This Time, Ignoring Mexico's Crisis Will Be Fatal

I think it was former Canadian Prime Minister Pierre Trudeau who said that living next to the United States was like sleeping next to a bear - you notice every twitch.

For Mexico, it's been more like getting regularly crushed by that bear.

In the Nation, Jeff Faux examines how the perverted incentives of NAFTA and Wall Street have exacerbated Mexico's political weaknesses to create a narco state on the verge of revolution.

Another infusion of cash to the Mexican economy, unacknowledged in the official statistics, is the roughly $25 billion in illegal drug exports to the States. Today, with remittances, oil prices and tourism depressed, the narco trade is probably Mexico's largest single earner of hard currency.

NAFTA and the neoliberal ideology it represents are certainly not the root causes of narco-trafficking. But they have been major factors in its recent monstrous growth.

For starters, the trade agreement created a two-way overland superhighway for contraband; the Mexican drug lords use the dollars they have earned from their exports to import guns, aircraft and sophisticated military equipment from the United States to fight their territorial wars. By wiping out small Mexican farms that could not compete with heavily subsidized US agribusiness, NAFTA also expanded the pool of unemployed young people that provides the narco-traffickers with recruits. And banking integration under NAFTA made money laundering much easier.

Perhaps most important, NAFTA has helped maintain the corrupt network of Mexican oligarchs. The 1988 presidential election--which the then-ruling PRI had to steal from the PRD to win--shocked the establishment on both sides of the border. By opening up Mexico to US money and influence, NAFTA was a way, as the US Trade Representative said to me at the time, "to keep the Mexican left out of power."

Until the 1980s, Mexican drug (mostly marijuana) smuggling to the north was modest in scale and generally tolerated by successive PRI governments. Their message was: we don't care what you sell to the gringos, but no rough stuff here, keep it away from our kids and of course share a little of the profit under the table. But the US-backed neoliberals who took over the PRI in the 1980s had closer ties with the Mexican cartels. The brother and father of president and NAFTA champion Carlos Salinas--hailed in Washington as a good-government reformer--were widely accused of being connected to the drug business. In Salinas's first year in office his national police chief was found with $2.4 million in drug money in the trunk of his car.

SNIP

The entire relationship must be rethought. In this regard, Obama's abandonment of his campaign pledge to renegotiate NAFTA was a missed opportunity. A renewed debate over the trade deal could have spurred public discussion of the failure of neoliberal economics, the "war on drugs" and an immigration policy that ignores conditions in Mexico that drive people across the border. It could have been a forum to think through the question of how continental integration can work for working people rather than just investors. For example, what kind of cooperative transportation, energy and green industrial policies would make the people of three nations--now bound together in one market--globally competitive?

Obama's Wall Street advisers have no more interest in this sort of change than did Bush's. And without a new economic direction, life for the average Mexican will surely worsen and social tensions rise. Some Mexican friends point out that the revolution against Spain erupted in 1810 and the one against the US-backed dictator Porfirio Díaz in 1910. And in 2010... ?

In any event, Mexico's growing troubles will not stay conveniently on the other side of the Rio Grande. Build a ten-foot wall, and desperate people will find twelve-foot ladders. Free trade will, of course, continue to flourish; Homeland Security Secretary Janet Napolitano estimates that Mexican drug cartels are now operating in 230 US cities.

So, thanks to the people who brought you the subprime mortgage disaster, the credit freeze and the Great Recession, the next Mexican revolution may come closer to home than you think.

Read the whole thing.