Posts Tagged economist
Mar 19th 2009 | MEXICO CITY
Mexico retaliates against American congressmen who want closed borders
IN JANUARY Mexico’s president, Felipe Calderón, became the only foreign leader to meet Barack Obama between his election and his inauguration. Their long lunch was a success. Mr Obama said afterwards that he would be “ready on day one to build a stronger relationship with Mexico.” According to one Mexican official present at the talks, the visitors felt reassured that Mr Obama would resist protectionist pressures and that the criticisms of the North American Free-Trade Agreement (NAFTA) he had expressed during the campaign could be dealt with in a trilateral review, involving all three North American countries, that would seek to improve the agreement rather than unpick it.
Just two months later, the honeymoon has soured somewhat. Mr Calderón has taken to lambasting American officials for allowing the illegal drug trade between the two countries to flourish, and to criticising the American media’s coverage of Mexico’s drug-related violence. Now a provision inserted into the Omnibus Appropriations Bill signed into law by Mr Obama has scrapped a pilot programme that allowed a small number of Mexican trucking companies to carry cargoes north of the border—as NAFTA requires.
Mexico’s response was swift. On March 18th it imposed tariffs of up to 45% on 90 American agricultural and industrial imports, ranging from strawberries and wine to cordless telephones. The list was carefully chosen to avoid pushing up prices of staples in Mexico while hitting goods that are important exports for a range of American states. That way, it could have maximum political effect north of the border.
Since NAFTA was signed in 1992, trade between Mexico and the United States has boomed. But the issue of road transport has turned into a political battle. Around two-thirds of cross-border trade goes by road. Transport companies from each country were supposed to be able to operate freely in the others by 2000. The Teamsters union, whose members include American truck drivers, has fought a long and largely successful rearguard action against this provision. It argues that Mexican trucks are unsafe and polluting and their drivers insufficiently trained.
An American court rejected these arguments. So did a NAFTA dispute-settlement panel, which ruled in 2001 that the United States was violating the agreement and gave Mexico the right to impose retaliatory tariffs. Mexico chose not to do so, to give the United States a chance to honour its commitment. The Bush administration tried, but was thwarted when Congress approved a measure setting 22 new safety standards for Mexican trucks.
To try to break this stalemate in 2007 the Bush administration set up the pilot programme, under which trucks from 100 transport firms in each country were allowed to cross the border. Opponents in Congress slipped a provision delaying this into an unrelated bill. This was hailed by James P. Hoffa (son of Jimmy), the Teamsters’ president, as a victory in “the battle to keep our borders closed”. But the pilot scheme eventually went ahead.
The Teamsters’ safety argument looks spurious. Mexican transport firms have invested in new trucks and trained their drivers to meet the safety requirements under the pilot scheme. A study commissioned by America’s Department of Transportation, which tracked Mexican trucks operating north of the border in the first year of the programme, found that these trucks clocked up far fewer safety violations than their American counterparts.
The Teamsters’ victory means that most Mexican goods going north will continue to have to be unloaded at the border, reloaded for the short hop across it, then loaded again onto an American truck. This amounts to what Mexicans call a “trucking tax”. And since the short-haul lorries tend to be older gas-guzzlers, it is environmentally unfriendly, points out Barbara Kotschwar, a trade specialist at Georgetown University in Washington, DC. No such restrictions apply to Canadian lorries.
Mexico had the right to impose bigger tariff rises. Its government hopes the dispute can still be settled. The American administration said it would try to come up with a new scheme to meet the “legitimate” concerns of Congress. That will be a job for Ron Kirk, confirmed this week by the Senate as United States Trade Representative. But Mr Obama’s early capitulation to a transparently protectionist lobby sets a worrying precedent. On March 25th Hillary Clinton, the secretary of state, will visit Mexico, dispatched by Mr Obama originally to discuss security issues. Her task will now also be to reassure America’s second-biggest trade partner that her country honours its commitments. Perhaps Mexican officials should invite her to make the return journey by truck.
