MEXICO CITY — President Joe Biden’s visit to Mexico this week, with a short layover in El Paso on Sunday, could change the border narrative from chaos to opportunity — at least that’s the hope of local leaders.
Once considered a potentially prosperous and dynamic zone, the border has instead been vilified as a place of crisis and security threats on the U.S. side and organized crime on the Mexican side, say economic experts such as Raymond Robertson, director of the Mosbacher Institute for Trade, Economics, and Public Policy at Texas A&M University.
The region could help North America address its supply chain challenges and labor shortages, but is now paralyzed by fear of an “invasion” by immigrants, in the words of Republican leaders who blast “Biden’s open border.”
At the same time, North Texas investors and civic groups in Mexico are increasingly concerned about what some see as Mexican President Andrés Manuel López Obrador’s efforts to weaken democracy by trying to nationalize industries like oil and gas, and by defunding key entities such as the National Electoral Institute.
Still, work along the U.S.-Mexico border could lead to important breakthroughs. “The border is the epitome of the benefits of trade and integration,” said Robertson, a senior fellow at the SMU Mission Foods Texas-Mexico Center.
“Nowhere is that better expressed than on the Texas-Mexico border,” he said. “There’s a lot going on there, and ... politicians are wasting time with political theatrics, instead of really capitalizing on this phenomenal opportunity with the move to get out of China.”
As the United States’ relationship with China deteriorates, “Mexico, particularly the border, should be the destination for that production,” Robertson said. “I think it’s just absolutely critical, for the future of the U.S. production [and] North American production, that they find some common ground and realize … their common destiny.”
Need for North American talks
Biden’s visit to El Paso and Mexico City underscores the need for talks involving North American leaders, said El Paso County Judge Ricardo Samaniego.
The discussions will leverage the border region in a post-pandemic economy — and in the face of a looming recession, he said. The region produces everything from giant wind turbine blades to car parts, medical supplies and laptops.
“The border, El Paso-Juárez in our case, really clicks when both sides are talking, resolving issues,” said Samaniego, a former executive of a foreign-owned company known as a maquila. “When our leaders, whether in Washington, Austin, Chihuahua City or Mexico City, are focused on solutions, you reap the benefits generated here.”
Mexico, the United States’ second-biggest trading partner, is also the 10th most populous country and 15th largest economy in the world. The two countries are bound, for better or worse, by geography and strong economic, cultural and historical ties. All of that intersects here on the border.
Besides sharing a nearly 2,000-mile border with the United States, Mexico is a major U.S. energy supplier and a top source of unauthorized migrants and illegal drugs — and the U.S. is a major supplier of guns used in Mexico’s astonishing organized-crime violence, according to U.S. law enforcement agencies and the Congressional Research Service.
Two-day summit
This week, following Biden’s brief stop in El Paso, the president will join Canadian Prime Minister Justin Trudeau and their host, López Obrador, known as AMLO, at Mexico City’s National Palace for a two-day summit.
The leaders will focus on trade, energy, climate change, immigration and border security. López Obrador is expected to push for poverty relief projects that he says will reduce the massive migration headed for the U.S. through Mexico.
The summit opens Monday with a meeting between López Obrador and Biden aimed at strengthening bilateral trade relations by accelerating border infrastructure projects and increasing cooperation on issues such as “labor mobility, security, education and climate change,” said Mexico’s Foreign Secretary Marcelo Ebrard.
Energy, telecommunication and auto conglomerates are increasingly nervous about doing business in Mexico, pointing to what many call López Obrador’s nationalist agenda.
López Obrador has threatened to tear up contracts worth billions of dollars signed under previous governments. He argues that his predecessors were influenced by corrupt forces and personal favors.
Last year, U.S. Trade Representative Katherine Tai requested dispute settlement consultation under the United States-Mexico-Canada Agreement, saying the moves to nationalize certain industries represent a step backward for regional competitiveness and North American energy integration.
Overall, the Biden administration says Mexico is favoring state-owned oil and power companies at the expense of American energy firms. López Obrador has referred to his political project as the Fourth Transformation of the country.
Moving supply chains out of China
Foreign investors hope for a breakthrough during the meetings — a key opportunity not just for the U.S. but for North America, said Shannon O’Neil, vice president and senior fellow for Latin American studies at the Council on Foreign Relations.
“The U.S. government is using tariffs, export controls and other trade tools and allocating hundreds of billions of dollars to move supply chains out of China,” said O’Neil, author of The Globalization Myth.
“This once-in-a-generation upheaval could and should benefit North America, particularly the Texas-Mexico border,” she said. “But just as the region is poised to benefit, Mexico is turning its back on North America by eroding democracy, ignoring insecurity and putting in place nationalistic policies in energy, food and more.”
North Texas investors and economic leaders argue that López Obrador’s policies could have ripple effects across Texas. They are watching a dispute over corn that arose after the Mexican government said it plans to ban imports of genetically modified corn for human consumption and perhaps eventually for animal feed.
“Immigration, energy and corn,” said Al Zapanta, a longtime Republican and CEO of the Dallas-based U.S.-Mexico Chamber of Commerce. “We need some clarity on those issues. And we need to get control of our border.”
Feeding the tiger
Enrique Marroquin, a longtime energy executive, president of Hunt Mexico, a unit of Hunt Oil Co., is now vice president of Grupo Zaro, a freight trucking company that exports everything from tequila to wine — “just about anything that crosses the border” rumbling along the Interstate 35 corridor that connects North Texas to Mexico.
“I think if anything the summit helps provide some needed accountability,” said Marroquin. “AMLO wants to nationalize all these projects, like energy, but he would still have to feed the tiger [Mexican economy] and he has no money for the tiger without investors.”
López Obrador’s administration needs to rein in violence that threatens the country’s social fabric and safety of foreign investors, and, unfortunately, it’s common practice for foreign companies, including energy conglomerates, to pay off organized crime just to operate, he said.
“The problems are many,” he said, “but so are the opportunities.”
