San Antonio Express-News (Sunday)
Boosting U.S.-Mexico alliance
In his first 100 days, President Joe Biden set out to rebuild vital economic and political relationships with our allies around the world. Mexico, a crucial ally and one of our leading trade partners, has been at the top of the list.
As the Biden administration engages south of the border, so-called “ally-shoring” offers an approach that would strengthen bilateral cooperation and support economic recovery.
On April 26, Vice President Kamala Harris met virtually with President Andrés Manuel López Obrador about immigration. A key topic is March’s uptick in border apprehensions of single Mexican males who left home due to the lack of jobs. This increase shows the urgent need to work together on short- and long-term economic issues.
To boost this bilateral collaboration, ally-shoring offers the Biden administration a strategy to rebuild our economy with neighboring countries that share our values through further integration of our supply chains, sourcing and production. The goal is to protect our collective economic and national security. A report from the U.S.-Mexico Foundation offers an insightful road map.
The first step would be for the U.S. to work with Mexico and Canada to build on efforts to coordinate during the pandemic on critical supplies, research and development, and vaccination trials. Second, the U.S. could provide incentives for private industries to reroute supply chains and identify opportunities for co-production and sourcing with Mexico’s exports and emerging sectors.
Third, the U.S. could work with Mexico to develop modern and efficient border infrastructure to facilitate trade by creating more effective logistics, risk management and security mechanisms. Finally, to enhance rule of law, bilateral collaboration could focus on additional measures that ensure transparency and carve out clear rules for institutions.
The U.S. and Mexico would build on an already robust foundation of supply chain integration and strong relationships. The new United States-Mexico-Canada agreement lays out additional groundwork for strengthening commercial ties and synchronizing regulations.
The COVID-19 pandemic revealed weaknesses in critical U.S. supply chains — notably an overreliance on China — that led to disruptions and layoffs. In February, Biden called for a review of supply chains to mitigate future risks. To build greater resilience, the administration could enhance cross-border production, trade and innovation with Mexico.
Ally-shoring could also boost economic recovery. The U.S. economy is already on the upswing, driving economic expansion in Mexico. Remittances to Mexico hit a record high in 2020, and U.S. demand for goods has led to a spike in Mexican exports.
However, ally-shoring faces obstacles in Mexico.
López Obrador is known for his inward-looking, nationalistic approach. He has been hesitant to collaborate with the U.S. At the moment, Mexico does not appear to be positioning itself as the ideal U.S. counterpart to mitigate supply chain risks. Since his election in 2018, López Obrador’s uneven stance on private contracts has hampered investor confidence.
He has pushed for regulatory changes that give preference to state-owned oil companies over private renewable plants. This has not only led to legal disputes with investors but may be at odds with Mexico’s USMCA obligations.
Institution-building could present an even greater challenge. In the past few months, security cooperation reached an all-time low. Amid rising tensions, Mexico’s Congress recently passed a law to limit U.S. enforcement operations. The distrust will make it difficult to collaborate on measures to confront corruption and Mexico’s weak rule of law.
López Obrador continues to pursue an agenda widely characterized as anti-business ahead of June’s crucial midterm elections. Despite criticism that his administration mismanaged the pandemic and the economy, no real opposition has emerged.
López Obrador’s ongoing quest for vaccines creates a diplomatic opportunity. The Biden administration sent 2.7 million AstraZeneca doses to Mexico in March but could offer a bigger supply to garner goodwill and lay the basis for broader partnership.
While ally-shoring faces hurdles in the short run, it offers a path forward for long-term U.S.Mexico collaboration that would make both countries safer and more prosperous. Biden must continue to look for ways to incentivize Mexico to work more closely on pandemic coordination, supply chains, sourcing and institution-building.