Apr 2nd 2009 | EL PASO AND MEXICO CITY
Senior American officials are trooping to Mexico with assurances of support in its drug war. Will warm words be backed up by action?
ARIZONA’S attorney-general, Terry Goddard, says he started to worry about American guns ending up in the hands of Mexican drug traffickers two years ago. That was after a meeting in Cuernavaca with Mexico’s attorney-general, Eduardo Medina Mora, who urged him and several of his counterparts from other American states to enforce the law banning the export of assault weapons that can be legally bought north of the border. Keen to help, Mr Goddard spent months building a case alleging that George Iknadosian, the owner of a Phoenix gun shop, had knowingly sold some 700 assault weapons to “straw men” working for the narcos. It could have been a landmark case. Mr Iknadosian pleaded not guilty, and last month a state judge threw out all the charges against him on a point of law. Prosecutors blamed a clash between federal and state law on arms smuggling.
This is just one example of how hard it will be for the United States to implement its promise to collaborate with Mexico in quelling drug-related violence. But Mexican officials are pleased that at least the promise has been made. During a two-day visit last month, Hillary Clinton, the secretary of state, admitted that America’s “insatiable demand for illegal drugs fuels the drug trade” and that “our inability to prevent weapons from being illegally smuggled across the border to arm these criminals causes the deaths of police officers, soldiers and civilians” in Mexico.
Her visit was the clearest sign that the American administration has woken up to what is at stake in the battle unleashed by Mexico’s president, Felipe Calderón, against the drug “cartels”, in which 10,000 people have died since December 2006. She was to be followed on April 2nd by Janet Napolitano, the secretary for homeland security, and Eric Holder, the attorney-general. Barack Obama himself will drop in for talks with Mr Calderón before both attend the Summit of the Americas in Trinidad on April 17th.
“They finally started paying attention,” says Arturo Sarukhan, Mexico’s ambassador in Washington. That is partly because some Americans fear the violence is starting to spread northward, although such worries look exaggerated (see article). But it is also in part owing to a war of words that has raged across the border in recent weeks.
This began with a report in November from the United States Joint Forces Command bracketing Mexico and Pakistan as the two countries most at risk of becoming “failed states”. Dennis Blair, the new director of national intelligence, then told a Senate committee that the corruption and violence of the drug cartels was hindering the Mexican government from controlling part of its territory. Having largely ignored Mexico’s fight against the drug gangs for the past two years, American television has suddenly latched on to it, in sensationalist terms. Spurred on by his own media, Mr Calderón, by instinct an American ally, responded by accusing American officials of corrupt complicity in the drug trade.
So Mrs Clinton’s comments were welcomed in Mexico. As to whether the words will lead to practical co-operation, Mexican officials say they are getting more help with intelligence on the drug gangs from their American counterparts. But Mrs Clinton’s promise of Black Hawk helicopters for the Mexican police was undercut by Congress’s pruning of funding for the Mérida Initiative, a plan under which Mexico was to receive $1.4 billion in aid over three years. American officials now say they will seek to reverse the cut. But more than aid, Mexico wants the Americans to crack down on drug consumption, as well as the movement of guns and money southward. That is where the big difficulties lie.
The Obama administration promises to send several hundred more agents to the border, both from the Bureau of Alcohol, Tobacco and Firearms and from Immigration and Customs Enforcement. The idea is that they will search southbound traffic and railcars. Mr Calderón wants the Americans to tip off their Mexican counterparts about gun trafficking, and to curb gun sales. Mrs Clinton said she favours the reinstatement of a federal ban on selling semi-automatic “assault weapons” such as AK-47s. Mexican police claim that since the ban lapsed in 2004, the cartels have become much more powerfully armed: of 30,000 guns they have seized since December 2006, 15,000 are assault weapons, nearly all bought at the 7,500 or so gun shops on the American side of the border.
