How to Advance North American Cooperation at the Texas Summit
The United States,
Canada, and Mexico make up the world's most prosperous trading
block under the North American Free Trade Agreement (NAFTA). But
relations between partners have cooled since September 11, with
both Canada and Mexico declining to support the United States in
liberating Iraq, and Canada opting out of America's missile defense
progress is still possible when President George W. Bush, President
Vicente Fox of Mexico, and Prime Minister Paul Martin of Canada
meet in Texas on March 23 to discuss how to strengthen security
while making the region more prosperous.
On the table is a
draft "Initiative for North America," a plan that seeks to enhance
economic integration under NAFTA, establish more effective border
security, and assure members' access to energy. Achieving these
goals will help the three nations compete economically against
rising Asian powers like India and China where labor costs are a
fraction of those in the Americas.
Integration. President Bush would like to preserve the economic
benefits of NAFTA without excess regulation or financial
commitments. Both Canada and Mexico, however, favor turning NAFTA
into a regulated customs union, like the European Common Market,
where rich partners help the poor.
For North America to be more competitive, Mexico-especially-needs
economic reform. Despite 10 years of increased trade under NAFTA,
Mexico has recently generated only about 20 percent of the jobs it
needs for the 1 million new workers that enter its labor force
annually. Mexico's underdeveloped capital market still provides
little credit to small start-ups and a weak education system
prepares too few citizens for modern jobs, while state and private
monopolies thwart growth in the energy and telecommunications
Security. President Bush seeks equal inputs to border security
to keep out terrorists and criminals. Both Canada and Mexico would
like help paying for security enhancements and President Fox has
made the free movement of labor into the United States the
centerpiece of his foreign policy.
All three countries face threats from transnational crime, drug
trafficking, and terrorism. Canada has military and police forces
that function at similar levels as those in the United States. But
generous immigration and asylum policies permit easy entry for
potential criminals. Despite improvements, Mexico lacks adequate
security forces to protect its shores and borders. Its military has
an outdated mission to suppress internal unrest and its poorly
trained and paid police are no match for criminals with
Blackberries and cell phones.
Energy. President Bush seeks to develop local energy supplies
to reduce dependence on potentially unreliable vendors such as
Venezuela, whose president, Hugo Chávez, has threatened to
halt oil exports to the United States. Both Canada and Mexico need
foreign investment to tap their reserves.
Rising energy demand means exploiting new reserves as older ones
become depleted. The United States consumes about 19 million
barrels of petroleum per day compared to about 4 million between
Canada and Mexico. Together, Canada and Mexico are America's top
providers, exporting half of their output to the United States-3.8
million barrels per day.
U.S. development of the Arctic National Wildlife Refuge could add
about 1 million barrels per day. Canada's tar sands that rival
Saudi Arabia's reserves, and Mexico's potential, could be increased
through foreign investment. Yet new fields will take time to
develop, and inefficiency and corruption still scare off investors
in Mexico's state petroleum industry.
this mix into a tri-national strategy for prosperity, border
security, and energy independence might seem daunting. Fortunately,
Canada and Mexico can be willing partners. In fact, it was Mexico
that originally advocated NAFTA.
To help build a
better North American community, the three leaders should agree
prosperity, competitiveness, and job growth by accelerating tariff
reductions, eliminating remaining trade barriers, and cutting tax
and regulatory burdens. By helping Mexico extend education to more
of its citizens and adopt free market reforms, Canada and the
United States could help relieve pressures that cause hundreds of
thousands of Mexicans to migrate north each year.
by developing common security protocols and joint training
opportunities for law enforcement and military personnel employed
where tri-national cooperation is essential-such as on border
patrol and maritime interdiction missions. More effective local
governance can help. Already some Mexican state authorities, U.S.
municipal authorities, and Central American police are sharing
information on migrants and gangs. National leaders should welcome
these local initiatives.
challenges by urging the development of viable resources in Alaska
and Canadian tar sands and encouraging Mexico to de-monopolize and
privatize its state energy industry to attract investment. On the
demand side, all three countries should work toward dismantling
various energy subsidies and let markets guide the development of
disagreements aside, President Bush should praise his partners'
achievements. Canada has implemented Smart Border technology and
made efforts to improve ports of entry. Mexico's President Fox
pushed through congress a civil service reforms that will help curb
public corruption. He has moved aggressively against narcotics
trafficking and crime. Despite low job growth, his country is
fiscally sound-paying bills and accumulating record reserves.
Now is a good time
to draw North America's three giants closer by expanding free
markets, coordinating security, and adopting a common strategy to
assure energy resources for the future. If the proposed "Initiative
for North America" shows promise, it should be extended to Central
America and the Caribbean, smaller nations that share both the
neighborhood and similar interests.
Stephen Johnson is
Senior Policy Analyst for Latin America at the Kathryn and Shelby
Cullom Davis Institute for International Studies at The Heritage