By ANTONIO GARZA, former U.S. ambassador to Mexico
U.S. President Joe Biden used his first two virtual foreign visits to usher in a new era of North American relations with Canadian Prime Minister Justin Trudeau and Mexican President Andrés Manuel López Obrador (AMLO).
During the meetings, Trudeau and López Obrador requested Biden’s support in securing U.S.-produced covid-19 vaccinations, and the U.S. responded. On Thursday, March 18, the Biden administration pledged to send the AstraZeneca vaccine — which is awaiting FDA approval — to Canada and Mexico.
In the virtual visit, Biden and López Obrador also discussed pressing regional migration challenges. The leaders agreed to work together to curb the flow of irregular migration and promote development in Central America.
This week, the U.S. Department of Homeland Security announced that it expects 2021 border crossings to reach a 20-year high. Over the course of the last month, thousands of unaccompanied migrant children have crossed the border. With resources stretched thin, many are being detained longer than allowed by law. In response, Biden directed the Federal Emergency Management Agency (FEMA) to support housing the children.
In an interview several days ago, Biden made it clear that migrants should not come to the border. The Biden administration has said it needs time to rebuild an immigration system that was dismantled by the previous administration. In the meantime, it will continue to use a Centers for Disease Control and Prevention (CDC) order to expel most migrants who arrive at the border. Mexico has agreed to help the United States by drastically stepping up its own enforcement and taking back more expelled Central American families.
On Monday, March 15, Republican members of the House of Representatives led a delegation to the border to bring attention to a crisis that they believe is the result of Biden’s promises to shift policy. And Republican Senators plan to visit the border next week.
These partisan trips highlight stark disagreements on immigration reform, one of Biden’s legislative priorities. Republicans have refused to sit down with their colleagues across the aisle until the situation at the border is resolved. Struggling to secure bipartisan backing for an immigration overhaul, the Democrats have decided to move forward piece-by-piece.
On Thursday, March 18, the House of Representatives voted on two immigration bills. One measure would provide a path to citizenship for over 2.5 million undocumented immigrants who arrived as children, and the other would offer legal status to 1 million undocumented farm workers. This legislation faces a difficult path through the Senate to Biden’s desk.
Last week, Congress approved a new $1.9 trillion covid-19 relief package. The U.S. stimulus has boosted Mexico’s economic recovery. JP Morgan estimated that last year’s relief package added 3.5 percentage points to Mexico’s GDP in 2020, roughly seven times more than the impact of Mexico’s own limited efforts.
The U.S. covid-19 relief has also stimulated remittances to Mexico. In 2020, remittances totaled an all-time high of $41 billion, a 14 percent increase from 2019 and 4 percent of Mexico’s GDP. The majority of this year-on-year increase came from individuals in the United States who sent a portion of their stimulus checks or earnings.
Mexico’s exports also reached a record, due to a rise in U.S. demand for goods. In the fourth quarter of 2020, exports were 5.5 percent higher than the same quarter in 2019. This increase in exports has favored the country’s northern industrial region.
While exports are up, Mexico’s business climate remains bleak. As I mentioned in my last column, economic growth will be slow to rebound due to the lack of major fiscal measures to support businesses and consumers. López Obrador’s unpredictable stance on contracts will also continue to deter investors.
Last month’s energy crisis in Texas gave López Obrador a stronger political platform to push for greater state control of the energy sector. His allies in Congress recently passed a law that gives preference to the state-run Federal Electricity Commission (CFE) over private wind and solar farms.
Mexico’s new electricity law puts at risk $26 billion in foreign investment. Canadian Prime Minister Justin Trudeau expressed concern about Canadian assets, joining U.S. Secretary of State Anthony Blinken, who raised “energy concerns” during a virtual visit with Mexican Foreign Relations Secretary Marcelo Ebrard.
In response to the new electricity law, a number of foreign companies filed lawsuits. Days later, a Mexican federal judge granted a suspension for the duration of the trial, arguing that the law could violate the constitutional right to free competition. This prompted López Obrador to request a Supreme Court ethics inquiry of the federal judge and to threaten constitutional reform, likely after June’s midterm elections, when he is hoping to gain an even larger majority for his National Regeneration Movement (Morena) party in the Mexican Congress.
The midterm elections will set the tone for the rest of López Obrador’s six-year term. Maintaining his absolute majority in the lower house of Congress would allow him to rewrite the constitution — in regards to energy and other crucial sectors — and further concentrate power. The odds remain in the president’s favor. Recent polls showed that his coalition has a historic lead. Roughly 56 percent of voters support his coalition, compared to 29 percent who back the opposition.
ANTONIO GARZA is a U.S. lawyer who served as his country’s ambassador to Mexico between 2002 and 2009. In recognition of his work, in 2009, the Mexican government bestowed on him the Águila Azteca, the highest award granted to foreigners. Prior to his appointment as ambassador, Garza served as Texas’ secretary of state from January 1995 to November 1997 and was also chairman of the Texas Railroad Commission. He is currently a lawyer specializing in cross-border issues at White & Case, which was recently named the most innovative firm in North America for 2020 by the Financial Times. He is also currently a director at both Kansas City Southern and MoneyGram.
…March 19, 2021