Mexico: Highest U.S. Priority in the Western Hemisphere


The most important bilateral relationship in Latin America for the United States is that with Mexico. Mexico is one of America’s top two trade partners and largest export markets. Economic ties support millions of jobs on both sides of the border. Mexico is an indispensable partner in improving management of migration across the southern border. Cooperation with Mexico is essential to getting a better handle on the deadly flows of drugs into the U.S. from Mexico, as well as getting better control over the billions of dollars of drug sale profits and illicit arms headed to criminal groups in Mexico.

Mexico-U.S. is the quintessential example of an “inter-mestic” relationship: many of the key issues are simultaneously international and domestic for both countries. The historic, family and cultural links between these two neighbors add to the complexity and politically sensitive challenges for both governments in their efforts to guide the relationship well. For Mexico and the United States, no other international relationship has more day-to-day impact on the daily lives of their citizens.

Both U.S. President Joseph Biden and Mexico’s President Andres Manuel Lopez Obrador (AMLO) have much to lose if the bilateral relationship goes off the rails. Yet they have some significant differences in policy priorities and in their capacities to deliver effective cooperation. Biden came to office with a deep understanding of Mexico and the region, having worked on these issues as Vice President in the Barack Obama Administration. Lopez Obrador realizes the importance of economic ties with the U.S. for his country’s well-being but has long been hesitant to be too close to Mexico’s big northern neighbor on other issues, such as public security and ownership of energy resources and networks.

The Biden Administration is trying to build trust for broader cooperation through high-level visits to forge new cooperation mechanisms, generous vaccine donations, and with patience where priorities differ. The two governments are working toward a presidential meeting, building cooperation and establishing working dialogues on migration, commerce, security, pandemic recovery and the environment.

Migration: A Top Priority That’s Difficult to Manage Well

At the top of the U.S. priorities list is migration and related issues of management along the U.S.-Mexico border. The U.S. objective is to devise a humane and efficient system for handling migrants within the constraints of U.S. law and in cooperation with Mexico. This approach seeks to encourage more effective Mexican enforcement and management of northward migrant flows into Mexico from Mexico’s southern border. It also seeks to improve cooperation with other regional countries to check migrant movements toward the U.S. U.S. officials hope Mexican authorities will more effectively help with the many migrants who do not have good cases for being granted asylum in the U.S., by sending them out of Mexico or by considering them for settlement in Mexico, and by working with other countries in the region. In this cooperative scenario, the U.S. and Mexico would also work together to address over the longer term the “root causes” pushing Central American migrants to leave their home countries. These include poor job opportunities, serious criminal violence, corrupt government practices and the effects of climate change on livelihoods in certain areas of Central America.

Mexico and the U.S. are taking steps in this direction, but the continued overwhelming numbers of migrants reaching the U.S. border underscore the challenges to success. The arrival of some 15,000 Haitian migrants at the Texas border in September 2021 highlights the ability of irregular migrants to reach and cross Mexico to the U.S.-Mexico border with apparent ease. Both the U.S. and Mexico need significant improvements in their capacities and authorities to deal with migrants and improve their ability to work together with better results.

Migration has been a serious challenge for the Biden Administration from the start. Promising a new approach that would differ from the ultra-strict policies and practices of the Donald Trump Administration, while still trying to deal with the pandemic that had closed most cross-border travel, the Biden Administration was immediately faced with large waves of migrants (mostly from Central America) seeking entry. The U.S. has relied on health regulations to send many border crossers back to Mexico. Record numbers have continued to be apprehended at the U.S. border thus far in 2021. There also appears to be little prospect for significant reform of U.S. immigration law at present, despite the Biden Administration’s call for reforms.

AMLO’s government had worked out a modus vivendi with the Trump Administration under the threat of new trade sanctions and had increased efforts to slow migrant flows, agreeing to have large numbers of migrants wait in Mexico while the U.S. considered their cases for asylum. When Trump lost the Presidential election, Mexican authorities were not up to stopping the resulting, greatly increased surge from Central America. The Mexicans increased enforcement efforts in 2021, but their reinforced efforts were not able to stop the Haitians who arrived in September 2021, for example. Mexico has long underfunded its border and refugee assistance agencies, and AMLO’s Administration continued to limit budget funding as part of its austerity program. Although they did deploy the National Guard to help control the northward flows, Mexico’s immigration services and agencies have been overwhelmed, and Mexico’s asylum system is unable to handle the record numbers of additional requests being received from migrants.

