A fish asks another fish: “How is the water today?” And the other fish replies: “What is water?” Professor Robert A. Pastor told this story at the beginning of his presentation at the Stanford Faculty Club on Friday February 24, 2012 in an event co-sponsored by the Gould Center. His goal was to illustrate how very little attention is paid to the concept of “North America” in U.S. politics: “we are so submerged with the issue that we ignore it,” he said. In his new book, The North American Idea, A Vision of a Continental Future (Oxford University Press, 2011), Robert A. Pastor charts the rise and decline of North America, and ultimately argues that the United States, Canada and Mexico would all greatly benefit from a stronger regional integration. This blog post is meant to share Prof. Pastor’s presentation with the greater SLS community.
Today, most of U.S. citizens do not realize that the largest trade and energy partners with the United States are not China or Saudi Arabia, but Canada and Mexico. This integration took a new meaning in the early 1990s, when successive bilateral trade agreements among Canada, the United States and Mexico led to the creation of the North American Free Trade Agreement. From 1994 onwards, the rate of trade growth, social and economic integration, and legal migration kept increasing exponentially, evidencing clearly how these three countries are capable of achieving great productivity within a very short amount of time. Unfortunately, the North American integration really peaked in 2001. It all went downwards from then on, to the detriment of the economies of all three countries.
The reasons for this decline are multiple according to Pastor. First, the 9/11 attacks on the United States led to a contraction of the exchanges with the United States. The border with Canada was immediately closed for security reasons, and never really fully recovered its post-9/11 levels. Second, the entry of China into the WTO gradually led to the decline of Japan, Canada, and then Mexico as the largest source of imports in North America. About a third of the factories in Mexico on the border with the U.S. were shut down and moved to China. Third, the author argues that this integration suffered from one of the flaws that we now find in the European Union: we expanded before we deepened. Specifically, there was very little investment in terms of infrastructure, which, in turn, led back to asymmetry. If the North of Mexico has dramatically changed since the first days of NAFTA, the South remained virtually unaffected by it, simply because the output of new factories could not go anywhere.
So what can we do about this, and more importantly, why should we even care? Pastor argues that it is essential for North America that all three countries be world leading economies. Mexico thus needs to develop dramatically in order to get there. The author also argues that it is crucial for the U.S. to become leader in issues that were previously purely domestic matters, but now require the participation of Canada and/or Mexico if successful resolution is to be achieved. This is the case for labor mobility, infrastructure, environment, security, the fight against drugs, etc. The solution, Pastor says, is to achieve regulatory conversion without which any stronger unification would virtually be impossible. OK, so if the reasons in favor of this integration are so overwhelming, why not do it? Some would argue that the citizens of Canada, the United States and Mexico would be highly suspicious about one another, or that a widespread nationalistic sentiment would prevent such integration. In fact, a survey conducted by Pastor shows that North American citizens love each other more than they love any other country, and that all three countries would be in favor of better cooperation. The problem, says Pastor with a dash of exasperation, might reside in the fact that a small minority remains resistant to change while the other majority is still looking for a leader. The current GOP front runners simply ignore the issue of NAFTA; indeed, Pastor observed that the 2008 Democratic candidates engaged in a race to the bottom as to who would be the most against NAFTA. They even threatened to re-open NAFTA if their “demands” on environment and labor matters were not met. The criticisms seem to have stopped when Canada said it would then seek to change the oil provision.
Prof. Pastor took many questions after his presentation, and it is worth mentioning here the most important one (the elephant in the room one would argue): the narco-trafficking in Mexico. Prof. Pastor acknowledged that to date, this phenomenon was probably the most important deterrent in the public opinion against a stronger union. However, with the opening of the border with Mexico came profound political change. From the late 1980s to 2000, Mexico made the most significant progress in terms of political regime, and transitioned from a deeply corrupt to a democratic regime. Violence on the border has increased since 2006, and it will take about a decade until the Mexican judicial system is profoundly reformed and the police are appropriately trained and reorganized. One has to admit however, that the violence in Mexico might be somewhat inflated: it is a much less pronounced phenomenon than in other Latin American countries. It remains concentrated in 3 cities and is mostly gang related. Interestingly enough, Pastor made the point that most of the guns recovered in Mexico with respect to violence come from the United States, and wondered what would be the U.S.’ reaction should the roles be reversed: if Americans were killed because of assault rifles purchased in Mexico, would the U.S. administration accept Mexico’s justification based on its constitutional right? Probably not. The United States has a shared responsibility in this, explained Pastor.
Professor Robert A. Pastor concluded his presentation by quoting the great American architect Daniel Burnham: “Make big plans; aim high in hope and work, remembering that a noble, logical diagram once recorded will not die.”