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1. Presidents Biden and Lopez-Obrador exchanged letters celebrating the 200th anniversary of formal diplomatic relations between both nations on December 12, 2022. The letters convey views that mirror the two countries´ asymmetries and contrasting perspectives: Biden´s focused on the future, a rosy assessment of the “deep cultural and interpersonal connection” and “enduring partnership”, and of the high-level economic and security dialogues and upcoming leader´s summit the following January; Lopez-Obrador´s mostly on the past, on historical references, issues and challenges.

2. This anniversary and the dawn of a third century call for the rethinking of the regional angle of the geopolitical challenges in a post-pandemic world — the “dangerous decade” as Richard Haass has labeled it. Two useful references: McKinsey’s analysis in November of 30 global chains, 6,000 globally-traded products, and current economic trends; and Shannon O’Neils’s most recent book, published in October: “The Globalization Myth” on regionalization trends and the promise of nearshoring for Mexico —discussed in a fireside chat I conducted with her and Will Hurd in September in Mexico City. In this context, U.S-Mexico relations gain in relevance and the projections spell opportunity for our neighborhood if we summon the proper lessons from the past. 

3. Most of the first 17 decades of the relationship provided little to celebrate. In particular, the beginning was not auspicious at all. The story of the first Mexican envoy´s 5-month tenure is appalling. Jose Manuel Zozaya had an impossible mandate under dire circumstances.

The relatively warm reception at the White House hosted by President Monroe on December 12, 1822 was perhaps the only joyful moment for Zozaya, as he in fact reported drily. Santa Anna´s rebellion in Veracruz early in the month, the Plan de Casa Mata two months later, and the collapse of the Iturbide Empire in March, compounded by snail-paced communications, made it short-lived and fruitless. Today, all this would be more the substance of a kitsch telenovela than a Netflix series (Zozaya was born on a 4th of July, adding irony to injury…).

Negotiations on trade and boundaries would linger for years, under the context of the Adams-Onís Treaty of 1819 and Texas as a key matter of contention. Andrew Jackson (who would be elected President six years later) tellingly declined serving as envoy in Mexico. And the Monroe Doctrine aspiring to a U.S.—declared hegemony in the region would be outlined before Congress at the end of 1823, labeled as “Manifest Destiny” two decades later.

4. The U.S. was living what was called a nationalist “Era of Good Feelings” under President Monroe after the War of 1812-15. It reflected the consolidation as a nation and the seeds of a preeminent role in the world, with the concomitant self-assurance and the perception of chutzpah by those south of the border. A spirit aptly described by Alexis de Tocqueville in the 1830s.

5. By contrast, that moment in Mexico (its early years as an independent nation) was marked by extreme political and economic instability. The domestic determinants of its foreign policy (“intermestic”, to use Bayless Manning’s term) rendered it fruitless. As a testimony to chaos, Mexico had 50 governments during its first 30 years of independent life. Between 1836 and 1854 (from the Texas Declaration of Independence to the Guadalupe-Hidalgo Treaty, La Mesilla and the Gadsden Purchase), Mexico lost approximately 55% of its territory to the U.S.  An estimated 110 thousand Mexicans stayed behind, crossed by the nomad border.

6. In those early years, the role of leaders like President Monroe, John Quincy Adams (Secretary of State and later President), and Joel Roberts Poinsett made it even more difficult for Mexico, adding to its own self-inflicted woes. Some would say they were cunning, but they were undoubtedly savvy, politically shrewd. “There is properly no history; only biography…” wrote Ralph Waldo Emerson. Poinsett´s role in Mexico as Special Envoy in 1822 and as Minister from 1825 to 29 is emblematic.

Poinsett was wealthy, well educated, a polyglot (fluent in five languages), a congressman, extremely well-traveled and connected, and with an impressive international background. At age 27 he was advising the Russian Czar Alexander I in person in St. Petersburg on the cotton industry. He then appears as a diplomat and general under Jose Miguel Carrera in the Chilean army, active in battles against the Spanish Royalists. He goes on in later years to serve as U.S. Secretary of War and as co-founder of what is now the Smithsonian. He would be surely perplexed if he knew we remember him best because of a flower (the poinsettia or nochebuena)…

“Versatile American”, Poinsett’s biography from 1935 by James Fred Rippy, a professor at the University of Chicago and Duke who served as Chairman of the Conference on Latin American History was published again in 2021. An essay by Charles Lyon Chandler also from 1935 completes the contour; worth a read for this bicentennial.

