Monday, April 29, 2013

Why Mexico is key to American prosperity


A U.S. flag flies near the U.S.-Mexico border fence in an area where they search for border crossers near Campo, Calif.
 
Marketplace for Thursday, April 25, 2013
 
 
President Obama travels to Mexico next week. Among the items he'll discuss with new President Enrique Peña Nieto: immigration, drug cartels, and the boom and bust of the Mexican economy.

And sure, those are persistent issues, but Shannon O'Neil of the Council of Foreign Relations says a big chunk of American prosperity depends on what happens south of the border.

"From the food on our tables, to the parts in our cars, to the consumers for our products, to the drugs on our streets, Mexico... affects our everyday lives here in the United States."

In her new book, "Two Nations Indivisible," she argues that the bilateral relationship has changed signficantly, but the thinking in Washington has not kept pace.

"We've seen the economy transform, we've seen politics open up -- it's now a democracy. We've seen the rise of a middle class there," O'Neil says, adding, "Often good things don't attract the attention of policymakers."

Take the Mexican economy for one. Known for booms and busts in the 1980s, it's increasingly stable. The middle class has grown to nearly 50 percent of the population, in a country known for Carlos Slim's billions and millions of poor people. And NAFTA has boosted all both countries, and Canada, according to O'Neil.

"Trade between Mexico and the United States is over half a trillion dollars worth of goods, [it's] one of our most vital partners," O'Neil says. "Mexico is a far better partner than [China, Brazil, or the EU] for us, because we really make things together."

Going forward, O'Neil believes Mexico is positioned to become a top 10 global economy, further boosting the United States. But, it could also succumb to its challenges, including widespread corruption and economic monopolies.

Her advice for President Obama? "We need to think about how to work in partnership... so that Mexico isn't -- but also so that we don't perceive Mexico as -- such a problem."


 

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