that while President López Obrador’s main objective was to celebrate the entry into force of the USMCA, there was a broader agenda. The visit exposed a greater need to enhance cooperation on fighting COVID-19, particularly in the border region, as well as a greater recognition of the contribution of Mexican communities across the United States.

When asked about the major accomplishments during the trip, Ambassador Landau highlighted the importance of an in-person meeting to strengthen the friendship between both presidents and, consequentially, bilateral relations. He highlighted that the most important takeaway from the visit was that both presidents were able to talk in a more relaxed setting and that “there was a genuine bond created between [the] presidents, and that [such] bond will pay off in crises that we do not yet anticipate.” Ambassador Bárcena added that for Mexico, there was a clear change of tone in rhetoric, with President Trump “recognizing the increasing importance of the Mexican and Hispanic communities in the United States.”

During the reception dinner, President Trump and President López Obrador had an opportunity to listen to specific concerns from leaders in the private sector and innovative ideas to bring investment back to the North American region. Ambassador Landau stated the need “to strengthen the institutions that we have to regulate the flow of commerce and supply chains.” Additionally, he stated that it is imperative to recognize the region’s economic interdependence, and there is a growing need for a body that coordinates supply chains regionally.

Marczak asked Ambassador Bárcena about President López Obrador’s decision to not meet with Democratic leaders and Mexico’s commitment to work across the bipartisan aisle. Ambassador Bárcena reiterated Mexico’s commitment to engage with congressional members from both parties and explained that the decision was based on sanitary measures due to COVID-19. She stated that she is “sure that both Democrats and Republicans understand the relevance of Mexico, [as] Mexicans, understand the importance of keeping the dialogue with both political parties.” She underscored Mexico’s continued commitment to working with Congress and with Democrats on labor and environmental rights issues.

As countries consider the post-pandemic socio-economic realities, both speakers agreed on the potential for greater economic integration across the North American region. When asked about their upcoming priorities, the ambassadors concurred that the USMCA provides a new foundation for relocating supply chains from Asia. Additionally, both Ambassador Landau and Bárcena highlighted the importance of establishing an independent committee that would coordinate supply chains throughout the North American region in the case of another crisis. This committee would also identify the most relevant sectors for the region’s development. In his closing remarks, Marczak emphasized that “US-Mexico cooperation is fundamental for North America’s ability to effectively compete in the global economy.”

Cecilia Godoy is an intern at the Atlantic Council’s Adrienne Arsht Latin America Center.

The post US-Mexico ties: A post-official working visit readout appeared first on Atlantic Council.

Busch in The Hill: USMCA needs the WTO even more than NAFTA did

Marc L. Busch — Mon, 13 Jul 2020 17:17:16 +0000

ORIGINAL SOURCE

Marc L. Busch

Scowcroft Center for Strategy and Security

Americas Economy & Business

The post Busch in The Hill: USMCA needs the WTO even more than NAFTA did appeared first on Atlantic Council.

Why AMLO’s meeting with Trump is important

María Fernanda Bozmoski — Wed, 08 Jul 2020 13:57:21 +0000

Mexican President Andres Manuel Lopez Obrador, better known as AMLO, arrived in Washington, DC on July 7 to meet with US President Donald J. Trump. To date, the two leaders have enjoyed a surprisingly cordial but tested relationship. The expectations for AMLO’s first international trip are inevitably high, especially given the timing amid the worst multi-dimensional crisis in recent history but also coming just a week after the US-Mexico-Canada Agreement (USMCA) entered into force. For the United States, the meeting and the ensuing side-by-side pictures will send strong signals to the region and the world that US-Mexico ties are in a good place. Some key topics for the meeting will include trade, regional prosperity and security, and public health cooperation.

Cheers to USMCA: Last year, Mexico was the United States’ number one trading partner with a total estimated value of $1.6 billion per day after a sevenfold increase of bilateral trade between the two countries between 1993 and 2019. Accepting an invitation to meet with President Trump and celebrate the USMCA, despite the political risks and Prime Minister Trudeau’s decision not to attend, can be a positive step for US-Mexico ties, if the historic occasion is seized by both parties.

A common front against economic headwinds: The International Monetary Fund’s recently-released World Economic Outlook outlines a dark scenario for Latin America, comparable to a “lost decade” for the region. The expectation is a contraction by more than five percent for Latin America, and over ten percent in Mexico—the highest estimated contraction of any country. But with the USMCA’s new rules of the game now official, ongoing supply chain disruptions from the coronavirus pandemic, and the dragging trade conflict with China, Mexico and the United States can and must find new ways to work at all levels of the relationship to attract investment, advance North American competitiveness, create jobs, and promote economic development and prosperity in neighboring Central America.

The immigration elephant in the room: Mexico functions as a “hinge” between the United States and the asylum-seeker origin countries of Central America. Immigration from Central America—and the push factors in the countries—is the big elephant in the room between AMLO and Trump. If the subject comes up, it will be an opportunity to address not just human trafficking and human smuggling, but also economic prosperity and development in Central America.

A North American response to COVID: Finally, the coronavirus has shocked the public health systems on both sides of the border. Drawing on lessons of the shared 2009 H1N1 epidemic, which included transparent reporting of cases and generous data sharing between both countries, as well as a joint plan with different future scenarios and the appropriate measures for each scenario, both sides should use the meeting to renew an ambitious commitment to a resilient, shock-proof North America. US-Mexican public health cooperation is due for a rethink that goes beyond the 2012 Operational protocol. Increased infectious disease surveillance, information sharing and even—to the greatest extent possible—shared research and development on medicines and vaccines, will be a key component for the US-Mexico agenda of the future—which begins today. The stakes are high—for the bilateral relationship and for the region—but so is the potential for a new chapter, that could have begun in July with the USMCA’s entry into force.

Maria Fernanda Perez Arguello is an associate director with the Atlantic Council’s Adrienne Arsht Latin America Center, where she focuses on Central America, Mexico, and the USMCA.

Start of USMCA brings hope amid COVID-19 economic crisis

By David A. Wemer

“Together, Canada, Mexico and the United States make North America an energy, manufacturing, and innovation powerhouse,” Damon Wilson says. “The USMCA helps unlock this potential, offering greater prosperity for these nations’ citizens and positioning democracies in North America to better shape global standards and compete with China.”

Coronavirus Energy Markets & Governance

New Atlanticist Apr 17, 2020

US-Mexico security cooperation after the COVID-19 shocks

By Pablo Reynoso Brito

In the post-coronavirus (COVID-19) world, US-Mexico security cooperation will continue to be critical for North America’s stability and prosperity. The current health and economic crises might impact Mexico’s security by causing social instability, straining law enforcement resources in marginal regions, and worsening the migration crisis.

Coronavirus Mexico

New Atlanticist Mar 25, 2020

What Mexico’s response to H1N1 can teach us about coronavirus and future pandemics

By Pablo Reynoso Brito

While the A(H1N1) and novel coronavirus (COVID-19) crises are different in magnitude and were caused by viruses with different levels of lethality, Mexico’s experience with the A(H1N1) can offer valuable lessons for current disruptions.

Coronavirus Mexico

The post Why AMLO’s meeting with Trump is important appeared first on Atlantic Council.

Start of USMCA brings hope amid COVID-19 economic crisis

David A. Wemer — Wed, 01 Jul 2020 14:58:01 +0000

More than nineteen months after it was originally signed, the United States Mexico Canada trade agreement (USMCA) went into effect on July 1, upgrading the existing North American Free Trade Agreement (NAFTA).

The deal, which was agreed to by then Mexican President Enrique Peña Nieto, Canadian Prime Minister Justin Trudeau, and US President Donald J. Trump in November 2018, was updated in December 2019 to strengthen labor, environmental standards, and enforcement provisions, to address concerns from US congressional Democrats. The USMCA also includes sections on automobiles, agriculture, data flows, intellectual property, energy, and pharmaceuticals.

The beginning of the new agreement coincides with a growingly uncertain economic outlook for North America, as the COVID-19 pandemic has sent economic shockwaves around the world. What will the new phase of North American trade look like and how will the USMCA help guide recoveries from the COVID-19 crisis? Our Atlantic Council experts weigh in on what the new USMCA era may bring:

Jump to an expert response:

Secretary Ildefonso Guajardo: The only light at the end of the tunnel.

Damon Wilson: A powerhouse together.

Jason Marczak: COVID-19 will make implementation more challenging.

Reed Blakemore: More certainty for North American energy investment.

Barbara C. Matthews: New agreement establishes high standards for future deals.

Maria Fernanda Perez Arguello: An occasion for optimism for the whole neighborhood.

Hung Tran: USMCA will deepen regionalization of supply chains.

Neil Brown: Despite USMCA, North America may see more confrontation on energy.

The only light at the end of the tunnel.

“The USMCA is the only light at the end of the tunnel, because unfortunately, we never thought we would find ourselves in this crossroad: starting the new agreement during the worst moment of a crisis. We are predicting to lose around 10 million jobs in Mexico and the people below the level of poverty is expected to rise by 10 million—this figure will take us at least a decade back in terms of social development. The agreement will give us at least a new set of rules that will guarantee the continuation of North American integration.”

Secretary Ildefonso Guajardo, Former Secretary of Economy (2012-2018), United Mexican States; Member, Adrienne Arsht Latin America Center Advisory Council, Atlantic Council

A powerhouse together.

“Together, Canada, Mexico and the United States make North America an energy, manufacturing, and innovation powerhouse. The USMCA helps unlock this potential, offering greater prosperity for these nations’ citizens and positioning democracies in North America to better shape global standards and compete with China.”

Damon Wilson, Executive Vice President, Atlantic Council

COVID will make implementation more challenging.

“The US-Mexico-Canada Agreement will bring much needed certainty for the millions of US workers who depend on trade with Mexico and Canada for their jobs. It’s a result of bipartisan compromise with important new provisions for labor rights, rules of origin, and updates to make this an agreement for a new economy. But implementation will not be easy especially in the midst of a pandemic. Businesses of all sizes will have to readjust to new provisions, the new rapid response labor mechanism will quickly be tested, and questions on the exact formula for calculating USMCA rules of origin compliance will be top of mind for the many businesses who depend on the inter-connected supply chains. Getting implementation right is critical as we work to build out of economic contraction.”

Jason Marczak, Director, Atlantic Council’s Adrienne Arsht Latin America Center

More certainty for North American energy investment.

“USMCA launch day comes at an auspicious time for energy markets. Following a precarious several months due to the impact of COVID-19 on energy demand and oil and gas prices, USMCA should provide some optimism by solidifying one of the largest integrated energy relationships in the world and not doing much to upset the energy status-quo set by its predecessor, NAFTA. Introducing an additional level of certainty for energy investment by protecting dispute mechanisms and providing a framework to support liberalization, particularly at a moment when markets are looking at pathways for post-COVID recovery, further strengthens the value of USMCA as Mexico City, Washington, and Ottawa move to implementation.”

Reed Blakemore, deputy director, Atlantic Council’s Global Energy Center

New agreement establishes high standards for future deals.

“USMCA implementation arrives at an opportune moment, during a dreadful year for global trade and the global economy. The treaty establishes concrete commitments and next-generation standards regarding strategically significant 21^st century trade policy priorities such as intellectual property, labor rights, supply chain management, data transfers, and pharmaceuticals production amid ongoing—and increasingly difficult—global WTO reform negotiations. The increased prominence provided to pharmaceuticals and medical supply production issues this year during the pandemic underscores the strategic importance of more diversified supply chain relationships. The USMCA will help accelerate supply chain diversification as it goes into force today. The treaty seems also likely to provide a foundation for economic security and diversification in Mexico and Canada amid a global shift away from carbon-based energy that will take a toll on their economies in the near term. Many additionally hope that the energy, pharmaceutical, and labor market provisions together with tough new enforcement mechanisms will create concrete incentives for sectoral reform in the North American region.

“The multi-decade shift towards regional (rather than global) trade agreements has been accelerated by the regrettable and troubling rise of economic nationalism in the United States and other countries around the world. Part of that rise relates to perceptions that the benefits of global economic interoperability deliver asymmetric benefits. Part of the backlash against global trade also relates to perceptions that classic trade agreements do not adequately address modern regulatory and policy priorities associated with the increasingly digital knowledge economy. The USMCA, for all its faults, establishes high standards that can help forward-looking trade negotiators in Geneva and the Ottawa Group advance free trade priorities regarding intellectual property and data transfers at the global table alongside advanced labor and other regulatory standards.

“Finally, the USMCA goes into force just in time to provide a deeper foundation for potential cross-border economic cooperation as European, Japanese, and North American leaders sharpen their efforts to challenge China’s alternative vision for how the global trade and economic relationships should function.”

Barbara C. Matthews, nonresident senior fellow, Atlantic Council’s Global Business and Economics Program

An occasion for optimism for the whole neighborhood.

“The world over, but especially in Central America, nations outside of USMCA are preparing for the debut of the hemisphere’s remodeled economic engine. Pre-pandemic baselines and projections for growth and job creation are shattered, but no matter how slowed and stormy the years ahead are, the centrality of North America to the trade flows and the economic opportunity of the whole neighborhood remains. Compounded by the trending regionalization of supply chains, USMCA entry into force is an occasion for optimism south of the (Mexican) border.”