But the gun lobby opposes the ban. John Barrasso, a Republican senator from Wyoming, said in El Paso this week that violence in Mexico is an argument for more assault weapons, not fewer: “Why would you disarm someone when they potentially could get caught in the crossfire?” He continued: “The United States will not surrender our second-amendment rights for Mexico’s border problem.”
Facing so many other battles, Mr Obama would surely prefer not to be drawn into this one. Mr Sarukhan says that merely enforcing existing gun laws would be a big help. For Mexico, too, there are dangers in framing its relations with the United States purely around security. Trade, economic integration and immigration are equally vital. For now, however, the drug war has captured the headlines in both countries, leaving the politicians with no choice but to respond.
Apr 16th 2009 | MEXICO CITY
Felipe Calderón wants to talk to Barack Obama about drugs—and windmills
ASK anyone who has read a newspaper in the past few months what is the greatest threat faced by Mexico, and the answer will inevitably be the drug gangs whose violence resulted in over 6,000 deaths last year and is the main reason Barack Obama came to visit this week. Yet even though Felipe Calderón, the country’s president, has staked his job on his crackdown against the traffickers, he has a different answer to this question: global warming. “Climate change is the most important challenge that human beings are facing in this century,” he said on a recent visit to London.
That might seem odd coming from the conservative leader of an oil-exporting developing country. But Mr Calderón has chosen to make the fight to reduce carbon emissions one of the hallmarks of his presidency, at least rhetorically. He wants Mexicans to commit to cutting their own emissions by half by 2050. He has urged the setting up of a global “Green Fund,” which would receive contributions from all but the poorest countries in the world to finance environmentally friendly projects. Mr Obama praised his suggestion of a North American cap-and-trade scheme.
Mr Calderón’s officials say his enthusiasm is motivated by pure utilitarian maths: Mexico is both one of the countries most vulnerable to global warming and one rich in renewable energy resources. It has been hit by extreme weather several times during his term: in 2007, a devastating flood put 80% of the southern state of Tabasco under water and caused some $5 billion in damage, while farming in the north has been hurt by a lengthy drought. Mexico lies in the path of hurricanes both from the Atlantic and Pacific which many scientists believe are becoming stronger as a result of rising sea temperatures. Rising sea levels from melting polar ice caps threaten nearly half of the country’s eastern seaboard.
Since Mexico produces just 1.5% of the world’s emissions, it will be affected by climate change regardless of what it does at home. But greens argue that it must practice what it preaches—especially if it wants to influence the debate on the issue in the United States. Moreover, officials see potential economic and diplomatic gains.
Mexico’s oil output is shrinking fast. But it has huge potential to produce renewable energy. Around 17% of its electricity now comes from hydro dams. Iberdrola, a Spanish utility, is building a giant wind farm at La Ventosa (“the windy place”), an area in the southern state of Oaxaca which features gusts strong enough to topple trucks. This will provide power to 200,000 people, and avoid the emission of 150,000 tons of carbon dioxide each year. The government is also in talks with Q-Cells, a German company, over setting up a factory to manufacture solar panels in an investment that could total up to $3.5 billion over five years. Mr Calderón is also seeking American investment in solar power in northern Mexico. According to a study by McKinsey, a management consultancy, the investment needed for Mexico to cut its emissions by a quarter from current levels by 2030 would see a net gain of 500,000 jobs.
Mr Calderón’s vocal advocacy of the issue also reflects some geopolitical opportunism. Although Mexico has the world’s 11th largest economy and population, it tends to punch below its weight in international affairs, largely because its close integration with the United States leads some to see it as an American satellite.
Taking the initiative on climate change might help Mr Calderón give Mexico a higher profile. Other large developing countries have been less willing to agree to cut their emissions, though Brazil may change its mind (see article). According to Juan Manuel Gómez Robledo, a senior Mexican diplomat, Mexico’s stance on climate change “increases our capacity for political dialogue internationally” and helps the country act as a bridge between the developed and developing worlds.
