Latin America expert Shannon O’Neil

The director of CFR’s U.S.-Mexico Initiative explains why Mexico’s transformations over the last three decades matter for the U.S.

Shannon O'Neil is a senior fellow for Latin America Studies at the Council on Foreign Relations and director of its U.S.-Mexico Initiative. She's lived and worked in Mexico and Argentina and travels extensively in Latin America. A Fulbright scholar, she's taught Latin American politics at Columbia University and testified before Congress on U.S. policy toward Mexico. She's also the author of Two Nations Indivisible, which illuminates why Mexico's political, economic and social transformations over the last three decades matter for the U.S. Before turning to policy, O’Neil worked in the private sector as an equity analyst.


Tavis: Tonight, a conversation about U.S. and Mexico relations. We’ll do that in just a moment. Stay with us.

Mexico today remains a country of contrasts, with drug wars and violence on the one hand and a rising middle class and a solid global economy on the other. Despite our shared border and millions of U.S. citizens, of course, who trace their heritage to Mexico, our perceptions of that country remain rooted in the controversy over immigration reform and headlines around drug-related violence.

Shannon O’Neil seeks to change that with a new text called “Two Nations Indivisible: Mexico, the United States, and the Road Ahead.”

She is a senior fellow for Latin American studies at the Council on Foreign Relations. Dr. O’Neil, good to have you on this program.

Dr. Shannon O’Neil: Thanks. Great to be here.

Tavis: Let me start by asking from our perspective what the administration’s intended goals were for the recent trip of President Obama to Mexico, and whether or not those goals were worthy in your eyes and whether or not they were met.

O’Neil: Sure. Well, Mexico is one of the most important countries for the United States, so whether it’s the food on our tables, the parts in our cars, the consumers for our products, the drugs on our streets, this is an incredibly important relationship.

So this was an opportunity for Obama to go down very early in the term of the new president, and then really to meet and greet each other, but begin to set the agenda for how the new teams, the new president and new team in Mexico, but then Obama’s second term, his new team, will begin to work together.

Tavis: What was accomplished?

O’Neil: They did this. They began, they had conversations both publicly and then also privately, and what’s really important is they set a tone that we’re going to have a big focus on economic goals, and sort of the economic integration, how we’ll work together to improve both economies together.

They also talked about other things. They talked about immigration briefly; they talked about security briefly, so many of the issues on the table. But what’s most important is it then allowed, the next day after Obama left, the ministers, the sub-secretaries, all the people who will be working on things to begin that process.

Probably the most important thing that came out of it was they announced a high-level economic dialogue where they’ll bring ministers from both countries together to talk about issues.

On the U.S. side, that’s going to be headed by Vice President Biden. So what that does is shows that someone with a lot of political weight, a lot of history in Washington, is going to be there to help bring together all the different agencies and departments on the U.S. side to try to coordinate the way we work with Mexico. So that, to me, was a big step forward.

Tavis: Speaking of how we work with Mexico and the road ahead, there are a lot of Americans still smarting about NAFTA. So with that in the rearview mirror, or with that as a guidepost, where does this relationship head economically?

O’Neil: Well it’s interesting. NAFTA gets a really bum rap, and there are, in any trade agreement, NAFTA included, winners and losers. But you look at the last 20 years, since we’re almost at the 20-year anniversary of NAFTA. We’ve seen trade between Mexico and the United States almost quadruple, so it’s half a trillion dollars’ worth of goods that goes back and forth.

But more important than the amount, which is impressive, is what is going back and forth, and that has transformed. So today, for everything that comes in from Mexico, so quote, unquote, “made in Mexico,” almost 40 percent was actually made in the United States by U.S. workers.

So what that means is jobs on this side of the border and jobs on this side of the border and jobs on that side of the border today are tied, and it’s pieces and parts that are moving back and forth.

So when we think about partners in trade, if you look at China or Brazil or even the European countries, things that are coming in from there, less than 4 percent was made by U.S. workers.

So in an era of globalization, the reality of globalization, Mexico is by far and away the best partner not just for U.S. companies, but for U.S. workers.

Tavis: Maybe the best in comparison to China, perhaps, and other places, but again, those Americans who happen to still be smarting about this are smarting in part because they believe that the numbers indicate that we got the short end of that stick.

So the relationship with Mexico may be better than in comparison to some other country, but what do you say to those who think that we still got the short end of the stick in that deal?

O’Neil: There’s an interesting study that came out recently by two professors at Harvard, and one is at the University of Michigan. They have all this confidential data on economic flows and information, and they look at it and they find that multinational companies, the ones that produce here but produce elsewhere, instead of actually reducing the number of jobs by offshoring or near-shoring, they actually on average create two new jobs here in the United States for every 10 jobs they create abroad.

So actually, these companies are creating jobs. Now we see movement, so some plants close and other plants open, but what’s interesting is you see creations of jobs.

In fact, one interesting example, in the State of the Union, President Obama, the only mention of Mexico was that Ford was bringing jobs back from Mexico. But that’s actually not what has happened. Ford has created jobs here in the United States in the last few years, but the way it’s been able to do that is by actually creating jobs in Mexico.