Maria Fernanda Perez Arguello, Associate Director, Atlantic Council’s Adrienne Arsht Latin America Center

USMCA will deepen regionalization of supply chains.

“The implementation of the USMCA takes place in the middle of a rethinking about global supply chains following disruptions caused by the COVID-19 pandemic as well as escalating political and trade tensions between the United States and China. Companies worldwide have begun to find ways to improve the resilience of their operations, including by streamlining and shortening their supply chains. In addition, there has been an effort to bring production closer to their customers in big markets. These factors have given rise to a regionalization of production, correcting to some extent the earlier globalization. The USMCA, in particular its higher local (regional) content requirements for auto parts, will reinforce the regionalization tendencies—basically diverting some trade and foreign direct investment from outsiders to benefit the three North American members. For example, while US imports from China declined by 16 percent (or by $87 billion) in 2019 compared to 2018, US imports from Mexico increased by 3.5% ($11.6 billion). Many companies, including from China, have announced plans to invest in Mexico. As a comparison, US imports from Vietnam rose by 35 percent ($17.5 billion) in 2019—both Mexico and Vietnam have been mentioned as “winners” among emerging markets countries in the US-China trade war.”

Hung Tran, nonresident senior fellow, Atlantic Council’s Global Business and Economics Program

Despite USMCA, North America may see more confrontation on energy.

“While the arrival of USMCA on July 1 will have many benefits for the North American economies generally, for in the energy sector, confrontation rather than cooperation is more likely unless steps are taken to preemptively resolve escalating disputes. On the positive side, after years of uncertainty on whether “new NAFTA” or “no NAFTA” would prevail against the back drop of heighten political tensions, USMCA coming into force on July 1 reaffirms the legal foundation upon which millions of jobs rely and decades of intricate supply chains have been built. USMCA can also be a needed booster shot for three economies ailing under coronavirus. Global dislocations in trade and enhanced imperatives for resilient supply chains create significant new opportunities for North America’s integrated supply chains to outcompete global rivals.

“Energy cooperation can be a significant competitive advantage for each of the USMCA economies. North America’s abundant, low-cost natural resources, backed by efficient capital markets and developed infrastructure, can affordably power economic recovery. The global energy system is in transition to be more diverse, efficient, and cleaner. North America is well-positioned to be the global leader in innovation, manufacture, and deployment of new energy technologies to define that transition. USMCA lays the legal basis for further commercial integration on energy, and maximizing benefit of that foundation requires enhanced policy and regulatory dialogue, including to bridge the gap on areas such as national climate policies and infrastructure permitting.

“For energy, however, the dawn of the USMCA era threatens to be mired in confrontation rather than cooperation. The crux of concern is Mexico’s slide away from fair treatment of US and Canadian energy exports and companies investing in Mexico. For example, companies report having import permits slow-rolled, thus limiting access for natural gas and refined oil product exports at a time of severe distress in the industry. Renewable power advocates are concerned by recently introduced rules that would give preferential treatment to state-owned CFE over cheaper renewable power, thus locking Mexico into use of expensive and polluting fuel oil. Those are just two examples of how President López Obrador’s more nationalist energy agenda threatens to cross a line from Mexico asserting legitimate sovereign policy-making into the realm of prohibited violations of USMCA fair treatment rules. With leaders scheduled to meet next week, there is still room for these budding issues to be put to rest and confrontation to be avoided.”

Neil Brown, senior fellow at the Atlantic Council’s Global Energy Center, formerly senior advisor for energy at the Senate Foreign Relations Committee.

NAFTA’s successor is about to take effect. Here’s why it will be good for North America—and bad for the WTO

By Hung Tran

While the USMCA preserves free-trade flows among the three member countries, its use by the United States as a template for future trade negotiations, starting with the EU and the United Kingdom, would have a far-reaching effect on future developments of world trade.

Mexico Trade

New Atlanticist Apr 24, 2020

USMCA needs TTIP

By Marc L. Busch

Upgrading NAFTA was a long time coming, but things are different than they were in 1994 because Canada and Mexico have bilateral trade agreements with the European Union, and the United States doesn’t. The United States needs TTIP to make the most of USMCA.

European Union Mexico

New Atlanticist Dec 13, 2019

How the USMCA impacts transatlantic trade policy

By Barbara C. Matthews

The attention today rightly sits with the breakthroughs regarding the labor and environment provisions of the USMCA. But trade policy strategists in Europe and the United States should not delay in using the USMCA’s digital trade chapter as a catalyst to define new foundations for cross-border trade in data and services which will drive economic growth and innovation for the foreseeable future.

Digital Policy European Union

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NAFTA’s successor is about to take effect. Here’s why it will be good for North America—and bad for the WTO

Hung Tran — Mon, 29 Jun 2020 13:22:53 +0000

The United States-Mexico-Canada Agreement (USMCA) will take effect on July 1, 2020, replacing the North America Free Trade Agreement (NAFTA). The USMCA features several important changes while maintaining trade flows worth $1.2 trillion among the three-member countries.

It is the latest of the 303 regional trade agreements (RTAs) currently in force—whose rank is likely to increase in the foreseeable future. The RTAs have hollowed out the World Trade Organization (WTO), and this process is likely to accelerate going forward. About half of world trade is now covered by the RTAs, reducing the scope and relevance of WTO rules and tariff schedules, as well as its dispute settlement and appeal mechanism.

If the USMCA is used as a template for future US trade negotiations, that would hasten the regionalization of world trade, fragmenting the global trading system based on the WTO and marginalizing the organization.

Below are key features of the USMCA, most of which are new in a US trade agreement.

Auto parts rules of origin: raising the threshold from 62.5 percent to 75 percent (and 70 percent for steel and aluminum used in making parts).

Use of quota: while being frowned upon by the WTO, the USMCA contains side letters to exempt 2.6 million passenger vehicles each from Canada and Mexico from potential Section 232 tariffs (of the US Trade Expansion Act of 1962, threatened by the United States on national security ground) on an annual basis, and roughly current annual volumes of auto parts.

New labor requirements: 40 to 45 percent of auto parts must be made by workers earning at least $16 per hour by 2023—to be more comparable to the US average wage levels in this sector. Mexico has also passed labor reform law promoting the unionization and collective bargaining rights of their workers.

Agricultural markets: US farmers can have better access to Canada which has agreed to raise its tariff-free quotas on dairy, poultry, and egg products under its supply management regime.

Digital trade: for the first time, there is a full chapter on free digital trade in an FTA. The chapter prohibits import duties and other charges on electronically transmitted digital products; discriminatory treatment of cross-border data transfers; and forced data localization.

Dispute settlement: state-to-state disputes regarding a matter which arises under this agreement, or under another international agreement, including the WTO agreement, to which the disputing parties are party, are to be settled in a forum selected by the complaining party—giving it a choice of forum most favorable to its position, instead of automatically referring WTO disputes to the WTO dispute settlement system. Furthermore, if the formation of the arbitration panel (in a chosen forum) is being blocked by noncooperative responding parties, the USMCA Implementation Act (US Public Law 116-113) allows the United States to use its domestic laws to impose safeguards on any surges in imports from Canada and Mexico.

Dealing with state-owned enterprises (SOEs) and subsidies: requiring SOEs to compete on commercial basis and that any advantages such as subsidies enjoyed by the SOEs do not have adverse effects on US companies and workers. These provisions are more comprehensive than the WTO’s rules on subsidies and countervailing duties.

Dealing with a non-market economy: any member wanting to negotiate a free trade agreement with a non-market economy (as defined by a member—primarily aiming at China) has to keep other members informed; and upon conclusion of such agreement, the other members can withdraw from the USMCA with a six month notice.

Including a chapter on currency manipulation: this is the first time currency manipulation is included in a trade agreement. Traditionally, currency issues are dealt with by the US Treasury, normally in consultation with the International Monetary Fund (IMF) and its members.

Potential impacts of the USMCA

Several features of the USMCA can be viewed as representing the US template in future trade negotiations. Many of those features enjoy bipartisan political support and therefore are likely to stay beyond US President Donald J. Trump’s presidency. Specifically, US emphases on free digital trade, reducing tariff and non-tariff barriers to its agricultural exports, dealing with SOEs and subsidies, dealing with a non-market economy, preserving the US ability to enforce its trade laws in trade remedies—including the anti-dumping, countervailing duties and safeguards laws, and currency manipulation can be found in the US Trade Representative’s negotiating objectives vis-a-vis the United Kingdom and the European Union (EU).

In addition to agriculture, there are new areas of frictions concerning the upcoming trade negotiations with the United Kingdom and the EU. The free digital trade emphasis in the USMCA would be at odds with the plan of many European countries (Austria, France, Hungary, Poland, Turkey, the United Kingdom, and others) to proceed with their national versions of a digital services tax after the United States pulled out of the multilateral negotiations sponsored by the Organization for Economic Co-operation and Development (OECD). The United States has threatened retaliatory tariffs on any country imposing digital taxes.

In addition, the USMCA emphasis on free cross-border flows of data would need to be reconciled with the EU General Data Privacy Regulation (GDPR). Obviously, the difference between the US position and China’s security-driven restrictions on cross-border flows of data is much more glaring.

Also problematic is the USMCA chapter dealing with non-market economies—this would complicate the EU’s effort to negotiate a Comprehensive Agreement in Investment with China as well as the United Kingdom’s desire to seek a trade deal with China. On top of those issues, the US threat of imposing Section 232 tariffs on automobiles and auto parts remains a major irritant in the negotiations.

For developing countries, in the context of its effort to tighten the self-designation as “developing countries,” if the United States makes regular use of its demands contained in the automobiles chapter, for example the requirement that 40 to 45 percent of auto parts have to be made by workers earning at least $16 per hour, that would dilute the comparative advantages enjoyed by developing countries in their efforts to promote foreign trade to industrialize their economies.

More generally, the emphasis on tightening rules of origin for auto parts will strengthen emerging trends toward regionalization. Many companies have taken advantage of technological advances, especially in automation, and followed a desire to be close to their customers by setting up local production facilities to supply large national or regional markets such as North America. Recently, this regionalization trend has received strong impetus from the US-China trade war and from efforts to diversify and streamline complex global supply chains due to disruptions caused by the COVID-19 pandemic.

Finally, quite detrimental to the integrity of the WTO is the USMCA use of quota in side letters (exempting current volumes of automobiles and parts imports from Canada and Mexico fro potential future tariffs); provisions for a complaining party to select the forum to settle disputes even if the matters arise under the WTO agreement; and preserving the US ability to use its domestic laws to remedy trade complaints. These will lead to a further marginalization of the WTO dispute settlement mechanism. Already the WTO Appellate Body has been rendered inoperative due to lack of the necessary quorum to hear cases since the beginning of the year. Furthermore, the United States has signaled its opposition to using WTO resources to support the alternative trade dispute appeal system recently launched by the EU, China, and eighteen other countries. The US opposition to the use of WTO resources to support activities benefiting a subset of the membership can also have a detrimental effect on the plurilateral approach—increasingly used by many WTO members trying to make headway in new trade negotiations with like-minded countries since the global multilateral approach has failed over the past decades.

In short, while the USMCA preserves free-trade flows among the three member countries, its use by the United States as a template for future trade negotiations, starting with the EU and the United Kingdom, would have a far-reaching effect on future developments of world trade. The global trading regime based on the WTO would shift more and more toward regional trading arrangements, in the process further fragmenting world trade and marginalizing the role of the WTO. This is all happening at a vulnerable moment for the WTO, which is going through a process of selecting a new director-general.

Hung Tran is a nonresident senior fellow at the Atlantic Council and former Executive Managing Director at the Institute of International Finance.

USMCA needs TTIP

By Marc L. Busch

European Union Mexico

New Atlanticist Dec 13, 2019

How the USMCA impacts transatlantic trade policy

By Barbara C. Matthews

Digital Policy European Union

New Atlanticist Dec 11, 2019

With bipartisan support, USMCA “can stand the test of time”

By Jasper Gilardi

“It is absolutely crucial for USMCA to be ratified with bipartisan support, and hopefully by including the Democrats in the process it will be an agreement that will serve the interest of all three countries for years to come,” said Jason Marczak, director of the Adrienne Arsht Latin America Center.

Mexico Trade

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Cosa Buena: A good thing for art and public health in Oaxaca

Amanda Forsey — Thu, 14 May 2020 17:15:54 +0000

In the city of Oaxaca, Mexico—known for its vibrant primary colors, iconic folk art and markets—one social enterprise has taken its relationship with local artists to a new level in the coronavirus pandemic, collaborating with them to create and design sustainable handwashing stations that serve as artistic sustenance as well as a public health measure.

Cosa Buena (which means “a good thing”) is a social enterprise in Oaxaca, Mexico that works with local artists to support the preservation of storied artistic traditions, and “to represent the depth of their cultural heritage and craft to outsiders.” Vera Claire founded Cosa Buena five years ago, with the aim of empowering Oaxacan artists and indigenous communities to navigate the international art and craft market without compromising the integrity of their beautiful work.

In normal times, they run critical literacy programs, gender equity workshops for female artisans, and art-focused cultural exchange programs and retreats. But when the coronavirus pandemic hit, travel ground to a halt, and the global economy took a hit. Soon the economic ripple effect also reached artists and artisans in Oaxaca.