But will Mr Calderón be able to achieve the 5% drop in emissions he has promised by the time he leaves office in 2012? ProÁrbol, a much-hyped reforestation scheme, is widely considered a failure: of the 250m trees that were planted under the programme in 2007, officials admit that 40% have already died. Others put the figure much higher. The government’s climate-change plan makes no mention of how its lofty goals will be financed, a serious obstacle given the sharp slowdown in the Mexican economy. It would be more credible if it was backed by a carbon tax or local cap-and-trade scheme so that renewable energy could compete with fossil fuels on price. But the president is a quietly determined man, as he has shown in his battle with the drug traffickers. It is too early to dismiss his green credentials as merely for show.
Apr 2nd 2009 | EL PASO
But still pretty safe—on the northern side
IS MEXICO’S drug war moving north? In Maricopa County, which encompasses Phoenix, officials are alarmed by a spike in kidnappings for ransom and “other Latin American-style violence”. Rick Perry, the governor of Texas, wants the federal government to deploy 1,000 National Guard troops and six helicopters in his state. A spokeswoman for the governor said that the request, which the administration is considering, is to prevent the situation worsening.
But many mayors along the border say that troops are not needed, at least not yet. They dismiss such talk as alarmist. “The sky is falling? Well, here comes more funding,” says Chad Foster, the mayor of Eagle Pass. He says that his town, on a rugged stretch of the Texas border, is fine. He crosses the border to Piedras Negras daily, even though his sister in Los Angeles called and warned him not to go to Mexico.
On March 30th the United States’ Senate Committee on Foreign Relations held a hearing on border violence at the campus of the University of Texas in El Paso. Jaime Esparza, the El Paso district attorney, said that he had not seen an increase in violence and nor had his colleagues in other Texan border cities.
El Paso’s Mexican sister city, Ciudad Juárez, is a different matter. With 2,000 killings since January 2008 it has become notorious (though the violence has abated since Mexico’s government sent 8,000 troops last month). El Paso itself had only 19 murders during the same period. Local leaders point out that their city is one of the safest in the United States, with a far lower crime rate than Washington, DC, the nation’s capital.
Downtown Ciudad Juárez has a forlorn air. The red-light district, a few blocks from one of the international bridges, was knocked down a few years ago and the area has not been redeveloped. Along the main pedestrianised street many shops are shuttered, windows are broken and pavements are crumbling. Heavily armed troops are stationed throughout the town.
El Pasoans say they feel safe at home, but nowadays make fewer trips across the border. Trini Lopez, the mayor of the suburb of Socorro, says that people have disappeared from his town and later been found dead in Mexico. For the time being, he is advising people to stay safe by staying in Socorro.
By David Von Drehle Thursday, Jun. 19, 2008
The smuggler was surprised to see us. It’s his business to monitor traffic along his stretch of the border, and he had just watched from his hiding place as a white-and-green patrol truck rolled slowly past on the U.S. side. The day shift was ending for “la migra,” the border patrol, so it was time for him to move.
He urged his clients–11 illegal aliens–to get over the fence quickly. Within minutes, all were safely across the border about five miles (8 km) west of Naco, Ariz.–roughly the same spot where Coronado and his conquistadores made the first recorded crossing in 1540. The smuggler was brushing their footprints from the border road when our four-wheel-drive rental appeared unexpectedly over the hill.
He did what smugglers always do when spotted: he bolted. In an instant he was safely back on the other side, leaving his customers to their fate. They followed him, bewildered, only gradually realizing that we were journalists, not federal agents. In this way, we had a chance to see how a group of ordinary Mexicans–one a grandmotherly woman, another a 10-year-old boy–cope with the U.S. government’s new $1 million-per-mile border-security fence.