The Biden Administration is being assailed from both sides of the U.S. political spectrum for its handling of migration at the border. Observers note that Mexico’s inability to effectively control its southern border, its underfunded border and refugee services and its reliance on a poorly trained national guard for enforcement services make the country an imperfect partner. Nevertheless, the AMLO and Biden Administrations have committed “to jointly managing safe, orderly migration that respects human rights,” and in a September meeting of the new High Level Economic Dialogue (HLED), they agreed to cooperate on the priority of promoting sustainable economic and social development in southern Mexico and Central America. The challenge now is for this cooperation to deliver results along the chain of migration flows. This will require a sustained, multiyear effort.

Trade: Rebounding, But Much to Do

The second-biggest priority in U.S.-Mexico relations is to strengthen bilateral trade and efforts to build back better, for a post-pandemic era, the cross-border economic relationship and support prosperity. U.S.-Mexico trade and investment support some 5 million U.S. jobs and several million jobs in Mexico. This cooperation must embrace Canada, the third partner in the U.S.-Mexico-Canada Agreement (USMCA), which replaced NAFTA (the North American Free Trade Agreement) in mid-2020.

USMCA’s implementation immediately faced the complication of the COVID-19 pandemic, which closed much cross-border activity and resulted in greatly stressed supply chains in North America and around the world. Pre-pandemic U.S.-Mexico trade amounted to about $1 million per minute. At present, U.S.-Mexico trade figures are moving rapidly back toward 2019 cross-border trade levels, especially for Mexico’s exports. With Trump-era tariffs on China, Mexico was the United States’ number-one trading partner for much of the last two years, but with only a small advantage over Canada. Rising oil prices are now increasing the value of Canada’s exports to the U.S. The re-opening of US borders to Mexico and Canada will also facilitate recovery.

As the U.S., Mexico and Canada prepare for a post-pandemic era, they are focused on making sure that the USMCA is well implemented, making full use of its new cooperative mechanisms as well as its problem-solving and dispute settlement processes. From the perspective of the millions of farmers, businesses and workers who rely on North American trade, the USMCA offers the prospect of a stable set of rules within which they can operate and work with governments to overcome problems and build opportunity. This “certainty” should help spur investment and growth.

The three governments are working hard to grapple with USMCA’s challenges, including on U.S. concerns about Mexican policies and actions in such sectors as agriculture, energy and labor. Mexico also has concerns about U.S. approaches to issues such as “rules of origin” for vehicles and treatment of seasonal fruit. These differences are to be expected in a trading relationship that is as broad and deep as the U.S.-Mexico relationship is. It is key that the processes and mechanisms for resolving differences work effectively.

The U.S. and Mexican governments this year agreed that they need an additional forum to collaborate on important economic issues that go beyond trade. So in September 2021, ministers from both countries, including U.S. Vice President Kamala Harris, launched a renewed High Level Economic Dialogue (HLED) with an agenda aimed at strengthening supply chains, border management, jobs skills and stakeholder dialogue, as well as helping reduce migration flows. Done well, this new process can bolster bilateral economic relations with more inclusive processes and concrete improvements in how the countries engage to bolster competitiveness and prosperity. Progress reports from the working groups, which the ministers established, are due in early November 2021.

The new HLED recognizes the value of sustained dialogue and cooperation, as demonstrated by the U.S. and Mexico from 2013-2016. Learning from the pandemic that exposed weaknesses in cross-border supply chains is a key part of the new agenda, as are efforts to address the root causes of migration.

There are four pillars for HLED’s work. The first pillar, “building back together,” includes steps to support the creation of more resilient supply chains and modernizing the U.S.-Mexico border. Semiconductor and medical device supply chains will get a first review, with electric vehicle and pharmaceutical supply chains as additional options. Importantly, the work includes renewed attention to improving border-crossing processes and infrastructure, as well as better dialogue with private and sub-federal public stakeholders.

The HLED’s second pillar, “promoting sustainable economic and social development in Southern Mexico and Central America,” will entail the hard work of trying to identify a mix of programs to produce good results. Even the best work here will take years to bear fruit and will likely include attention to infrastructure and promotion of private-sector investment. The third pillar, “securing tools for future prosperity,” can foster needed cooperation on cybersecurity and resilient information technology networks. The fourth pillar, “investing in our people,” gives needed attention to workforce development, such as applying best practices for upskilling workers, and can usefully target specific groups in need and Small and Medium Enterprises (SMEs).

The HLED’s orientation toward building opportunities to grow economies and jobs through collaboration is particularly encouraging. This can augment USMCA’s work to implement rules of the game for trade and investment. Both processes offer valuable opportunities for expanded dialogues with stakeholders. Such a “democratization” of bilateral economic relations can have positive effects by involving more citizens in shaping the economic interactions between the two countries. For example, the HLED could allow for a fresh look at managing the U.S.-Mexico border “as a whole,” with input from local communities and actors to supplement conversations among federal agencies alone.