Like many of us, Claire wondered if there was a way that she and Cosa Buena could help. “Personally, I was feeling a bit helpless but wanting to do something to support our community here through this crisis,” she said. “Preserving ancient crafts is a part of Oaxaca’s identity,” said Claire. “It’s not just what these communities do to make a living. It’s who they are.”

Mexico lacks equitable access to clean running water. “And so, you know, what does that mean in a pandemic when we’re being told washing your hands is one of the most important ways to protect yourself and others?,” asked Claire.

The idea to create handwashing stations to install at markets grew out of the reality of daily life in Oaxaca, where, Claire said, it was apparent from the beginning that many people do not have the privilege to be able to stay home and still be able to feed their families. “I began thinking, well what can we do to help support them, and handwashing was the number one recommendation. We immediately thought about local markets. Here in Oaxaca, local markets are a way of life, and people visit them very frequently, especially those who are living day to day. We zeroed in on markets as an area where risk could be high for transmission.”

Illustration by Cathryn Rose

Claire researched models of handwashing stations that had been implemented in densely-populated and low-resource settings, such as refugee camps. In consultation with recommendations from the World Health Organization (WHO) and the U.S. Centers for Disease Control (CDC), she and her husband developed a prototype that was approved by local authorities.

The model is operated by a foot lever, reducing the likelihood of COVID-19 transmission. The user only touches a bar of soap suspended by a rope.

In a matter of days, Cosa Buena pivoted from educational, art, and critical literacy progams to becoming a grassroots handwashing station factory. “We’re being given an opportunity now to really be creative and think of these solutions. We just hope that that inspires people — these are resources that are accessible and can be replicated across the world. It’s so needed now.”

Illustration by Cathryn Rose

Here, illustrator Cathryn Rose presents the materials needed for communities to build their own handwashing station, shown here in the Mixteco language from Tijaltepec.

“In early April, there were some public health officials going around with pamphlets listing the symptoms of coronavirus and preventative measures — and even those kind of public health advisories were not always reaching many communities because they’re only offered in Spanish,” said Claire.

In response to the gaps in access to public health information, Cosa Buena developed instructional materials in Mixteco and Zapotec languages for remote and rural communities wishing to build their own handwashing stations. The stations can be built with locally-sourced materials, at little cost: wood or branches, string, soap, and a container for the water. One model can be built into the earth, using tree branches and sticks.

On April 7, they installed the first handwashing station at Oaxaca’s Mercado la Merced, a food market famous for its delicious antojitos, ‘small cravings.’ Later designs would involve local artistry, but this one was simple and functional.

“Because that was the very first one, we wrote instructions in Sharpie on the actual station,” said Claire. The writing, in Spanish, translates as, “step on the pedal, wash your hands.”

Since installation, between 2000 and 3000 people have used the handwashing station.

“Oaxaca is a really unique place with an incredible amount of talent in terms of the traditional craft and artistry that’s being preserved here in all of these indigenous communities, and we also have a lot of contemporary artists and street art – it’s a huge part of the identity of the community here,” said Claire. With a view to creating a space for social expression, she asked local artists to paint the stations. “The response was really wonderful, and there were a lot of artists writing, saying “I would love to do this.” It’s become a beautiful way to connect with our community.”

Each artist prepared a short text to accompany their handwashing station, which also serves as a message for community solidarity and support. Here, the artist Bouler has created a piece entitled “Renacer” (“Reborn”), inspired by the spirit mezcal, produced in Oaxaca through a process handed down through generations; a process that is a labor of love.

“Reborn from the ashes like the heart of the maguey plant (agave) in the making of mezcal,” the text reads. “Thus humanity will be reborn from within, leading from the heart.”

Artist Yesca created this handwashing station, entitled “Unidad y Esperanza” (“Unity and Hope”). “We are the disease, we are the cure, unity and hope is the vaccine,” the text reads.

Illustration by Cathryn Rose

Alongside creating handwashing stations, Cosa Buena has also run a campaign informing people how to correctly wear, remove, and dispose of masks. “We’ve been really conscientious about representation and making the drawings look like people in the communities — using their languages, making the content feel familiar. I think that’s so important in public health messaging,” said Claire.

This drawing of a grandmother correctly wearing a mask was based on a photo of one of Cosa Buena’s community partners. “When I sent the drawing to her family, they were just thrilled about it,” she said.

Public health crises are not only crises for science and medicine, but crises of human connection. In the midst of them, we should not overlook the healing quality of art. Cosa Buena’s handwashing stations offer both form and function, meeting an important public health need while also providing artistic sustenance.

“We are all going through so many different emotions, internally trying to understand our place our role in this pandemic,” said Claire. “I think a lot of us understand that while all in the same storm, we’re not in the same boat. This pandemic has made disparities and inequalities within society very apparent. And I think art is a way to bring us together. Really, this was just an idea that popped in into my head and I’m so pleased with how it was received. People here have reached out and said, Oh, it’s so lovely to see them painted, and in our city that’s so full of color, it’s become another way for people to process and communicate what they’re feeling and what they hope for our community.”

To illustrate that last idea, here’s a handwashing station by artist Karel Muñuzuri. “Life is fragile, we hang from a pendulum with a thread of water,” the text reads. “The global situation that threatens us today presents a reality none of us could have imagined. Let us never forget that in difficult situations, development and community participation is the essence of our nature to solve problems and art, to sensitize the community and thus create sensible solutions. A community without art ends up destroying itself. “The ends and the means are not separable,” insisted Gandhi. “The means are the ends.”

Learn more about Cosa Buena and how you can support their COVID-19 social impact project

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The post Cosa Buena: A good thing for art and public health in Oaxaca appeared first on Atlantic Council.

Busch in The Hill: A vote against the WTO is a vote against Trump’s trade priorities

Marc L. Busch — Mon, 11 May 2020 18:30:05 +0000

The post Busch in The Hill: A vote against the WTO is a vote against Trump’s trade priorities appeared first on Atlantic Council.

USMCA needs TTIP

Marc L. Busch — Fri, 24 Apr 2020 13:19:24 +0000

The rumor is that the United States-Mexico-Canada Agreement (USMCA) will enter into force in the United States on July 1. The occasion will be met with a sigh of relief, giving its predecessor, the North American Free Trade Agreement (NAFTA), a new lease on life.

But the work is just starting. That’s because the success of the USMCA will require that the United States sign yet another agreement: The Transatlantic Trade and Investment Partnership (TTIP).

This is the untold story of USMCA. Upgrading NAFTA was a long time coming, but things are different than they were in 1994 because Canada and Mexico have bilateral trade agreements with the European Union, and the United States doesn’t. The United States needs TTIP to make the most of USMCA.

This reality has been hiding in plain sight for years. The Canada-European Union Comprehensive Economic and Trade Agreement (CETA) went into force in 2017, cutting 99 percent of tariffs. One year later, the EU and Mexico upgraded their 1997 Global Agreement with a deal on goods, services, and government procurement, among other issues. This leaves the United States as the missing link. Why does it matter?

Imagine a US company that manufacturers widgets. USMCA ensures this company zero tariffs in Canada and Mexico. But if the company were to move to Canada or Mexico, it would also enjoy zero tariff market access to the EU under CETA or EU-Mexico, while still being able to ship back to the United States at zero tariff under USMCA. This is called an “inversion.”

The answer is TTIP. Think of TTIP as completing a transatlantic free trade area. Without it, you get USMCA-inspired inversions from the United States.

The risk of this incomplete triangle has been staring Washington in the face for years. The first round of TTIP negotiations took place in 2013 and ran through 2015, only to fall victim to the politics of 2016. The shame in this, quite apart from fears of inversions, is that the agreement was shaping up to be the best the United States has ever negotiated. Indeed, given the nature of US-EU trade, the deal myopically set its sights on correcting the most vexing market access problems.

EU politics didn’t help things. The realization that TTIP would allow US firms to compete on par in Europe, and even have a greater voice in regulatory politics across member states, did much to undermine Brussels’ negotiating authority, which has since lapsed.

Is there a way forward? Skeptics will insist that there is no political appetite for TTIP on either side of the Atlantic. Perhaps. But the reality is that not signing TTIP will be more costly for both sides, both commercially and politically. After all, EU firms have the same incentive to relocate to Canada or Mexico as US firms.

A new narrative will be needed, one that moves away from concerns about competing against low-wage labor and instead focuses on state-of-the-art concerns, like services and intellectual property.

The text of CETA can help in this regard. It contains provisions that will appeal to trade skeptics worried about labor and the environment, and win over trade proponents looking for modern obligations that go well beyond those of the World Trade Organization.

Is this the time to talk honestly about USMCA’s need for TTIP? The easy answer is no, first and foremost because the United States is gearing up for elections in November. That said, the coronavirus pandemic is raising axiomatic questions about how to reopen the economy, in addition to concerns about the proliferation of export restrictions.

USMCA brings predictability and stability to the supply chains that crisscross North America. Yet given CETA and EU-Mexico, the fact is that USMCA will fall short without TTIP. US politics is no more immune to international pressures than US commerce. The case for TTIP reflects the confluence of both.

Marc L. Busch is the Karl F. Landegger professor of international business diplomacy at the Edmund A. Walsh School of Foreign Service at Georgetown University and a nonresident senior fellow in the Atlantic Council Scowcroft Center for Strategy and Security’s Transatlantic Security Initiative.

Sanitizing supply chains can jumpstart coronavirus-ridden transatlantic economy

By Barbara C. Matthews

Transatlantic policymakers must urgently find new ways to address this deepening crisis at the core of the interdependent economy that delivers economic growth and jobs. This requires finding ways right now to reactivate supply chains and increase confidence in supply chain control processes throughout this crisis.

European Union International Markets

Insights & Impact Feb 5, 2020

Europe to take center stage in global trade talks

By Hung Tran

With the “phase one” trade deal behind them, the United States and China will now probably shift attention to sorting out their economic and trade relationships with Europe. Caught in the middle of the US-China trade war and geopolitical competition, the European Union (EU) has tried to steer an independent course, balancing security and geopolitical concerns with economic and business needs. Doing so, however, has exposed many differences vis-a-vis the United States as well as China.

China European Union

New Atlanticist Jan 27, 2020

How the transatlantic trade agenda can get its groove back in 2020

By Barbara C. Matthews

Transatlantic policymakers should not waste this opportunity to redefine the transatlantic relationship. Leaders looking for traction should learn from the recent past and chart a different trajectory this year. In particular, they should acknowledge that different interests exist, focus on economic areas where interests align well, and pragmatically maximize efforts to align commitments.

European Union Trade

The post USMCA needs TTIP appeared first on Atlantic Council.

US-Mexico security cooperation after the COVID-19 shocks

Pablo Reynoso Brito — Fri, 17 Apr 2020 15:31:27 +0000

In the post-coronavirus (COVID-19) world, US-Mexico security cooperation will continue to be critical for North America’s stability and prosperity. Leading thinkers are debating whether the post-pandemic world will be more globalist or nationalist. In North America, a collaborative approach to improve security is key for a peaceful, prosperous, and competitive region.

The current health and economic crises might impact Mexico’s security in three ways: first, by causing social instability; second, by straining law enforcement resources in marginal regions; and third, by flaring up the migration crisis.

Scarcity and discontent may cause social unrest. While this is unlikely to affect the whole country, some areas—like densely populated suburbs—are particularly vulnerable. Some have used social media to call for massive store-lootings, a practice that began in 2017 when participants robbed nearly 250 stores after the government raised gasoline prices. Besides, the presence of violent groups—often hired by political operatives—that infiltrate and delegitimize peaceful protests to trigger violent police responses increases the risk of clashes between government forces and protesters.

This year, Mexico will have fewer fiscal resources to strengthen its rule of law. According to the International Monetary Fund (IMF), Mexico’s gross domestic product (GDP) will decrease by 6.6 percent in 2020, whereas Bank of America forecasted a contraction of eight percent. Meanwhile, Mexico’s Secretariat of Finance estimated that the federal government is expecting a reduction of 4.4 percent in tax revenue this year. These figures suggest that Mexico will have fewer economic resources for security, even after the enhanced security budget for 2020.

Moreover, law enforcement agencies will also suffer from staffing strains. On April 14, elements of the Mexican armed forces were deployed to support public security in Mexico City, where more than 2,184 police agents were sent home due to health concerns.

As law enforcement focuses on the pandemic, homicides reached a new monthly record in March. Eduardo Guerrero, a security analyst based in Mexico, argued that while crime trends may vary due to the quarantine, the most relevant criminal organizations in Mexico will be able to resist the short-term losses of the quarantine and they will be key players in the coming months.

Governance may be hindered in marginal areas due to diminished resources. This can have tremendous social and political consequences since the delivery of health and development services to the poorest communities can be compromised. In turn, non-state actors such as Transnational Criminal Organizations (TCOs) can fill the gaps left by governments and increase their political capital—a perilous scenario for the Mexican federal and state governments, since TCOs could control humanitarian aid or compete with the state to deliver it. This can happen in some areas of Michoacán and Tamaulipas, where media outlets reported that drug cartels are distributing aid packages. Government authorities must be present in marginalized areas during the COVID-19 outbreak and its aftermath, and Mexican President López Obrador’s high approval ratings can be an opportunity to strengthen the bonds between underserved communities and the state.