First they tossed their day packs over the 12-ft. (3.7 m) barrier of steel mesh. They had chosen to cross at a spot where the fence made a small right-angle jog, because there was a supporting post extending about halfway up the angle. This gave them a foothold, and from there, the strongest members of the group boosted the others to the top. It was no easy transit. One young woman froze in fear, a leg on either side of the fence, her face a mask of panic as she looked at the long fall into one country or the other. Her companions quickly and efficiently coaxed her over. Then the little boy–who wore a knockoff New York Yankees cap–went over, dangling by his hands from the top and dropping bravely into waiting arms. The old woman glared at us as a companion pushed her back up the fence she had just come down. Within three or four minutes–minutes freighted with visions of broken bones and heart attacks–all of them were safely back in Mexico. They would surely try again once we were gone.
A Barrier in the Eye of the Beholder So the new border fence must be a failure, right? If a billion-dollar barrier can’t stop children and seniors in broad daylight, what’s the point?
That would be one way to tell this story–but the truth is more complicated. At the Berlin Wall, guards fired live ammunition, and still an estimated 5,000 people managed to cross. And why shouldn’t the fence be a complicated subject? Everything else about immigration and border security is complicated. The border has become the rice, or maybe the potatoes, of American politics; it goes with just about everything on the menu. It’s an economic issue: Are illegal immigrants taking jobs from American citizens and driving down wages? It’s a health-care issue: Do uninsured aliens in emergency rooms push up the cost of premiums for the insured? It’s an education issue: Are local school districts across the country overtaxed by the needs of immigrant children? It’s a crime issue: Are U.S. cities plagued by Central American gangs? And it’s a national-security issue: Could bomb-toting terrorists cross into the U.S. undetected?
Presidential candidates in both parties have learned this year to be wary of a subject that shows up in so many guises on so many different plates. What tastes like common sense to one voter–cracking down on illegal crossings–smacks of xenophobia to the next, and the same rumble of helicopters and border-patrol Jeeps in the Southwestern desert sounds to some people like America standing up for itself but to others like Emma Lazarus, poet of the Statue of Liberty, rolling over in her grave.
Passions don’t shake out neatly along party lines. Republican John McCain wove frantically through last winter’s debates trying to avoid the scarlet A-for-amnesty. His sin was promoting a “pathway to citizenship” for undocumented workers. Democrat Hillary Clinton, meanwhile, tripped on a debate question about driver’s licenses for illegal aliens. Senator Barack Obama has stepped carefully with the issue, voting for the fence and for more agents on the border while saying that this covers “only one side of the equation.”
In this cloud of intangibles, the fence is something solid. After years of talking about it, Congress last year put $1.2 billion into the project, and the Department of Homeland Security (DHS) promptly started hiring posthole diggers. DHS aims to complete more than 650 miles (roughly 1,000 km) of barrier by the end of the year, built in sections by National Guard units and private contractors. That represents only about one-third of the U.S.-Mexico border; on the other hand, the fence clearly delineates, for the first time, a frontier that was previously just a four-strand cattle fence at best.
New fence goes up every week in Arizona and California, mile after mile of posts and plates and screens and rails marching across sun-blasted deserts and up rugged, rock-strewn hillsides. No one seems able to keep track of it all. Even agents of the newly reorganized Customs and Border Protection (CBP) department find themselves coming upon sections they’ve never seen before. The work is less advanced in New Mexico and stalled in Texas, where fierce local opposition has delayed construction–a coalition of border-town mayors and chambers of commerce has sued DHS Secretary Michael Chertoff, alleging he is trying to seize land at inadequate prices. But Texas already has more than 1,200 miles (almost 2,000 km) of well-marked border in the form of the Rio Grande.
The fence is not likely to win any architecture awards. It’s a hodgepodge of designs. The best–sections of tall, concrete-filled steel poles deeply rooted, closely spaced and solidly linked at the top–are bluntly functional. The worst–rusting, graffiti-covered, Vietnam-era surplus–are just skeevy walls of welded junk. Whether you think it’s a sad necessity or a crude brutality, the fence is not a sight that stirs pride. The operative question, however, is not What does it look like? but How does it work?