The US-Mexico Relationship

Photo: vallariee

Spanning 1,954 miles, the U.S.-Mexican border has been one of the most discussed topics in this election cycle—though primarily for its security implications.  Equally important is the U.S.-Mexican economic relationship; Mexico is the second-leading purchaser of U.S. exports and the third-leading supplier of U.S. imports.  This equates to hundreds of billions of dollars in annual trade.

The large amount of trade is mostly tied to the North American Free Trade Agreement (NAFTA).  Prior to implementing NAFTA in 1994, U.S. exports to Mexico were valued at $41.6 billion; in 2014, they were valued at $294.2 billion, representing a 478 percent increase in a relatively short time.  All other measures of trade and foreign direct investment between the two countries have similarly skyrocketed. 

NAFTA has not been great for everyone, however.  The U.S. manufacturing industry, especially those businesses involved with computer, automobile, and electronic parts, saw hundreds of thousands of jobs displaced to Mexico due to the elimination of trade barriers and cheaper labor in Mexico.  Meanwhile, approximately 2 million Mexican farmers lost their jobs because NAFTA allowed an influx of heavily subsidized U.S. corn and other goods into Mexico.  Smaller farms in Mexico simply could not compete.  

There are also security tradeoffs to having an increasingly open border, with drugs and unauthorized immigration being two of the biggest concerns.  Approximately 90 percent of the cocaine entering the U.S. crosses through the U.S.-Mexico border.  Additionally, while the number of Mexican immigrants living in the U.S. illegally has declined, they still constitute approximately 52 percent of all unauthorized immigrants.  Due to the resulting security concerns, some residents of the border states—California, Arizona, New Mexico, and Texas—are taking matters into their own hands.  In Arizona, for example, a small paramilitary group called the Arizona Border Recon patrols the border to prevent drug smuggling and the directly correlated violence.

In this sense, it seems like an improbable conundrum:  We need easier mobility across the border to facilitate improved trade relations and industry growth, but that also allows for the increased trafficking of drugs and people.  Meanwhile, greater barriers along the border hurt cross-border industries, especially those that use maquiladoras, or Mexican factories, that may import materials from the U.S. tariff-free for assembly, processing, or manufacturing, and then export the products back to the U.S. for sale. 

As the presidential candidates continue to debate the best way to manage the border, U.S.-Mexican relations are reaching new levels.  A pedestrian bridge between San Diego and Tijuana’s international airport will be completed in December.  Yes, travelers will be able to walk across the border for a small fee, thereby avoiding the long lines at typical ports of entry.   Officials will be watching closely to see if this will facilitate general improvements for cross-border industries or result in more security risks. 

Alana Garellek is an International Producer at The Cipher Brief.