Finally, the pandemic might affect migrants stranded in Mexico, adding human damage and compromising social harmony in border areas. Migrant shelters in Mexico often operate over capacity and face particularly high risks of contagion. If migrants are not safe in Mexico, the risk of contagion in border areas will significantly increase. Thus, the United States and Mexico must find creative solutions to shelter migrant communities, both for humanitarian reasons and for social stability.

Post-COVID-19 US-Mexico security cooperation

To help avoid these scenarios, the United States and Mexico must strengthen their security ties and continue with their security agendas. As former US Ambassador to Mexico Earl Anthony Wayne recommended before the COVID-19 outbreak, both countries should maintain and expand their bilateral security task forces, increase intelligence sharing to reduce the flow of weapons and illegal drugs across the border, and maintain the flow of US aid destined for security and rule of law.

The current situation presents an opportunity to explore other areas of collaboration. For example—as a US-Mexico Security Cooperation Task Force led by the University of California San Diego suggests—both countries could increase subnational security cooperation. Additionally, maintaining and enlarging collaboration and aid programs with Central America could improve the whole region’s stability by reducing migration flows.

After the COVID-19 crisis, the United States and Mexico might be more connected. Supply chains may become more regionalized, reducing dependence on China and other regions. Securing those supply chains will be critical for North American competitiveness. Moreover, the looming shocks of the current crisis will remind us of the transnational nature of security in North America. TCOs operating in Mexico are not a “Mexico-only” issue, they are also dependent on US illegal markets and the flow of guns to the south.

US-Mexico security cooperation after COVID-19 can be a positive-sum game. The coming environment will be challenging and will require stronger cooperation. Mutual security threats remind us that—regardless of historical or ideological differences—the bilateral security agenda is, after all, a shared project.

Pablo Reynoso Brito is a program assistant with the Atlantic Council’s Adrienne Arsht Latin America Center, where he focuses on Mexico.

What Mexico’s response to H1N1 can teach us about coronavirus and future pandemics

By Pablo Reynoso Brito

Coronavirus Mexico

New Atlanticist Apr 14, 2020

President Duque outlines how Colombia is handling dual coronavirus challenges

By David A. Wemer

For most countries around the world, the spread of the novel coronavirus (COVID-19) has strained resources and demanded singular attention from policymakers. For Colombia, this new crisis must also be juggled with the ongoing collapse of neighboring Venezuela, which has already seen 2 million Venezuelans seek refuge in Colombia. “We have had to manage two crises at the same time,” President Iván Duque explained on April 14, which forced Colombia to take drastic measures to contain coronavirus earlier than many of its neighbors.

Colombia Coronavirus

New Atlanticist Mar 23, 2020

What Latin American countries are doing to confront coronavirus

By David A. Wemer

As governments in North America, Europe, Asia, and around the world continue to combat the spread of the novel coronavirus (COVID-19), Latin American leaders are stepping up their efforts as cases are beginning to be documented in their countries. Although the number of cases across the region remains mostly lower than the epicenters in Europe and the United States, “we are not letting our guard down,” El Salvador’s Minister of Foreign Affairs Alexandra Hill Tinoco said on March 23. “No one can guarantee us that it is not going to hit us,” she explained, so every Latin American government is taking the threat seriously.

Colombia Coronavirus

The post US-Mexico security cooperation after the COVID-19 shocks appeared first on Atlantic Council.

Trump lacks options in oil price war; Kissinger warns of “world on fire”

Frederick Kempe — Sun, 05 Apr 2020 21:49:46 +0000

Donald Trump has called himself a “war-time” president, referring to his campaign as commander-in-chief against coronavirus. In past days, he has taken on a new role as negotiator-in-chief trying to end the oil-price war that is endangering U.S. shale producers and hundreds of thousands of jobs.

This week’s result is an emergency, virtual meeting of OPEC leaders with Russia, Canada and Mexico. It was delayed from Monday until Thursday due to an ongoing Saudi-Moscow dispute about how to address the biggest collapse in global demand and prices since the discovery of the world’s first viable oil well in the mid-19^th century.

What’s decided at that meeting will say much about the limits to the leverage President Trump wields as the world’s leading oil and gas producer and with two authoritarian leaders in whom he’s invested so much – Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman.

It was the bitter Riyadh-Moscow battle for market share since early March that had prompted a record two-thirds decline in oil prices to $21.65 per barrel, the lowest point since 2002. Yet Trump’s intervention with both men last week, as described to CNBC’s Joe Kiernan, had seemed to pay off.

Trump said that he expected OPEC and the Russians to announce cuts of as much as 15 million barrels off the global total of 100 million. Markets rallied on Thursday and Friday to their biggest one-week gains ever of nearly 37% – only for investors to wake up this weekend to continued Saudi-Russian sniping and the possibility of a renewed price plunge this week.

What markets are missing in these radical swings is that a greater power than these three alpha males – Trump, Putin and MBS – is at work. They face the inescapable force of COVID-19, which for weeks and perhaps months to come will depress the global economy. April demand is thought to have dropped by more than 20 million barrels and perhaps by as much as 30 million – a far greater sum than any cuts producers may announce this week.

Never has the world experienced such a double whammy of demand shock and supply surge. In the end, it could be limits to global storage more than Trumpian intervention that shut off the spigots.

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Writing in Foreign Affairs, Pulitzer Prize-winning author and energy expert Daniel Yergin calculates that “virtually every available gallon of storage space in the world will be full by late April or early May. When that happens, two things will result: prices will plummet and producers will shut down wells because they cannot dispose of the oil.”

However this remarkable chapter in energy history ends, it’s revealing to study what was behind President Trump’s dramatic course reversal on how to approach the record decline of oil prices, which he on March 31^st called “the greatest tax cut ever given” the American consumer.

Some factors behind this U-turn were the persistent influence of 2020 electoral politics, the little-known role of former Energy Secretary Rick Perry and a threat to a Saudi-owned Texas refinery, and the lobbying power of the American energy industry (and some 2.5 million jobs it’s estimated to create).

President Trump began to reverse course when confronted by aggressive lobbying by American oil companies and shale producers that he should apply more pressure on his Russian and Saudi friends to cut their production. His concerns grew further when confronted by the potential impact of energy company bankruptcies on U.S. employment and his own November electoral chances, particularly in Texas.

Most intriguing, as the Financial Times reported Friday, a key individual behind the President’s apparent turn was former Texas Governor Rick Perry, who was Trump’s energy secretary until the end of last year.

Though Perry had established good relations with his Saudi partners, he advocated that the U.S. block Saudi crude from reaching North America’s biggest refinery in Port Arthur, Texas, which is fully owned by the Saudis.

Speaking to Fox News on March 31^st , Perry said he would advise Trump to tell U.S.-based refineries to use only American-produced crude for the next two to three months. That would send a “clear message that we’re just not going to let foreign oil flow in here,” Perry said.

Shale producers had been lobbying the White House at the same time to suspend U.S. military aid to Saudi Arabia and impose further sanctions on Russian energy until the new countries cut their production. They also argued that the President should consider lifting some existing Russian sanctions should Putin play ball and back off his campaign to put them out of business.

However, it appears to have been the threat to the Saudi refinery and to its overall relations with the United States that got Riyadh’s attention. When confronted by the possibility that Putin and the Saudi crown prince might not deliver on their production cuts this weekend, Trump upped the ante on Saturday and said he would impose tariffs on oil imports to “protect” U.S. energy workers from an oil price crash.

This would be a win for the smaller and mid-sized producers versus the United States’ oil majors, who have opposed punitive tariffs.

At the same time, President Trump may need to determine how he can deliver on Saudi demands for U.S. production cuts, lacking any direct ability to influence American producers. The two likeliest options would be a voluntary decision of the Railroad Commission of Texas, which regulates the state’s oil and gas industry, or a shutdown of Gulf of Mexico platforms and their 1.8 million barrels daily, using the threat of coronavirus to their workers as the reasoning.

The uncomfortable fact for President Trump is that despite his long-standing criticism of the OPEC and his support for free energy markets, he needs the cartel’s market intervention to keep shale producers afloat.

President Trump doesn’t have good options. He lacks easy leverage over the players, domestic and international, and he’s got even less control over the COVID —19 economic hit.

In the end, it is more likely that a U.S. government bailout will save the industry, rather than a global market intervention.

This article originally appeared on CNBC.com

Frederick Kempe is president and chief executive officer of the Atlantic Council. You can follow him on Twitter @FredKempe.

Inflection Points

Mar 7, 2020

Coronavirus is already changing the world

By Frederick Kempe

The first returns are in regarding how the coronavirus episode might change the world. No doubt the virus is a curse, but it also could be a blessing if politicians and voters heed its lessons. As Winston Churchill said on the cusp of World War II, “Never let a good crisis go to waste.”

Coronavirus Crisis Management

MUST-READS FROM A WORLD IN TRANSITION

Russian President Vladimir Putin wearing protective gear walks at a hospital for patients infected with coronavirus disease (COVID-19) on the outskirts of Moscow, Russia March 24, 2020. Sputnik/Alexey Druzhinin/Kremlin via REUTERS ATTENTION EDITORS – THIS IMAGE WAS PROVIDED BY A THIRD PARTY. TPX IMAGES OF THE DAY

This week’s must-read comes from Henry Kissinger, who at age 96 delivers the most powerful mission statement for the Atlantic Council and warning for the United States simultaneously.

“The historic challenge for leaders is to manage the crisis while building the future,” he concludes. “Failure could set the world on fire.”

Also, don’t miss former FT editor Lionel Barber’s reflections on our changing world in the UK Spectator, Dan Yergin’s brilliant guide to the oil price war in Foreign Affairs, and Ana Palacio’s concerns about COVID-19 and democracy in Project Syndicate.

If you don’t think saving lives and the economy can be done at the same time, read Rajiv Shah and Paul Romer’s novel look at a different sort of testing from the Wall Street Journal.

#1. KISSINGER’S MUST-READ WARNING

The Coronavirus Pandemic Will Forever Alter the World Order
Henry A. Kissinger / WALL STREET JOURNAL

Speaking with a friend this week, I said that the voice we most needed to hear right now was that of Henry Kissinger. Then in the Saturday Wall Street Journal I found one of the most significant statements he’s made in his 96 years.

Read every word, starting with his time as a young infantryman during the Battle of the Bulge, but the two most important paragraphs are the following:

“No country, not even the United States, can in a purely national effort overcome the virus. Addressing the necessities of the moment must ultimately be coupled with a global collaborative vision and program. If we cannot do both in tandem, we will face the worst of each.”

Building off this, he concludes with a warning:

“We went on from the Battle of the Bulge into a world of growing prosperity and enhanced human dignity. Now, we live an epochal period. The historic challenge for leaders is to manage the crisis while building the future. Failure could set the world on fire.” Read More →

#2. NOTHING WILL REMAIN THE SAME

How will the world be changed by the war against coronavirus?
Lionel Barber / THE SPECTATOR

It was good to see my friend of many years, the former FT editor Lionel Barber, reflecting in the UK’s Spectator on how “the world as we have known it for the past 40 years has come to a stop.”

He raises the provocative question: “Will March 2020 be remembered like the Great Crash of 1929 or the end of World War Two in 1945, events which catalyzed radical changes in the way economies and societies were organized across the world.”

He considers the potential answers from the future of globalization and the European Union to the potential impact on America’s election and emerging markets. What’s clear: nothing will remain the same. Read More →

#3. “A MARKET OVERWHELMED”

The Oil Collapse
Daniel Yergin / FOREIGN AFFAIRS

Emerging-Market Petrostates Are About to Melt Down
Amy Myers Jaffe / FOREIGN AFFAIRS

If Henry Kissinger is the person to whom one turns on threats to the global order, then Dan Yergin is my author of choice in navigating the energy world.

“The global oil market has never in history collapsed as precipitously as it has right now,” he writes in Foreign Affairs, brilliantly guiding the reader through the events of the past weeks that have landed us there.

“With much of the global economy at a standstill, the oil crisis is going to get worse in the weeks ahead,” he writes. “Some of that might be the result of the coronavirus infecting and disrupting operations in different parts of the world. Some if it might be the result of decisions by countries despite an era of fractious global politics. But the bulk of the decline will be the result of a market overwhelmed by the sheer fury of the coronavirus and the shutdown of the world economy.” Read More →

Also, don’t miss Amy Myers Jaffe, also in Foreign Affairs, dissecting the threat to emerging-market petrostates. Keep your eye on Ecuador, Iraq, Nigeria, and Mexico – and oil-linked debt woes that “could explode across the Middle East, Latin America, and Africa in 2020.” Read More →

#4. THE THREAT TO DEMOCRACY

Can Liberal Democracy Survive COVID-19?
Ana Palacio / PROJECT SYNDICATE

Former Spanish Foreign Minister Ana Palacio, also an Atlantic Council board member, contributes to the urgently needed conversation on how to defend democracy while conquering COVID-19.

“….the coming economic crisis will deepen doubts about western liberalism and weaken its position in the global contest of ideas that is currently underway,” she writes. “It is thus imperative that Western leaders not only limit the spread of COVID-19, but also foster social cohesion, devise a credible path back toward growth and normalcy, and reinvigorate the values and institutions that underpin liberal democratic societies.” Read More →

#5. NEW THINKING ON TESTING

Testing is Our Way Out
Paul Romer and Rajiv Shah / WALL STREET JOURNAL

Nobel Prize-winning economist Paul Romer and Rockefeller Foundation President Rajiv Shah suggest a novel approach to COVID-19 testing that could manage the virus in a more targeted manner and thus avoid a depression.