7. For the best part of the following decades, bilateral relations were the realm of conflict, meddling, mutual misunderstanding, distrust, and neglect. Octavio Paz as recently as 1978 in a conference in Washington (published in “Tiempo Nublado” in 1983) and other authors surmised that our differences were virtually impossible to reconcile. We represented two different versions of Western civilization, two foundational processes (colonization vs. conquest and mestizaje) with all that ensued, a product of Reformation and Counter-Reformation. Two cultural lineages: Philip II and Luther. Two stances before modernity, two concepts of time. In 1984, Alan Riding in “Distant Neighbors” followed with: “the tone of relations is established by the past more than the present and by attitudes more than issues…”

8. Today we are not exactly partners. But over the past three decades we have been able to develop discernibly an unprecedented sense of shared responsibilities and even common destiny. This has not happened by chance — and neither entirely by design. There have been two well-known lynchpins:

a. Demography: There has been a dramatic increase in the population of Mexican origin in the U.S.  11 of the 38 million Mexican Americans are first-generation, five times more than 40 years ago. As an expression of the demographic tsunami in the U.S., the non-Hispanic White population is expected to become a minority in 20 years. 

Both countries’ migration experiences are deeply intertwined but completely different, a function of the contrasting economies. Mexico’s diaspora is the largest in the world after India’s; 97% of Mexicans living abroad are in the U.S. While the U.S. has by far the largest stock of immigrants in the world, less than 1% of Mexico´s population is born abroad (close to 2/3 in the U.S.). The proportion of foreign born is almost 16 times higher in the U.S.; 42 times in absolute terms.

In a related trend, Texas alone added 5.5 Hispanic residents for every non-Hispanic White resident in 2018-19. Hispanics became the largest demographic group in Texas in 2022, as they already are in other states (in California since 2014). 

b. Economics: President John Quincy Adams first spoke of the possibility of a bilateral trade agreement in 1826. But a productive regional arrangement did not truly materialize until the 1990s. Tangible economic complementarity and interdependence has only become a reality under NAFTA and USMCA. There is a huge added potential now, given current regional trends vis-à-vis China, with supply chain realignment and nearshoring / ally-shoring. As Ángel Gurría puts it, it is a historic geopolitical juncture, “tailor-made for Mexico”.

Bilateral trade reached $660 billion in 2021, with Mexico as the U.S.’ main trading partner. Half of all U.S. states have Mexico as their first or second export destination. More importantly, joint production clusters and corridors are thriving. And an unprecedented $57 billion in remittances from the U.S. into Mexico are expected in 2022; they have been the largest source of foreign income in recent years for the country

For good reason, Mexico’s diplomatic presence in the U.S. is unprecedented in terms of the number of consulates. No other country has as many consulates in any single host country. Half of the consulates are located along border states and 11 of the 50 are in Texas. 

Texas has led the nation as top exporting state for the 20^th year in a row, accounting for more exports than California and New York combined. Mexico is the source of over a third of all Texas imports and the destination of a third of all exports. Despite the contrast in economic clout (nominal GDP per capita in Texas is seven times Mexico’s), Mexico is a bigger trading partner than the next six on the list added together.

9. Despite these developments, we must keep in mind that international links can be fragile and fleeting — and be prepared for that. For example, on September 6, 2001, we attended a Joint Session of Congress in Washington, D.C., in the context of President Fox’s State visit. “Trust” was the catchword in speeches from both sides. As CEO of the North American Development Bank, I was exploring ways to contribute to spearhead pathways for a “NAFTA Plus”, as envisioned by presidents Bush and Fox. Five days later, on 9/11, the world changed and we had to adopt a new paradigm: security, which led to relative entrenchment. And six days after that, China’s accession to the World Trade Organization was approved. Overnight we were in a new era globally and regionally. In many ways, that disruptive watershed continues to define our time.

10. For now, as we begin a third century of relations and with historic opportunities in mind, we could point out at least to seven hurdles and reasons for concern:

a. As compared to 30 years ago, the North America idea is rather puny. One does not find enough appetite for region-building on either side (the same is true in Canada). Even our narrative is tepid. There are no more Bob Pastors asserting an interdependency gospel. In fact, there seems to be more appreciation abroad for the role of Mexico in North America— for its regional identity —than in Mexico. Singapore’s Prime Minister Lee Hsien Loong told me in a fireside chat I conducted with him: “What we would give for a mile along Mexico’s northern border! Why are you so lukewarm about it?”

b. Politics breed uncertainty. There will be presidential elections both in the U.S. and Mexico in 2024. Economic protectionism, immigration, and security will surely be dominant topics in the U.S. with the risk of Mexico becoming an electoral piñata again. Cyclical bouts of nationalism on the Mexican side may well echo the sentiment.

c. Security (organized crime, drugs, arms smuggling) is ill-omened and becoming an increasingly large and complex concern. This is displayed and magnified along the border.

d. Migration is the harbinger for complications in the bilateral agenda. Nearly 2.4 million undocumented immigrants were arrested in the 2022 fiscal year, the highest number ever recorded. Title 42 (a Trump administration policy that allows for the rapid expulsion of migrants and asylum seekers at the border) will probably be lifted soon. A huge surge is expected, with increased political discord on the issue over following months.

e. Climate change is already exacerbating the dire environmental challenges faced by both countries along border states. In the meantime, we continue to impose XIX century sovereignty constraints on XXI century realities and challenges. Water is a key concern; it is bound to take the whole bilateral agenda hostage in the context of the worst drought in 12 centuries being experienced along parts of the border. The CILA / IBWC arrangement and the 1944 Treaty are increasingly ineffective, despite progress in the Colorado River (Minute 323) and NADBank´s contributions.