So by opening factories in Mexico and having factories here and having them work together, they’re able to make Ford cars more competitive globally, increase the overall pie, and create jobs on both sides.

So that’s actually what’s happening here, and particularly with Mexico more than almost any other country.

Tavis: The so-called “drug war.” Talk to me about how that has impacted this relationship between Mexico and the U.S.

O’Neil: When you look at Mexico today, and many things have changed in good ways. The economy has changed in a good way; politics has changed in a good way. It’s a democracy now; it wasn’t 20 years ago. Socially it’s changed. There’s been a rise in the middle class.

But what has changed for the worse is security, and here particularly the last administration we saw the number of deaths soar to almost 70,000 people. This is really related to the drugs back and forth and organized crime more generally.

One of the biggest markets is the United States, particularly from Mexico. So the problems are transnational, the problems are shared. What we’ve seen over the last five or six years is the solutions now being more shared.

So the United States and Mexico are working more closely, there’s more resources going to Mexico through the (unintelligible) initiative and others, but there’s also more than the money.

There’s more cooperation back and forth between law enforcement agencies and the like. So this is a real change over the last five or six years. Before, we barely worked with Mexico. We were very cautious about working together. Now we see much, much more cooperation on the security side.

But this is going to be a long-term change. This is not something that’s going to change overnight.

Tavis: Let me ask you both sides of a political question. First the Mexican side. So they have a young, new president, a guy in his forties, when he got elected. We had a young, new president.

You’ve got these two young guys meeting at this summit just weeks ago in Mexico. Tell me more about how the political wins and how this shifting and changing in Mexico impact us in this relationship.

O’Neil: So what we’ve seen is the return of the PRI. The PRI was the long-ruling party for 60, almost 70 years. It was the one party, and really was an authoritarian regime for many years.

The PAN came in, won the presidency for two terms, so that was 12 years, and now the PRI has come back. There’s some that worry it’s going to bring back its old authoritarian tendencies and the like. There’s others that see it as a new party.

Now whatever you think, where it lands on this, sort of reformed or not reformed, Mexico itself has changed. So the executive and the legislative branch works, the president has to negotiate with congress. Congress is made up of three different parties, so there’s always coalition politics happening.

They’re actually fairly good at negotiating with congress, something we’ve had a harder time here in our own country. The Supreme Court is stronger down there, the press is stronger, civil society’s stronger.

So Mexico has changed in many ways. What we see under this new president, what he’s come out of the gates with, is a very ambitious economic agenda. So he’s passed several economic reforms. He has other big ones on the plate, especially energy reform, tax reform.

If these go through, this can mean a lot of good things for the United States because of how tied we are economically. If Mexico does well, so too will the United States.

Tavis: So the flip side of that political question, the first part, of course, is what’s happening on their side of the ledger. The other question is what’s happening on our side of the ledger.

We know that there is this immigration reform debate happening now. We will see where that goes. But more broadly speaking, many of us have been – chagrined isn’t a strong enough word, but just troubled by the fact that in so many ways we’ve treated Latin America like our backyard, and we’ve got to get better about that. That’s my own sense of it.

Yet that is not untied to who the players are in Washington. So it’s one thing for Obama as president to behave in a particular way, but since you referenced Congress a moment ago, how are the attitudes shifting in Congress, if at all, about how we treat Mexico and our neighbors to the south?

O’Neil: It is important, and for a lot of things that affect Mexico. It’s not the State Department that runs the relationship; it’s Congress and other divisions.

Tavis: Absolutely.

O’Neil: Other departments that matter. It does matter; some of the things that matter for Mexico do fall out on partisan lines, but not everything, right? We look at both parties.

Both parties have groups that support immigration, others that are a bit more wary of it. Both parties have groups that support trade and others that are more wary of it.

So I think some of this divides in factions rather than straight along party lines, but issues, especially like immigration, will matter very strongly for Mexico and where they’re going in the future. So will trade. So will the border and how we either improve the infrastructure or don’t, how we deal with security at the border or don’t. All of those will matter for Mexico and our relationship.

Tavis: How do we best navigate this relationship, this journey together on the road ahead?

O’Neil: I think what we need to do is really take Mexico as a partner and not see it as a problem, which we often do. There’s so many things if it benefits Mexico, will benefit us. Part is this trade.

If companies are working on both sides of the border, they can increase their profits, they can increase their employment, they can increase things on both sides.

Immigration, if we work together to resolve some of the problems, can make people happier on both sides. The border itself, which often we worry about and we hear about this in Congress, Mexico has a part to play in that.

But if we work together, we’ll be much better at strengthening that relationship in letting the good pass quickly while also diminishing the bad that goes back and forth than we are today.

Tavis: The new book from Shannon K. O’Neil is called “Two Nations Indivisible: Mexico, the United States, and the Road Ahead.” Shannon, good to have you on the program.

O’Neil: It’s been great.

Tavis: That’s our show for tonight. From Los Angeles, I’m Tavis Smiley. Thanks for watching, and as always, keep the faith.

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Last modified: June 11, 2013 at 6:54 pm