“Two types of testing will be essential,” they write. “The first test, which relies on a technology known as the polymerase chain reaction, or PCR, can detect the virus even before a person has symptoms. It is the best way to identify who is infected. The second test looks not for the virus but for the antibodies that the immune system produces to fight it…”

The authors argue that the two tests together will give policymakers the data to make smarter, faster decisions and better target efforts. Read More →

(They’ll speak on Wednesday at 11 am at an Atlantic Council virtual event, explaining their approach.)

PERSON OF THE WEEK

ATLANTIC COUNCIL TOP READS

New Atlanticist Mar 31, 2020

Europe’s economic emergency is also a geopolitical one

By Benjamin Haddad and Josh Lipsky

European leaders are deciding the future of European power on the world stage. If Europeans can’t ensure solidarity with each other after so much pain and sacrifice, it will not only be a devastating loss for Europe. It will also be a blow to a world looking for the political shape of a post-coronavirus world.

Coronavirus European Union

New Atlanticist Apr 3, 2020

American disaster, American resilience

By Daniel Fried

As we contemplate the road back from the coronavirus depression, we need to think big and fix things, at home and abroad. We’re still going deeper into an American disaster. But American resilience can get us out of it.

Coronavirus Economy & Business

New Atlanticist Apr 1, 2020

The coronavirus economic crisis: Supporting the weak links

By Hung Tran

In the present pandemic crisis, major countries have moved more quickly, offering more substantial monetary and fiscal support packages, including better targeted programs than in 2008-09. The challenge now is to quickly deliver the help to the weak entities which need liquidity the most. After all, any system is only as strong as its weakest link.

Coronavirus International Financial Institutions

The post Trump lacks options in oil price war; Kissinger warns of “world on fire” appeared first on Atlantic Council.

What Mexico’s response to H1N1 can teach us about coronavirus and future pandemics

Pablo Reynoso Brito — Wed, 25 Mar 2020 18:21:38 +0000

In early April 2009, several cases of “atypical pneumonia” were reported in Mexico City, caused by influenza type A, sometimes called the swine flu and denominated as A(H1-N1). While the A(H1N1) and novel coronavirus (COVID-19) crises are different in magnitude and were caused by viruses with different levels of lethality, Mexico’s experience with the A(H1N1) can offer valuable lessons for current disruptions.

On March 23, Mexico officially entered phase two of COVID-19’s outbreak, which means that the virus is now locally spreading and not imported from other regions. In response, the current administration is taking measures such as releasing public funds to enhance the National Defense Plan III (DN-III)—which allows the use of military assets against natural disasters—credits for small businesses, and agreements with the private sector to alleviate effects on workers. During the COVID-19 crisis, it is important to look back on the A(H1N1) experience.

The 2009 A(H1N1) pandemic had devastating economic implications in Mexico, just as COVID-19 is having on the global economy. In 2008, Mexico’s gross domestic product (GDP) grew by 1.14 percent. A year later—after the A(H1N1) crisis—its GDP growth fell to -5.28 percent. Moreover, the A(H1N1) outbreak coincided with the effects of the 2008 financial crisis, when Mexico lost a significant amount of exports to the United States. Both events contributed to a tough year for the Mexican economy and a report from the Economic Commission for Latin America and the Caribbean (ECLAC) estimated that the A(H1N1) outbreak triggered $9.1 billion in losses. Ninety-six percent of that amount was due to lower production and consumption of goods and services, while the remaining 4 percent accounted for the expenses to address the crisis. The cost of the pandemic was estimated at 1 percent of Mexico’s GDP in 2008.

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The A(H1N1) outbreak particularly impacted tourism—an important component of the Mexican economy due to its magnitude and its importance as a source of foreign currency; the tourism industry lost an average of 80 percent of its sales. After the first weeks of the quarantine, 90 percent of the country’s hotel and transportation reservations were canceled, along with 290 cruise ship arrivals. It was estimated that in 2009, Mexico lost $3.4 billion from touristic activities due to the pandemic. The most affected sectors after tourism were commerce and transportation with $3.2 billion and $1.2 billion in losses respectively.

Despite the economic sacrifice, Mexico was instrumental in containing the virus, and the World Health Organization (WHO) praised Mexico’s response for its international cooperation, its effective management of the crisis, and its transparency. For example, Mexico created an effective risk communication plan, launched a health promotion campaign, took measures to guarantee the supply of healthcare goods—including the reinforcement of a strategic stockpile—and promoted research and development.

Former President of Mexico Felipe Calderón wrote in his memoirs that government officials feared that the A(H1N1) could have had the lethality of avian influenza: around 60 percent. By early April of that year, Mexico City—then with 22 million inhabitants and a population density of approximately 5,900 inhabitants per square kilometer—had become the outbreak’s epicenter. A slow response to a virus with those levels of lethality would have been catastrophic.

On April 17, the Mexican government decided to act rapidly, issuing an epidemiological alert across the country. A few days later, all events that gathered large groups of people were canceled for at least thirteen days. In a country where more than 58 percent of the workforce depended on the informal economy, the measures threatened not only to devastate the economy, but cause tremendous social upheaval.

Macroeconomic policies in response to A(H1N1)

To mitigate the economic harm, the Mexican government responded with a set of fiscal measures, reducing business and individual taxes, cutting social security rates for workers, sending tax rebates of 25 percent to hotels and restaurants, discounting 50 percent of taxes for using airports and ports, creating a special fund for tourism promotion in coordination with state governments, and increasing financing for small and medium enterprises (SMEs).

In the following years, the Mexican economy recovered, growing by 5.1 percent in 2010 and an average of 3.2 percent from 2010 to 2015. Although many factors caused the recovery, sound government policies to mitigate the shock were paramount.

Lessons learned for COVID-19 and future outbreaks

There are at least four measures taken by Mexico during the A(H1N1) outbreak that are worth recalling for the COVID-19 crisis. First, international collaboration to conduct scientific analysis on samples, establishing protocols, and preparing for a more extended pandemic, is crucial.

Margaret Chan, then director-general of the WHO, mentioned in a high-level meeting on A(H1N1) in Cancún that “Mexico gave the world an early warning, and it also gave the world a model of rapid and transparent reporting, aggressive control measures, and generous sharing of data and samples.” It is worth highlighting cooperation between North American countries, Chan acknowledged, explaining that “Canada and the United States supported the early control measures in Mexico, and then followed this model of transparent reporting and generous collaboration as their outbreaks began to spread.”

Second, as argued by José Córdova—then-secretary of Health—the Mexican government was right to follow the National Preparedness and Response Plan for an Influenza Pandemic, a multisectoral plan established in 2003, anticipating an influenza outbreak under various scenarios. This plan was issued after the Mexican government included health security as a component of its national security doctrine and was developed by a high-level working group that included the secretary of National Defense and the secretary of Navy. The plan contained a multisectoral operating strategy with specific actions for each institution. By following this plan, the Mexican government signaled institutional coordination and maturity, which can provide order and certainty in times of crisis.

Third, a willingness to provide Mexican citizens with the best information available—and on time. By publishing statistics about the A(H1N1) outbreak, the Mexican government earned society’s trust, which allowed a responsible social reaction during the quarantine. Although criticisms have been made about overreaction, the Mexican government acted on the side of caution with the available information.

Finally, after managing the outbreak, the government implemented a series of targeted measures to stimulate affected economic sectors—especially tourism and SME’s.

In times of uncertainty, it is important to turn to historical experiences and critically evaluate what others did. Although the A(H1N1) and COVID-19 are different crises with different effects and scale, recalling previous experiences is illustrative. In 2009, Mexico erred on the side of caution, and while this generated criticism, it also showed how a responsible actor limited what could have been a much wider human and economic shock.

Pablo Reynoso Brito is a program assistant with the Atlantic Council’s Adrienne Arsht Latin America Center, where he focuses on Mexico.

How the coronavirus will impact Panama’s economy

By Cristina Guevara

Panama’s economy—currently precarious and stagnant—depends on infrastructure megaprojects, international trade, and financial services, making it especially vulnerable to external changes like coronavirus.

Coronavirus International Markets

AfricaSource Mar 24, 2020

What does the coronavirus mean for Africa?

By Bronwyn Bruton

Will the novel coronavirus prove even more deadly and disruptive in Africa? It depends on the country. Bronwyn Bruton identifies the key questions and sets the stage for the Africa’s Center’s ongoing commentary on the crisis.

Africa Coronavirus

New Atlanticist Mar 23, 2020

What Latin American countries are doing to confront coronavirus

By David A. Wemer

Colombia Coronavirus

The post What Mexico’s response to H1N1 can teach us about coronavirus and future pandemics appeared first on Atlantic Council.

Women protest for their lives: Fighting femicide in Latin America

Isabel Kennon and Grace Valdevitt — Mon, 24 Feb 2020 23:18:09 +0000

On February 9, 2020—only days before Valentine’s Day—twenty-five-year-old Ingrid Escamilla was murdered by her partner in Mexico. Photos of her body were splattered on newspapers across the country. Days later, seven-year-old Fatima Aldriguett Antón was tortured and killed, further sparking outrage. Thousands of protestors took to the streets in response to these killings—outside Mexico’s presidential palace, protestors called for concrete government action against the country’s femicide epidemic. They spoke out by throwing red paint onto the building and spray-painting the names of femicide victims on its walls.

Sadly, Ingrid and Fatima’s deaths are just a symptom of an all-too-common occurrence—every day in Mexico, ten women are killed on the basis of gender. Fewer than five percent of those murders are ever solved and the justice system rarely presses charges.

Calls for action are growing louder; the protests are calling attention to the Mexican government’s failure to release any plan to prevent femicides, as well as to the media’s coverage of the issue, which they say gives too much space to the abuser’s testimony and not enough respect to the victim’s life and body.

Mexico has legally distinguished femicide from homicide since 2012, applying a gender-based lens when looking at homicides of women. Seventeen other countries in Latin America have made similar distinctions for femicides, charges that often carry harsher punishments. However, this February, the Mexican government debated eliminating that distinction from their penal code, despite the attorney general reporting a 137 percent increase in femicides in the country over the last five years—four times more than other homicides. Facing backlash for comments blaming femicide on corruption and past economic policies, Mexican President Andrés Manuel López Obrador eventually conceded that he did not agree with the proposed changes to the penal code concerning femicide, and those changes have not been implemented.

But, femicides are not just common in Mexico—they are prevalent throughout the region. Global data is difficult to gather due to differences in reporting standards and data segregation practices, and published findings vary. However, the United Nations Office on Drugs and Crime (UNODC) aggregated data from 2018 of women killed by a partner or family member and found that African women are murdered at a rate of 3.1 per 100,000, with the Americas in second place at a rate of 1.6 per 100,000 women. The 2016 publication “A Gendered Analysis of Violent Deaths” reported that fourteen of the twenty-five countries with the highest femicide rates are Latin American. The Economic Commission for Latin America and the Caribbean (CEPAL) announced in November 2019 that they are working on a registration system for femicides that will account for all of Latin America and the Caribbean, so future data can be standardized.

Although specific rates vary widely, El Salvador (between 6.1 to 13.9 femicides per 100,000 women) and Honduras (between 5.1 and 32.7 femicides per 100,000 women) are consistently within the top five countries worldwide in terms of femicide rates. In areas of war or other conflicts, like in the Northern Triangle countries, it is more difficult to determine how many murders of women are gender-based, thus femicides, or casualties of conflict and thus homicides. Brazil sees the most femicides annually (over 1,200 in 2018, making its rate 1.1 per 100,000 women), but is sometimes excluded from data analyses because their system of registration and data storage for femicides is among the worst in the world. Colombia has seen an increase over the past two years in femicides, now experiencing an average of one femicide every two days. Argentina had the third-highest number of femicides in 2018 (255), a rate of 1.1 per 100,000 women.

Violence against women driving migration from the Northern Triangle

To effectively address migration from the Northern Triangle, states must better understand how it is driven.

Chile experiences lower rates of femicide than other countries—forty-five femicides in 2019 and another 107 reported attempts—but their protests against gender-based violence in last year made headlines for the chant “rapist in your path” (violador en tu camino). The song pinpoints the government—specifically the justice system—as complicit in the ongoing violence because of their lack of action against perpetrators and against the epidemic as a whole. This is a common sentiment, as demonstrated by the widespread use of the chant in Latin America and even Europe.

In Peruvian media, it has become impossible to avoid the topic of femicides. Cases occur every day, averaging more than 100 per year. Reports of attempted femicides are on the rise, likely affected not only by the actual frequency of the crime, but also by the increasing willingness of women and their families to report these events. The Peruvian government is working to incentivize women to report by providing them with a government-backed system of support. The media also work to make women feel safer by reporting not only on the crime, but also on the sentences that perpetrators are given—which can be up to thirty years.

With the 2016 creation of the national plan against gender-based violence, the Peruvian government publicly acknowledged the epidemic and placed it as a government priority for years to come. Several agencies with specialized task forces now work toward femicide reduction and prosecuting the abusers, including emergency centers for women, a hotline for victims of violence against women, and the Specialized Police Squad for Prevention Against Domestic Violence.

Infographic on Femicide in Mexico produced by Politico.mx. Data from the Secretary of Citizen’s Security and Protection of Mexico, and the Executive Secretariat of the National System of Public Security of Mexico. Available here.