We keep postponing the consideration of more suitable mechanisms for fear of disruption, but the threat of unprecedented crises suggests it is time to embrace bold moves into other bilateral management arrangements, some of which are showcased elsewhere. For example, the International Joint Commission manages shared lake and river systems between the U.S. and Canada based on commissioners who work by consensus and don’t take direction from their governments. It provides for less political wrangling and more creativity, effectiveness and agility.¹

f. Economic: The 2020 USMCA sunset clause stipulates a six-year review to be conducted next in 2026. For now, we urgently need to avoid having Mexico´s energy reform and policies and bilateral agriculture clashes lead to dispute and arbitration levels. The impact on trade and foreign investment flows would be considerable. The High Level Economic Dialogue relaunched in September can be an effective platform for a new consensus.

g. Academic links: Very few academic centers and think tanks are dedicated to our bilateral relations. With few exceptions, Mexico´s universities do not even pursue an international agenda. Partnerships and joint programs and research are scarce, and foreign universities have a very limited direct presence in Mexico. In terms of student mobility and exchange, the levels are negligible. Some estimates suggest that Mexican students abroad have never reached 20,000, which is extremely low by international standards for a country of its size and economic clout. 

The U.S. has over 40 of the top 50 universities in the world by any ranking, while only two universities in Mexico are ranked among the top 500 in the world. Nonetheless, right before the COVID outbreak, there were 3.4 times more South Korean students in the U.S. than Mexican, despite South Korea being 40% the size of Mexico in population. Vietnam, with 75% the population of Mexico and less than half of its GDP per capita, had 60% more — and Mexico is right next door, while they are 12,000 kilometers away from the U.S.  President Michael Crow of Arizona State University told us recently that they have 40 times more students from India than from Mexico. ASU, the best-ranked university in innovation in the U.S. is only a 3-hour drive away from the border.

Out of a record total of 1.1 million foreign students in the U.S. in 2018-19, 15,000 were from Mexico, 1.4% of the total. That was in fact 10% less than the peak number in 2015. On the opposite direction there were 30% more American students in Costa Rica than in Mexico, despite its population being 25 times smaller. As neighbors, we are missing a huge opportunity not only to help Mexico achieve much better education levels, but also to contribute to a more global perspective and lasting grassroots and leadership connections.

11. As one reflects on the state of bilateral affairs, there is a dangerous absence: the lack of a sense of urgency in Mexico — a “mañana” syndrome. It is not only the crucial need to face dire lingering poverty and inequality levels; the added issue is that Mexico´s demographic bonus is eroding rapidly. Since the tipping point of fertility rates fifty years ago, the median age has increased more than twice as fast in Mexico than in the U.S.

This is a dramatic contrast, evidenced in dependency ratios. It leads to the gradual complication of development efforts, as the working-age population shrinks in relative terms and labor and fiscal challenges compound (tax revenue, the pressures and composition on the expenditure side, pensions, etc.). And all this contributes to the widening of the income per capita gap between both countries. The gap went from 2.7 times in 1990 to 3.4 times today — adjusted for purchasing power. Its narrowing should be a key success indicator in the relationship. Over the past 30 years, at the height of partnership-building and open-market policies, there has been no convergence — the comparison of individual income in both nations is in fact over 25% more unequal. While there is undoubtedly progress in some fronts in Mexico, the country lags behind in the neighborhood even further.

12. Those of us who have been involved in the bilateral agenda for decades recognize that the bonds developed between both nations over the past 30 years represent a pivotal point in the arduous two centuries of official relations. But we should not assume that this level of interdependency and understanding is suitable, or that it is safe from being dented or even abrogated. We need a shared vision, an ambitious new blueprint, a relaunching of the relationship. It behooves us both to nurture the binational links and multiple connections and to respond together to our shared challenges with our best knowledge and effort. Above all, we need to keep in mind that destroying trust is exceptionally easy and benefits neither side; rebuilding it could take forever. EP

1. See: Raúl Rodriguez, “Frontera norte: ¿Tercer país?”, Este País: https://app-63cbc6a2c1ac1839b49bd08c.closte.com/tendencias_y_opiniones/frontera-norte-tercer-pais/ [↩]

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