Mexico and the US: Another Spin of the Wheel

The complicated security situation is heightened by Ambassador Ken Salazar’s continuous remarks

Mexico and the U.S. are two neighboring countries with a complementary yet complex relationship that seems continually committed to finding pretexts for new problems and differences.

In some cases, certainly, it’s not hard to find issues of possible contention and dispute.

But one can also visualize a situation that not only has enormous possibilities for economic integration but also for obvious development and benefit. As well as legal, ideological and rhetorical clashes and hurt feelings.

Having resolved — in principle — the conflict created by different interpretations of Mexico’s energy law reforms, what could now become a source of contention can be summed up in three concepts: security, legal certainty and the environment.

The complicated security situation is heightened by Ambassador Ken Salazar’s continuous remarks in recent weeks about the importance and need to provide security to society, since without it there can be no progress.

Salazar has been careful to stress that this problem is not unique to Mexico but also involves the U.S. and has highlighted the importance of collaboration between the two countries with respect to sovereignty. Which is why he told both presidents, “Without security there can be no prosperity and investment.”

But the point is not simply anecdotal. The possibility of the theft of raw materials or finished products, especially of advanced technology, is not a minor consideration for those who look to set up shop in Mexico.

The other issues are more contentious.

First, that of legal certainty, which refers to what economic analysts define as the “general business climate.”

“Investors demand certainty, reliability and transparency”* when risking capital, especially when dealing with the hundreds of millions or billions of dollars necessary to set up ancillary high-tech industries or chip manufacturing in Mexico.

There is no shortage of analysts, both inside and outside of Mexico, who have highlighted the uncertainty created by the current Mexican government’s rhetoric, its traditional bureaucratic barriers, apparent hesitancy to grant long-term contracts and its alleged tendency to act impulsively.

As unfair as this might be, this is the image that sticks to Andres Manuel López Obrador’s government and has been from the start, and it’s one that doesn’t help to attract foreign investment.

The other — the environment — is somewhat more esoteric and has its roots in the energy dispute, even beyond the legal issues; it forms part of a trend that creates barriers to the importation of products not manufactured in compliance with certain environmental standards.

And beyond the fact that it is written into U.S. law, it’s also a social demand, both from investor and consumer groups.

Or, as former Ambassador Jeffrey Davidow might say, the dance of the bear and the porcupine.**

*Editor’s Note: This quote, though accurately translated, could not be verified.

**Editor’s Note: This refers to a book written by Jeffrey Davidow, published in 2004, titled “The U.S. and Mexico: The Bear and the Porcupine.”