Simultaneously, the Peruvian government is implementing long-term policies to break the cycle of violence for children who fall victim to domestic violence. Programs include a special unit that protects the rights of children orphaned by the murder of their mother, or for survivors that were disabled by the act of violence against them. The latest addition to this set of policies is a cash transfer to victims’ children, where the child’s caregiver receives 600 Peruvian Sol every two months ($177, or one-third of a monthly minimum wage). The Peruvian programs against femicide are new, so it is too early to determine their effectiveness. However, these programs appear rather comprehensive and other countries could benefit from following some of these initiatives.

To address and reduce femicides across Latin America, countries should consider the following recommendations:

Acknowledging the problem

The first step to action is official acknowledgement of the problem. Some countries have established Ministries of Women. Chile’s legislature declared December 19 as the National Day Against Femicide. The United Nations established a Spotlight Initiative in 2017 that raises awareness of violence against women and runs violence prevention programs in Latin America and Africa. Further increasing visibility of the femicide epidemic can help break down stigma against reporting acts of gender-based violence.

Establishing a clear legal framework for addressing cases of femicide

In addition to visibility, establishing a clear legal framework for reporting and prosecuting femicide is important to combatting the femicide epidemic. Legally distinguishing femicide from homicide allows for investigations to be conducted with a gender-based lens and for perpetrators of femicide to face distinct punishments. In Panama, the minimum prison sentence increases to twenty-five years for femicide, five more than for aggravated homicide. Honduras punishes femicide with thirty to forty years in prison, while aggravated homicide carries a sentence of twenty to thirty years. Mexico’s federal punishment for femicide is forty to sixty years and a fine, though their congress is voting to increase it to sixty-five—meanwhile perpetrators of aggravated homicide face thirty to sixty years, although a judge did sentence a murderer to life in prison in 2018.

Although it is increasingly common for countries around the world to distinguish gender-based violence from other crimes, few countries outside of Latin America—and none in Europe—use the word femicide in any legal capacity. In this, Latin America is leading the way, as seventeen Latin American countries currently have laws defining femicide and articulating specific sentences. Some, such as Mexico, however, require the crime to involve sexual abuse or for the perpetrator to be related to the victim in order for the crime to qualify as femicide. Only in January did Chile begin to include murders by boyfriends, in addition to husbands, in statistical reporting about femicide.

Placing restrictions on the definition also restricts the potential response. Defining femicide as the killing of a woman or girl on the basis of her gender encompasses all applicable acts of violence, while still segregating these crimes from homicides so that they may be more effectively prevented.

Establishing specialized offices or task forces for the prosecution of femicide cases

Establishing specific prosecution offices or other task forces that specialize in femicide—in the same way countries establish drug-related task forces or corruption organizations—is another important step that law enforcement can take. This will not only help with prosecution and prevention of femicide cases, but also sends a public message that the legal system takes these cases seriously. Recommending harsher sentences for perpetrators of femicide is only effective if those perpetrators can be caught and charged.

Working with media to shed light on perpetrators

Media dissemination of killers’ sentences will send the same message. Ensuring that there are resources available to women who report—and that they can access them—can also give victims the push to report abuse before it escalates to femicide.

Education as a long-term sustainable solution

For long-term reduction in femicides, education around gender-equality efforts is crucial. More education systems are beginning to include gender studies in their curricula, which educate boys and girls from a young age about the concept of equal rights. Though some of these programs face backlash, acknowledgement of gender-based violence, and education around the topic, will be an effective step toward eliminating the femicide epidemic in the region.

Isabel Kennon and Grace Valdevitt are interns at the Atlantic Council’s Adrienne Arsht Latin America Center.

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Trump’s bilateral trade deals are undermining the global trading system

Hung Tran — Mon, 13 Jan 2020 15:58:28 +0000

After three years of harsh rhetoric, unilateral tariffs, and export and investment control, US President Donald J. Trump’s muscular trade approach has borne some fruit—in the shape of the US-China phase-one deal (to be signed this week), the US Mexico Canada (USMCA) Trade Agreement (approved by the US House and awaiting passage in the US Senate); and the US Japan trade agreement (USJTA, entered into force on January 1, 2020). While temporarily lowering the temperature of the trade tensions, those agreements have not solved the fundamental problems of the United States’ economic relationships with these countries, in particular China, leaving them for future negotiations amidst continued uncertainty. More importantly but less widely appreciated is the fact that, in different ways and degrees, those bilateral agreements have undermined the global rules-based trading system.

For most of the post-war period until recently, the world has benefited from a multilateral trading system based on agreed rules defining the benefits and commitments of all members, together with a binding dispute settlement mechanism. This has bought transparency, reliability, and comparability of treatment to the world trading system, helping member countries trade with one another, reaping the benefits of comparative advantages. Indeed, such rule-based system— epitomized by the World Trade Organization (WTO)—had served as an engine of growth, with world trade growing on average at twice the speed of the global economy. Those gains, however, have not been distributed equitably, due to the failures of member countries to implement effective trade adjustment assistance measures and needed reforms to cushion the dislocations of many communities and workers. This has contributed to a backlash against the post-war world order, of which the WTO is viewed as a key institution.

Undermining the WTO

Given the discontent with this global trading system, it is important to note that the three deals mentioned above will undermine the basic tenets of the WTO. First and foremost, these agreements strengthen the role of dispute settlement mechanisms (DSMs) embedded in individual Regional Trade Agreements (RTA)s—these have become more definite and political, often eschewing independent arbitrators, compared to earlier generations of RTAs, many of which retained a degree of flexibility in choosing either the RTA or WTO systems to settle disputes. As RTAs continue to profligate—with more than 280 in existence covering half of world trade, according to a recent UNCTAD report—their DSMs will increasingly replace the WTO dispute settlement system in portions of existing trade now under different RTA rules, as well as in new areas of trade and services (especially digital trade). Coupled with the disempowerment of the WTO Appellate Body (having only one member left, thus lacking the necessary quorum for decisions), these developments have significantly marginalized the WTO.

In a more technical perspective, the USJTA appears to violate WTO rules. Article XXIV of the General Agreement on Tariffs and Trade (GATT) specifies that RTAs can be deemed compatible with the WTO if they reduce tariffs on substantially all trade. The USJTA, however, mainly deals with reducing tariffs for US agricultural goods, while excluding the auto trade. The USJTA does not even qualify as a WTO-sanctioned interim deal as it lacks a plan and a schedule for completion as a comprehensive trade agreement.

More substantively, the US-China phase one deal includes China’s commitment to purchase an additional $200 billion of US goods, including $40-50 billion per year of agricultural products, over the next two years. The almost doubling of China’s imports from the United States over a short period of time, if realized, will cause significant trade diversion and distortion in the global trading system. In particular, countries that had benefited from the tariff war by selling more to China in the past two years—for example, Brazil and Argentina in soybeans or Europe in manufactured products—will experience a reversal of those gains, if not more. More importantly, such a governmental commitment to purchase goods flies in the face of the notion of free choices by economic agents in a rules-based system, acting according to market signals to reap the benefits of comparative advantages. Furthermore, if the US administration seeks to use the same approach in dealing with the EU, that would lead to a dead end as the EU is in no position to promise anything like the Chinese commitment.

For its part, the USMCA reiterates the use of quotas, a form of quantitative restrictions generally prohibited by Article XI of GATT. The USMCA basically exempts the export to the United States of cars and car parts from Mexico and Canada up to current levels from any future US tariffs imposed on national security grounds. This follows the template of Trump’s first trade deal, the revised Korea-US trade agreement (KORUS 2…effective since January 1, 2019) which set quotas for the export of steel from Korea to the United States and of cars from the United States to South Korea. Moreover, the quota approach is likely to be employed by Washington again in dealing with Europe and Japan in automobile negotiations.

Last but not least, the USMCA also requires that 40-45 percent of the work producing cars for export from Mexico to the United States must be done by workers earning $16 per hour—three times the current wage of Mexican auto workers. This requirement undermines the comparative advantage of low wages that emerging markets and developing countries have relied on to implement their historically successful manufacturing for export development strategy. Good luck future “Asian” tigers!

Implications

Overall, the three early 2020 agreements have started to transform the multilateral rule-based system into a largely bilaterally managed, outcome-based system. RTAs and their new practices accelerate the fragmentation of the world trading system into numerous trading zones with different overlapping memberships and trade coverage, tariffs, quotas, and quantitative trade targets, plus other rules such as local content and country of origin requirements as well as dispute settlement processes. These will increase the complexity and costs of doing business, as well as decrease the efficiency of international commerce. Moreover, by ignoring the benefits of specialization in trade, the new practices will incur opportunity costs in terms of lowering growth potential—this will aggravate the distributive inequality fueling discontent with the WTO to begin with.

In particular, emerging markets and developing countries will suffer the most in the brave new world of managed trade. They will incur substantial administrative burdens (RTAs hardly contain any capacity building assistance provisions) and have their bargaining positions weakened in dealing with the major trading powers outside the transparent and equitable framework of a multilateral system. For those not belonging to any RTAs, they will soon find their cherished “most favored nation” status turning into “least favored nation” status, able to trade only on WTO terms instead of enjoying better conditions with the RTAs.

Hung Tran is a nonresident senior fellow at the Atlantic Council, and former executive managing director at the Institute of International Finance.

Could the United States and India find a path to collaborate on China trade?

By Mark Linscott

So why shouldn’t the Trump administration consider expanding its bilateral trade cooperation with India to initiate joint efforts on China, which could parallel existing efforts with the EU and Japan and possibly merge with them over time? Might this approach even lead to a new plurilateral negotiation in the World Trade Organization (WTO) that positions it as the most likely venue for tackling Chinese practices over the longer term?

China India

New Atlanticist Dec 16, 2019

“Phase One” agreement: Whither the US-China trade war?

By Hung Tran

The “phase one” deal represents a truce—welcome as it is—in the trade war but nowhere near a solution to the main challenges China poses to the United States and the world trading system more generally.

China Trade

New Atlanticist Dec 13, 2019

How the USMCA impacts transatlantic trade policy

By Barbara C. Matthews

Digital Policy European Union

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Conference call: US-Mexico-Canada Agreement (USMCA) deal reached

Frederico Froes and Pablo Reynoso — Sat, 14 Dec 2019 03:59:54 +0000

On December 12, 2019, the Adrienne Arsht Latin America Center and Baker McKenzie held a conference call to discuss the US-Mexico-Canada Agreement (USMCA). Two days earlier, on December 10, Congress, the Trump administration, and the Mexican government struck a deal on the USMCA modifications needed to proceed with the agreement’s ratification in the United States.

The speakers included Peter MacKay, a partner at Baker McKenzie who served as Canada’s minister of justice and attorney general, minister of national defense, and minister of foreign affairs, as well as member of parliament (1997-2015); Antonio Ortiz-Mena, vice president at Albright Stonebridge Group and former head of economic affairs at the embassy of Mexico in the United States; and Sabrina Rodríguez, trade reporter at POLITICO. Jason Marczak, director of the Adrienne Arsht Latin America Center at the Atlantic Council, moderated the conversation.

Sabrina Rodríguez began the call by highlighting the importance of the deal, recalling the many months of work that went into it, and the endorsement from critical groups such as the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO). When asked about the road ahead for the USMCA’s ratification in the United States, Rodríguez mentioned that if everything remains constant, the USMCA will get to the House floor by December 19.

Ortiz-Mena explained that in Mexico, the Senate needed to approve changes made to the USMCA, which were unanimously approved on December 12. He stated that such approval was not a concern, since it was a straightforward political process. He also added that Mexico benefits from labor regulations, given that improving labor conditions is a priority for Mexico’s government. However, Ortiz-Mena warned that, because the devil is in the details, it will be important for the Senate to carefully examine the implementation bill to ensure that it does not affect prior commitments between the three countries.

According to MacKay, Canadians may feel that they made concessions to reach an agreement with their neighbors. However, they can celebrate the security that comes with signing a new deal and having a modernized agreement to replace the North American Free Trade Agreement (NAFTA). Canada will wait until its southern neighbors ratify before they approve it in parliament. They may hold off on ratification until January.

Asked about the support of interest groups such as the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), Rodríguez noted that it is the first time the organization has supported a deal since 2001. However, certain labor unions, such as the International Association of Machinists, are still opposed to it.

By the end of the conference, MacKay added that based on his experience as attorney general, it may be important to pay attention to e-commerce, as well as internet regulations and enforcement.

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With bipartisan support, USMCA “can stand the test of time”

Jasper Gilardi — Wed, 11 Dec 2019 16:43:52 +0000

Just over a year since the US-Mexico-Canada Agreement (USMCA) was signed, and after long months of intense negotiations between US and Mexican trade representatives and labor groups, Congress and US President Donald J. Trump have agreed on the terms of the new North American trade pact, finding middle ground on the agreement’s stipulations on enforcement, environmental protection, prescription drug pricing, and working conditions in Mexico.

The USMCA is an update to the North American Free Trade Agreement (NAFTA), which entered into force in 1994. The USMCA includes new chapters addressing anticorruption efforts, digital commerce, and small and medium-sized enterprises, as well as minor updates to provisions on intellectual property rights and the dairy and auto industries.

