In the 10 years of NAFTA, trade has essentially doubled in volume; financial flows among the three countries have also grown exponentially; and NAFTA has in a sense transformed the relationships among the three coun- tries. Taking a look at NAFTA is probably a good place to start a discussion of deepening North American integration.

What is the context in which this discussion is taking place? NAFTA has certainly been ”” on balance ”” a very positive development for the three countries. Trade has more than doubled; financial flows over the last decade among the three countries have reached a trillion dollars; and more importantly, 96 percent of all of our trade and investment relations go on without any major difficulties. The three countries therefore have learned that if we work together, if we agree upon a series of objectives and establish a series of rules to achieve them, we can go a long way indeed.

It is also true that, as in many other places in the world, there is growing skepticism about trading and liberalization. I believe the three gov- ernments have the will to move for- ward in this process of the North American region and will, therefore, have to address this serious communications deficit about what NAFTA is really capable of, and for what NAFTA is responsible. Borrowing Robert Pastor’s idea , I would s ay t ha t in terms of the origin al architecture of NAFTA, it has been quite a success. Perhaps, especially in Mexico, NAFTA was over- sold as a solution to all of our eco- nomic problems. Free trade is responsible for certain things and is capable of others.

Lastly, as a result of NAFTA, another factor: The trilateral relation- ships and the respective bilateral rela- tions have evolved very weakly over the last 12 to 15 years. I truly believe that Mexico, the United States and Canada are moving and have moved away from this concept over the last decade, borrowing the ideas of Alan Riding of ”œdistant neighbours” to become something more of sort of ”œstrategic partners.” We are probably not there yet, but I think that we have evolved very quickly. If we look at the trend lines and not at some headlines, we will probably find out that the tri- lateral relationship and the respective bilateral relationships are quite suc- cessful and they will probably contin- ue this way in the future. There is also the case that we are living in a much more difficult and challenging inter- national environment. With global- ization in the 1990s, there was trade liberalization, notably NAFTA and the Uruguay Round in the GATT, leading to the creation of the WTO in 1994. Those days of brimming optimism about globalization and free trade are a memory.

In the 1990s Francis Fukuyama wrote of ”œthe end of history,” and we also spoke of a ”œclash of civiliza- tions.” I do not think that either of those paradigms accurately describes the complex multilateral and international environment that we are liv- ing in. That certainly attracts the attention of our three governments and our societies. It is not as easy a crusade as in the ”˜90s in terms of moving forward with continuing trade liberalization.

At the same time, Mexico is undergoing a catharsis in its for- eign policy. Mexico’s changes in for- eign policy largely reflect the changes in its internal political climate. And there is a catharsis in Mexico about the type of relationship that Mexico should have with North America, and especially with the United States. I do not think we will see the end of that catharsis in two years, but I am sure it is a process that will conclude and will probably end with our thinking more seriously about how to better take advantage of our geographical proximity and of our North American region.

And finally, these discussions are taking place in a context where security ”” the security of nations ”” has certainly become a part of our concern, particularly with the United States. The regrettable events of September 2001, and subsequent events, have cer- tainly raised the concerns of many governments about their security, and in a sense have constituted a focal point of what we have experienced essentially throughout the 1990s. We must think very carefully about the issue of security. This is the context in which this discussion takes place. Now I will move toward the objectives we see in the future of North America.

I submit that there are three essen- tial objectives:

  • The first one is to enhance the job-creating capacity of our free trade agreement. One of the big discussions is about how to accept what NAFTA has to do to reach a net increment in the number of jobs, and this is a com- plex international debate. Economists will argue that there has been a net increment in jobs. Some jobs have disappeared in certain sec- tors in the three countries, because that is the whole nature of free trade. But that was not the case. It has helped trans- form our economies and project them into the 21st century, into much more modern economies. So I would like to add that whatever comes next for North America on the economic front should be enhancing the job- creating capacity of the trade agreement we already have. There are plenty of things that are being discussed. Should we make more standards and regu- lations that will facilitate trade and reduce the cost of doing business in the region? Can we move to common markets, at least on certain specific eco- nomic sectors? Can we revise and try to get a common policy one-trade and e-commerce? There are many others.

  • The second objective is to strike an appropriate balance between security and the facilitation of trade, the legitimate and secure flow of goods and people. We cannot afford to do otherwise. Mexico has $620 million per day of trade with the United States. Literally thousands of containers go through and almost a million people on any given day. That is important for employment in Mexico and for employment in the US. And I suspect that, with certain particularities, the border relationship between Canada and the US is probably going through the same. If we are going to think seriously about the challenges we are facing, especially from Asia and Europe as a region, we must ensure that problems are addressed and the legitimate flow of people is flu- ent along both borders. And yes, we do need to have modern and secure borders.