The passage of USMCA will also add a layer of new certainty to the US-Mexico trade relationship. Under the old agreement Mexico and Canada continue to be top trading partners for the United States, cumulatively amounting to nearly $1.4 trillion of goods and services trade in 2018.

Jasper Gilardi from the Adrienne Arsht Latin America Center sat down with Atlantic Council experts to ask how the agreement will shape the tri-lateral relationship for decades to come.

Gilardi: The handshake agreement announced today follows weeks of negotiations between Mexio’s Deputy Foreign Minister of North America Jesus Seade, United States Trade Representative Robert Lighthizer, and the US Congress over the agreement’s enforcement stipulations, and environmental and labor protections. How will the protracted negotiations strengthen USMCA? And were US Democrats’ concerns justified?

Jason Marczak, director of the Atlantic Council’s Adrienne Arsht Latin America Center: “It is absolutely crucial for USMCA to be ratified with bipartisan support, and hopefully by including the Democrats in the process it will be an agreement that will serve the interest of all three countries for years to come.

“For many members of the Democratic party, labor enforcement is a critical issue in this agreement. Though there have been labor advancements announced as part of the USMCA, the critical question for many in the Democratic party has been: “Is Mexico really willing to enforce those provisions?”

“In Mexico, under President Andrés Manuel López Obrador (AMLO), it is actually in the president’s best interest to enforce many of the labor provisions in USMCA. Last year he came into office as a president that would serve the interest of Mexicans who have felt left behind, and they will be some of the top beneficiaries from the stronger labor enforcement provisions in the USMCA.”

Maria Fernanda Perez Arguello, associate director of the Atlantic Council’s Adrienne Arsht Latin America Center: “It’s not only important that this is a bipartisan deal, it’s also hugely important that the labor unions in the United states are, if not in favor of the agreement, not actively opposing it. Labor union support was always going to be a big part of Democrats’ concerns over Mexico’s ability to comply with its commitments.

“From day one López Obrador has recognized that labor reforms are a pragmatic priority, and the governmenthas allocated almost a billion dollars to his labor reforms, so I think that we can see that Mexico has been acting in good faith from the beginning.”

Marczak:“When NAFTA came into effect in 1994 it was immediately met with resistance. Ross Perot talked about the great sucking sound of US jobs flowing to Mexico during his presidential campaign two years earlier, raising the alarm bells about NAFTA. Many labor unions in the United States lined up against the accord. Fast forward eighteen years, and NAFTA became a rallying cry for Trump on the campaign trail. He tapped into anxiety about the overall trading relationship and the concerns that many workers felt about the future of their livelihoods.

“With bipartisan support we can ensure that USMCA can stand the test of time. And that is more likely to happen if a wide spectrum of stakeholders are on board from the beginning, or at least not actively opposing it. It’s critical for the longevity and legitimacy of the agreement moving forward.”

Gilardi: The sunset clause of USMCA is another significant update to NAFTA, how will its addition influence the function of the agreement? And will it add a level of turbulence to the stability of the agreement in years to come?

Marczak: Last November we hosted Jesus Seade, Mexico’s undersecretary of North America, at an Atlantic Council event forty-eight hours after the agreement was signed. That was the first time I heard him publicly address the sunset clause, and it makes sense. First, the clause’s six-year review interval ensures that no one administration can eliminate the agreement in one term. And, if all parties agree, USMCA can be extended for an additional sixteen years every six years that it’s reviewed. If there’s a disagreement, then all parties begin to work through it. The clause also builds flexibility into the agreement by making sure that things that aren’t working well can be addressed. Hopefully it will act as a forcing mechanism to make necessary changes to the agreement before they turn into larger concerns. It’s hard to know now what the state of play of the North American economy will be in 2025.”

Gilardi: The USMCA promises to deliver little in the way of economic growth. Are the updates worth the fuss?

Perez Arguello: “There was a huge economic bump from NAFTA after it came into effect. We went from zero to one thousand with NAFTA. The USMCA is not a rewriting of NAFTA but rather a modified agreement for the 21^stcentury. It would be unreasonable to believe that this updated version will have more than just a modest effect on gross domestic product (GDP) growth. The benefits are going to be more nuanced and subtle considering the current high degree of integration.”

Marczak: “The USMCA is important because it will put in motion critical updates for the future US economy, and it will be used as a template upon which future agreements will be built. Negotiating that template with two of our strongest allies makes a lot of sense. It is important to remember that trade agreements are about more than trade. They’re about bringing the United States closer to its allies.”

Gilardi: What lies ahead for USMCA and the ratification?

Marczak: “In the United States, implementing legislation must first be submitted. Then, the bill gets sent to the House Ways and Means Committee, which could send it straight to the full House for a vote. That vote may likely take place even next week. The bill then goes to the Senate Finance Committee and a full Senate vote before reaching the president’s desk. It’s important to note that in an era of hyper partisanship this deal got done with both parties working together and important compromises from our USMCA partners. I expect a deal signed into law soon after the New Year.”

Jasper Gilardi is a project assistant for the Adrienne Arsht Latin America Center at the Atlantic Council. Follow him on Twitter @gilardi_jasper.

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Marczak joins BBC World News to discuss violence in Mexico

Atlantic Council — Wed, 06 Nov 2019 17:57:58 +0000

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Unleashing US-Mexico opportunities: Featuring H.E. Arturo Herrera, Mexico’s secretary of finance

Frederico Froes — Mon, 28 Oct 2019 14:26:25 +0000

On October 18, the Atlantic Council’s Adrienne Arsht Latin America Center and the Global Business and Economics Program, in partnership with HSBC, hosted the event “Unleashing US-Mexico Opportunities: Featuring H.E. Arturo Herrera, Mexico’s Secretary of Finance.” After introductory remarks by HSBC’s Head of Global Banking for Latin America, Katia Bouazza, Secretary of Finance Arturo Herrera gave a keynote address on Mexico’s economy. This was followed by a discussion between Herrera and Representative Henry Cuellar (D-TX-28) on opportunities for US-Mexico economic integration. The conversation was moderated by Georgetown University’s Walsh School of Foreign Service journalist in residence and former CNN global affairs correspondent, Elise Labott.

In his address, Herrera highlighted the unique characteristics of the Mexican economy. With one of the lowest public investment rates in Latin America, Mexico has experienced slower growth than its regional economic peers at 2.9 percent, as well as striking developmental disparities between different states. He identified the “relatively shallow” financial sector in the country as an opportunity for improvement. This sector has not seen any significant change in the number of firms for the last 25 years. He also pinpointed low tax collection as a result of reliance on oil revenue and low female participation in the labor force as key challenges for Mexico’s economy. “We have to grow faster, and we need to grow in a much more equitable way,” the secretary acknowledged.

When Labott and Cuellar joined the discussion, the topic changed to the week’s World Bank meetings, in which Herrera had participated. According to the secretary, a common theme across meetings was the concern sparked by trade tensions and the shift away from the traditional rules-based, multilateral setting. He highlighted the importance of interconnected economies, as exemplified by the US and Mexican automobile industry. “The Río Bravo/Rio Grande doesn’t divide us (…), but actually unites us as two countries in so many ways,” complimented Cuellar. The congressman pointed out that it is in US interest to have strong neighbors. He is optimistic the United States-Mexico-Canada Agreement (USMCA) will be finalized this year.

On USMCA, Labott inquired about the treaty’s effect on investor confidence. She alluded to the recent statement published by Mexico’s central bank, which states that policy uncertainty is holding back investments from the country. “The worst thing you can do to a business is to have them wondering what is going to happen today,” reasoned Cuellar. USMCA will provide certainty on the rules for trade with Mexico, “the fact that we will be able to anchor one piece of very clear certainty on a very specific region of the world (…) is going to help attract investments to the region,” concluded Herrera.

The conversation then shifted to the digital economy, which is Mexico’s fastest-growing sector, according to Herrera. The trend in digital economic growth presents opportunities, including community connectivity, but also challenges, such as the logistics of taxing transactions. Unlike other countries, Mexico does not have a digital tax, but is in the process of implementing a withholding tax, the secretary announced. Cuellar added that “Congress does not move as fast as the business sector, and we are trying to catch up.” He also pointed out that US investors are a vocal presence in the Mexican digital sector.

When asked about the increase in Chinese investments in Latin America, Congressman Cuellar noted that China has been paying more attention to the region and that the United States should increase its consideration of Latin America. “40 percent of everything we export as a country goes to Latin America (…), but we do not pay 40 percent of our time to Latin America,” he admitted. In response to Labott’s question on how the United States can step in to make up for China’s neglect of human development, Herrera noted the current role of international trade institutions. “Now they [International Monetary Fund, World Bank] are concerned about human development, gender equality, indigenous rights, the environment.”

Regarding US-Mexico collaboration in Central America, Herrera explained that the issues of the Northern Triangle are similar to those Southern Mexico is facing. He cited the need for concerted investments between all regional partners, especially in human capital and infrastructure.

At the end of the conversation, Secretary Herrera highlighted the global economic climate as well as gender equality. Acknowledging the need to prepare for the slowdown of economic cycles, Secretary Herrera addressed the current global economic climate— “this is taking nobody by surprise, but there is very little appetite for cooperation.” On gender equality, Herrera addressed the intersection of economic, social, and cultural factors in female participation in the economy, calling for a strengthening of programs to alleviate women’s caregiver roles and citing the economic potential of a larger, more qualified labor force.

If you missed the event and would like to watch the webcast, click here.

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Transport infrastructure in southern Mexico and Guatemala: A step toward development

María Fernanda Pérez Arguello & Pablo Reynoso Brito — Fri, 25 Oct 2019 12:57:11 +0000

In the context of an unprecedented regional migration crisis and global economic uncertainty, Mexico and Guatemala must look for cooperative solutions to boost economic growth and alleviate the many social and economic factors driving migration. As highlighted by the Comprehensive Development Plan for Central America, a key area of potential collaboration could be transport infrastructure, especially in the underdeveloped regions of southern Mexico and northern Guatemala. The World Bank’s Logistics Performance Index 2012-2018, including indicators such as customs efficiency and road quality, ranks Mexico in the 53th place while Guatemala is at the bottom of the group, in the 115th place. The United States, in contrast, ranks at ten.

Improved transport infrastructure is crucial for several reasons. First, better-quality roads connect isolated populations and markets, which spurs increased trade. Roads can also have positive spillover effects on governance and access to public services such as security. On the flip side, limited access to the outside world hampers individual citizen’s ability to overcome poverty. The IDB reports that in Guatemala, the areas with higher rates of poverty rates have lower road density, reducing access to public services, like health, education, and justice. In addition, as communities improve their connectivity, they may be closer to watchdog organizations and the media, making them less vulnerable to abuses by governmental and non-governmental actors.

Transport infrastructure development in Southern Mexico and Guatemala can boost local economic development and reduce migration by creating local economic opportunities for citizens. A number of studies on citizens leaving Central America’s Northern Triangle cite a combination of lack of economic opportunities, rampant insecurity, and family reunification as driving factors of migration.

New infrastructure projects will inject much-needed investment during a time of low economic growth—especially important in Mexico, where the economy is predicted to grow between 0.2 and 0.9 percent in 2019. Infrastructure investment in Mexico is currently lower than the Latin American and Organization for Economic Co-operation and Development (OECD) averages.

An incoming president in Guatemala in January 2020 is the perfect opportunity to strengthen existing bonds and build common development policies. Following an initial meeting between Mexican President Andrés Manuel Lopéz Obrador and President-elect Alejandro Giammattei in September 2019, both leaders must lay the foundations for continued and increased cooperation and attract international support for transport infrastructure development. It will be important to create medium- and long-term development and cooperation mechanisms that extend beyond the Mexican government’s Comprehensive Development Plan for Central America.

AMLO’s administration has prioritized development in Southern Mexico to mitigate the migration crisis. However, infrastructure development policies must be based on technical studies that determine gaps, feasibility, costs, and implementation time. In Southern Mexico states like Chiapas and Oaxaca, where more than 70 percent of the population lives under the poverty line, transport infrastructure is particularly necessary. And the situation is not much different in Guatemala. An estimated 59 percent of Guatemalans live below the poverty line. In the Western Highlands region of Guatemala, three out of four people live under the poverty line. Sporadic collaboration and improvised projects will fail to address connectivity issues and regional development and will prevent citizens from migrating north in search of a more prosperous future.

In addition, the two presidents must also continue to mitigate mounting pressure from the United States with regards to migration enforcement by attracting foreign aid and seeking long-term solutions with the US government to mitigate unauthorized migration. Collaboration with multinational organizations like the World Bank and the Inter-American Development Bank would be central to develop transport infrastructure projects and boost development. By cooperating to improve the connectivity of isolated markets and communities, both countries can jointly address the migration crisis.

Addressing the factors that are pushing Central Americans northward—violence and public insecurity, corruption and impunity, and lack of economic opportunities, to name a few—must be done in a holistic, multinational, and multi-faceted fashion, as outlined in a 2017 Atlantic Council Northern Triangle Security and Economic Opportunity Task Force report. Developing a sound strategy to improve transport infrastructure in Southern Mexico and Guatemala, would be a first step towards a more prosperous region.

María Fernanda Pérez Arguello is an associate director with the Atlantic Council’s Adrienne Arsht Latin America Center, where she focuses on Central America, Mexico, the USMCA, and anti-corruption efforts.

Pablo Reynoso Brito is a program assistant with the Atlantic Council’s Adrienne Arsht Latin America Center, where he focuses on Mexico.

The post Transport infrastructure in southern Mexico and Guatemala: A step toward development appeared first on Atlantic Council.

Ratified USMCA key to unlocking Mexican growth

David A. Wemer — Fri, 18 Oct 2019 14:56:56 +0000

The United States-Mexico-Canada trade agreement (USMCA) will “clearly be an incredible boost” to the Mexican economy at a time when global trade uncertainty threatens to dampen growth prospects around the world, Mexican Secretary of Finance Arturo Herrera said at the Atlantic Council on October 18.

The USMCA, signed by US President Donald J. Trump, Canadian Prime Minister Justin Trudeau, and former Mexican President Enrique Peña Nieto in November 2018, is an updated version of the North American Free Trade Agreement (NAFTA) including new provisions on intellectual property, the dairy, auto, steel, and aluminum industries, and environmental and labor protections. The agreement must still be ratified by all three countries, however, and Democrats in the United States have been in negotiations with US Trade Representative Robert Lighthizer for months over their concerns on enforcement, drug prices, and labor and environmental standards.

Chances for ratification in the United States soared on October 17, when Mexican President Andrés Manuel López Obrador sent a letter to US Democrats promising to fully enact a series of labor reforms mandated in the agreement, alleviating a key area of concern for the Democrats. US Representative Henry Cuellar (D-TX), who joined Herrera at the Atlantic Council in a conversation moderated by former CNN global affairs correspondent and Walsh School of Foreign Service journalist-in-residence Elise Labott, said that he is “very optimistic that we will have a successful vote this year and get it done.”

The pending USMCA comes at a critical time for Mexico, according to Herrera, as the country attempts to jumpstart an economy that has grown more slowly than many of its regional neighbors in recent years. “We need to grow faster, and we need to grow in a much more equitable way,” the finance secretary explained, noting the vast gap between the rich areas of Mexico City and impoverished rural areas.

“One of the biggest challenges,” Herrera said, is that Mexico has “one of the lowest public investment rates in Latin America,” meaning that “most by far of the investment is done by the private sector.” This dependence on companies to drive growth is a primary reason why the USMCA will be so critical for the Mexican economy. “In the short term in order for Mexico to grow we need the private sector [to be] confident in the economy and that requires a stable macro environment, low inflation, predictable policies, and a dynamic financial sector,” Herrera argued.

At a time when businesses are increasingly uncertain about the trajectory of trading relationships around the world, solidifying an agreement between the North American economies should trigger extensive investment in the region, Herrera said. Cuellar agreed, noting that businesses “want to have certainty and the worst thing you could do to the business [community] is have them wonder what is going to happen today [or] tomorrow.”

While House Democrats continue to push for stronger provisions in the agreement, Cuellar argued that there are only three legitimate options for US lawmakers to choose from. The first is getting out of NAFTA completely, which Cuellar noted is a nonstarter for most Democrats and Republicans. The second, staying in the existing NAFTA, is acceptable but forgoes many of the tangible advances made in the USMCA, the congressman argued. By ratifying the USMCA, however, “you get a better NAFTA, you improve it…and therefore you have a map and guidelines” for businesses that will increase confidence and spur investment, Cuellar maintained.

Should the United States fail to capitalize on the USMCA opportunity, Cuellar warned “a vacuum will be filled,” by other powers looking to expand their influence in the region, namely China. He noted the vast economic inroads China has made in South and Central America as evidence of what could happen if the United States attempts to cut its links with the region. “The last thing we want is our neighbors to the south to have all this Chinese investment,” he argued.

But even in the absence of this potential competitor, the United States should continue to pursue policies and trade that help bolster the economic position of its southern neighbor, Cuellar said. “Mexico is a very important ally,” he explained, and “it too is in our own interest” to have “a strong and prosperous neighbor to our north and a strong prosperous neighbor to our south.”

Upcoming ratification of the USMCA by all three countries could help spark more investment and solidify business certainty throughout the whole region, Herrera and Cuellar maintained, helping to unleash the economic potential of Mexico and the whole region.

David A. Wemer is associate director, editorial of the Atlantic Council. Follow him on Twitter @DavidAWemer.

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The post Ratified USMCA key to unlocking Mexican growth appeared first on Atlantic Council.

Maria Fernanda Perez Arguello in The Hill: US-Mexico-Canada trade pact: A necessity in fragile global economy

María Fernanda Bozmoski — Mon, 16 Sep 2019 14:52:07 +0000

read the article

The post Maria Fernanda Perez Arguello in The Hill: US-Mexico-Canada trade pact: A necessity in fragile global economy appeared first on Atlantic Council.

A new day for Mexico? AMLO’s first Informe de Gobierno

Pablo Reynoso — Wed, 04 Sep 2019 20:47:01 +0000

Conference call

On September 4, the Adrienne Arsht Latin America Center hosted a conference call to analyze Andres Manuel Lopez Obrador’s (AMLO) government address after his first nine months in office.

Speakers included Reynaldo Vizcarra-Mendez, Partner at Baker & McKenzie Abogados S.C.; Rodrigo Gallegos, Advisor at De la Calle, Madrazo, Madrid; and Valeria Moy, Nonresident Senior Fellow at the Adrienne Arsht Latin America Center and Director of México, ¿Cómo Vamos? The conference call was moderated by María Fernanda Pérez Argüello, Associate Director at the Adrienne Arsht Latin America Center.

According to Pérez Argüello, the address focused on recurring themes from AMLO’s morning conferences, such as prevalent corruption, the importance of economic development over growth, Pemex, and his representation of Mexico’s “4^th Great Transformation.” Pérez Argüello opened the conversation by asking what issues were prioritized by AMLO in his address and which ones were left aside.

Valeria Moy said that AMLO focused on three topics: economics, social development, as well as rule of law and public security. She also mentioned that the address seemed to have been directed toward AMLO’s supporters. AMLO highlighted that “for the first time,” economic and political powers were separated, while later stating that well-being is more important than economic growth. According to Moy, AMLO’s address resembled his morning speeches, a perception shared by the three speakers.

Moy also mentioned that this government address was a turning point, since AMLO will not be able to blame previous administrations for Mexico’s problems anymore.

For Reynaldo Vizcarra-Mendez, there were “no surprises” during this address. According to Vizcarra-Mendez, AMLO was trying to justify decisions that created uncertainty, like the cancellation of the new airport. Additionally, Vizcarra-Mendez highlighted the fact that AMLO disqualified his opponents by saying that they are “morally defeated.”

When asked about foreign investor’s confidence, Vizcarra-Mendez answered that this address did not provide enough confidence, but that a few days before the report, the president reassured foreign investors with a message about gas distribution contracts.

Rodrigo Gallegos said that while AMLO claimed to be transforming the country, the president provided little data to support this claim. For Gallegos, the address was alike to AMLO’s daily conferences, where the president berates neoliberalism with little data and a lack of self-criticism.

Pérez Argüello asked Moy about the president’s criticisms against neoliberalism. Moy responded that a few years ago, AMLO criticized then-President Peña Nieto for a meager economic growth of 0.8 percent, while the current growth rate under AMLO’s administration is 0 percent. Moy added that despite the president’s intention to prioritize economic development over growth, he did not provide any data to support the claim that the country is moving toward development.

When asked about AMLO’s efforts against corruption, Vizcarra-Mendez responded that the administration’s prosecutions for corruption look like targeted “personal vendettas,” rather than institutional priorities. According to Vizcarra-Mendez, AMLO’s administration appears to be using the Financial Intelligence Unit (UIF) to chase opponents. In addition, Vizcarra-Mendez highlighted that AMLO did not mention the anti-corruption system created by previous administrations.

In terms of public security, Gallegos said that AMLO’s administration has had two “big wins.” First, the creation of the National Guard, and second, the reduction of gasoline theft. However, Gallegos added that AMLO’s address did not mention coordination efforts between security agencies, a key component of a successful security strategy.

When asked about the migration crisis, Vizcarra-Mendez and Moy coincided by saying that this is one of the largest challenges for the administration and that Mexico has few resources to deal with this complex phenomenon. According to Vizcarra-Mendez, the National Guard was not created to tackle migration from Central America; however, due to pressures coming from the United States, it had to be used for that purpose. Valeria stated that Mexico must improve its treatment to immigrants and needs support from the United States to mitigate this problem.

Finally, Vizcarra-Mendez mentioned that to increase foreign investment, the Mexican government needs to give certainty on its policy objectives and strategies. In addition, he thinks that the administration must increase public spending, especially in infrastructure.

The post A new day for Mexico? AMLO’s first Informe de Gobierno appeared first on Atlantic Council.

Back to the future on trade with the USMCA

Mark Linscott — Mon, 12 Aug 2019 12:37:45 +0000

Even as the US-China trade war proceeds to the next gripping chapter, another trade drama is unfolding between the Trump administration and the US Congress on the fate of the US-Mexico-Canada Agreement (USMCA) as a replacement to the North American Free Trade Agreement (NAFTA). The administration missed the opportunity to obtain Congressional approval for USMCA prior to the August break, and House Democrats’ insistence that there be key changes to the agreement before it is taken up remains a central dynamic in its future prospects.

All of this is highly reminiscent of the circumstances that prevailed over twelve years ago when the George W. Bush administration prepared to bring several pending free trade agreements (FTAs) to the Congress under “fast-track” legislation that was in place at the time. Just like today, the US House of Representatives in 2007 had recently switched from Republican to Democratic control in the midterms that took place in November 2006. And just like today, Democratic votes were critical to winning passage for several FTAs that were pending then—with South Korea, Panama, and Peru. Yes, and just like today, House Democrats then sought changes to these pending FTAs in their provisions on labor, environment, and intellectual property protections for pharmaceutical products.

Prior to 2007, there had been circumstances in which members of Congress sought accommodations from the administration in power in exchange for their votes on FTAs. In fact, the hard-fought battle to pass NAFTA in 1993 turned critically on the new Bill Clinton administration negotiating side agreements on labor and environment. But 2007 was very different, with Democrats insisting that their proposals be incorporated directly in the text of the agreements through renegotiation. The Bush administration recognized that it had no choice but to reach a deal with House Democrats if it were to avoid humiliating defeats of legislation to pass the agreements or alternatively avoid putting them on the shelf for a future administration to take up under new fast track authority.

Over a period of several months during the spring of 2007, senior officials of the Office of the US Trade Representative (USTR) trudged up to the Hill on a daily basis to sketch out a detailed set of changes to the agreements in the areas of labor, environment, and intellectual property rights for pharmaceuticals. The White House and USTR leadership instructed senior career officials to be accommodating even though some of the proposed changes involved fundamental upheavals to approaches that had been negotiated in previous FTAs, such as those with Australia, Central America, Chile, and Singapore. Examples included substantial broadening of provisions for settling disputes between parties on labor and environmental matters and rolling back enhanced protections for US pharmaceutical companies in provisions on intellectual property rights. On May 10, 2007, House Speaker Nancy Pelosi (D-CA) and Ways and Means Chairman Charles Rangel (D-NY) announced with great fanfare that they had reached agreement with the Bush administration on a package of changes—what later became known in trade circles as the “May 10 Deal.”

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The perspectives of the affected trading partners seemed to be little more than an afterthought. Negotiating teams from USTR went to them to communicate that these changes would need to be incorporated into their agreement prior to US Congressional consideration and that these countries effectively had no choice in the matter—a true take-it-or-leave-it scenario. This stance was most sensitive with South Korea, which was not inclined to swallow changes without a fight. A small team of USTR negotiators were on a plane to Seoul days later to obtain these changes and smooth highly ruffled feathers.

Back to the present, USTR officials and House Democrat trade staff are using the August break to attempt to reach a deal on the areas of labor, environment, intellectual property rights for pharmaceuticals, and enforcement. In many respects, the discussions on enforcement appear to be focused on implementation of labor provisions by Mexico in the USMCA, just as special arrangements on enforcement of provisions on illegal logging for Peru were included in the May 10 deal. It also appears that USTR is seeking to be accommodating in its efforts to reach agreement with House Democrats so that it will be in a position to discuss any necessary changes to the USMCA with Mexico and Canada by September and then proceed with submission of legislation to the Congress to bring the agreement into force with enough Democrats on board in the House to obtain passage.

Assuming this all comes to pass, the Trump administration will have accomplished its first substantial success for its trade negotiation agenda by borrowing a page from the book written by the Bush administration in 2007. And even though this victory may be a more Pyrrhic one than a truly transformational one, given that the USMCA will replace a NAFTA that has been viewed by most trade experts as a success more than twenty-five years after it came into force, it can nevertheless set a standard that proves to be an enduring one. The specifics of a new deal between the Trump administration and House Democrats are likely to serve as a template in the areas of labor, environment, intellectual property rights for pharmaceuticals, and enforcement for future negotiations, just as the May 10 deal became the template for the FTA negotiations that followed it. In the end, the date will have changed but the political realities remain much the same.

Mark Linscott is a senior fellow with the Atlantic Council’s South Asia Center. He served as the assistant US trade representative (USTR) for South and Central Asian Affairs from December 2016 to December 2018. He previously served as the assistant US Trade Representative for WTO and Multilateral Affairs from 2012 to 2016 with responsibility for coordinating US trade policies in the WTO.

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Mark Linscott