I would argue that we have three NAFTA infrastructures in our borders. The increase of trade has been expo- nential and yet the investment of resources in the technology and infrastructure of our borders has not grown exponentially. So we need to think seriously about those issues. I will emphasize the idea of striking a bal- ance between security and the facilita- tion of trade and the movement of people. National security is not about eliminating 100 percent of the risk. That is not possible. It is about pricing a risk, calculating risk and taking poli- cy decisions based upon these calcula- tions. So that is the important challenge we have in terms of security.

The border of the 21st century is being redefined as we speak. The border of the 21st century will be com- pletely different from the one we have traditionally had throughout the world. The concept of the border as a line will probably be erased during the next fifty years. This type of discussion is useful because it sheds light on these matters, but we are changing the con- cept of our borders and it is one of our major challenges.

Security cooperation over the last few years has probably become one of the most dynamic areas of cooperation in the bilateral relationship between Mexico and the United States. I sus- pect that is also an important and dynamic issue between Canada and the US. Each day we are thinking more seriously about what aspects we can try to modernize in terms of security. So there again is an important chal- lenge: to strike a balance between addressing security concerns and facil- itating the secure and legal flow of people among our countries.

Mexico has changed a lot in this respect. There has been cooperation over the last two years. Both Canada and Mexico have signed smart bor- der agreements with the United States, very similar in nature and in objectives. Some of the cooperation that results from these agreements was unthinkable five years ago in Mexico. It is a very important ele- ment of our bilateral and trilateral relationships.

  • The third objective of this process has to do with establishing mech- anisms that will provide legal, orderly and secure migrations between the countries, ones that respect the human rights of the migrants and their basic needs. Establishing mechanisms, regard- less of how much migration we have, is a different story.

Among the three countries there are currently still very acute income differentials and develop- ment differentials (described by Sidney Weintraub in this issue). If you have such differentials along with complementary populations and complementary labour markets as the driving dynamics, to some extent you will definitely have a powerful incentive for migration. So that is also one of our major challenges. The number of international migrants has been roughly 3 percent of the total population of the world over the last thirty years, according to the last UN count, 175 million people around the world. But it has certainly become a more important issue in multilateral, regional and bilateral fora throughout the world, an issue in the domestic agendas of many countries that must be addressed and tackled.

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Mexico and the United States started to talk for the first time in 2001 about addressing migration as a shared responsibility. In February of that year, President Fox and President Bush, both new in office, sat together, and for the first time the issue of migration was formally introduced in the bilater- al relationship. With Canada we have established the Seasonal Agricultural Workers Program.

Globalization has done two things with respect to international migration.

  • One, it has facilitated or mitigated many of the previous obstacles to the flow of people across borders.

  • At the same time, it has generated much more information in the so-called transnational communi- ties about migration, and it has attracted attention because the pace at which different factors have been liberalized is not the same for all labour groups.

So the third objective is establishing mechanisms to provide for a legal, orderly and secure migration between the countries, regardless of how much migration we have. I think that is important to emphasize.

Finally, there are issues that should be tackled in the immediate future:

  • First, the private sectors of the three countries are well ahead of the governments of the three coun- tries in these discussions. And that is fine. But governments must make an important effort to hear the private sectors, to hear societies and try to facilitate this process. There is a risk of governments lag- ging behind in this process.

  • Second, what kind of process can we foresee? I would argue that we will not see a think tank as we did in the ”˜90s with NAFTA, a one time for all action, but more of an incre- mental process with different steps and different phases developing.

  • Third, largely because of the rea- son that I mentioned and the context in which this process is taking place, the three govern- ments will have to find a way to get societies involved in a much more active and a much more intelligent way than we did previously; if we do not, it is unlikely that we can move forward.

Are we going to have institutions for this process or not? I would not dis- card any possibilities at this time. I will simply say that if we agree on the objectives then it will be much easier to determine whether we need some form of institution to handle or to facilitate this process.

I believe that diplomacy finds in the 21st century its very essence in the need for nations to construct common visions about the challenges and about the opportunities that very rapidly change in the world. Certainly migra- tion, trade and security have become within the North American region the major challenges and opportunities.

I truly believe that we must con- struct these common visions, that debate is helpful for understanding and constructing common visions. We will need a lot of perseverance, because it is likely to be a long process. We will need a lot of creativ- ity on the part of the three societies, but mostly, we will need a lot of polit- ical compromise in order to push this process forward.

 

This article was adapted from a presentation at the IRPP conference “North American Integration: Migration, Trade and Security,” which took place in April 2004. The conference papers can be found on our Web site (www.irpp.org).

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