News Article

North American integration slides beyond probability

By staff, Amos Olvera Palomino

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México City, June 11th.- Integration is a short word. Yet, to have it written, embodying a multinational political, economic and cultural consensus, is a long and complex task. The transition from a manuscript to an action timetable requires a unique kind of statesmanship concocted with a grain of wizardry.

It took Europe about 40 years to reach its present status as a fully integrated region. Led by the late French President Charles De Gaulle and German Chancellor Konrad Adenauer, the European economic integration process began moving on April, 1951.

It got off the ground with the implementation of the European Community for Coal and Steel (ECCS) as proposed by French ideologue Robert Schuman. Signed by West Germany, Belgium, France, Holland, Italy and Luxemburg, this treaty was the first step toward European economic integration.

Six years later, the six nations approved Jean Monnet’s proposal to create the Economic European Community. This organization set the stage for the establishment in 1991 of the European Union (EU).

European nations have come a long way. Except for new members from Eastern Europe, they look alike. The French and German economies are much larger than others, but their overall features are the same.

Unlike Canada, the United States and Mexico which represent two different worlds.

For many years in the past, the American Way of Life has sounded like magic to most Mexicans. It still does. A short distance away, The American Dream has been always so close and yet so far. The way things appear now, it may have turned into the impossible dream.

For a while, globalization was pitched as a mandatory shortcut to prosperity; it was dressed up as the answer to fulfill Mexico’s yearnings for real social, economic and political betterment.

National and foreign champions of development hailed free trade as the groundwork for full-fledged integration in North America. A regional common market –it was assured—would bring Canada, the United States and Mexico closer together. The Distant Neighbors stuff would be no longer used to depict the relationship among the three nations.

With the North American Free Trade Agreement (NAFTA) in place, Mexico would shortly resemble its two associates up north. With common interests and objectives, the three countries would sit down, talk and do business as equals. Once in the mainstream of world-class progress, Mexico could set its sights on integration.

At first glance, NAFTA was the initial stage of a far-reaching and long-lasting deal. However, 11 years after the trilateral trade accord became effective, its overall priorities seem about to hit the skids. A series of political, financial and economic events --occurred in the meantime—have sparked controversies that often jerked the United States and Mexico in opposite directions.

Regional integration proved delusory and fit only for professional daydreamers. During a 10-year period, Mexico has been unable to match the pace of advance set by its top business partners. On the contrary, while the United States and Canada move forward, Mexico steps backward.

Under four consecutive administrations, the Mexican government and big-time entrepreneurs have successfully pushed substantive reforms in the nation's economic structures. Highlights of the neoliberal doctrine, adopted since 1982, feature free access to local markets and divestiture of major utilities. Growth rates, however, underscore a deep slump.

Rather than narrowing, the gap between Mexico and its two North American trade partners has broadened. Stagnation remains stubbornly rooted as Mexico's economic policies apparently preclude a turnaround that could improve the lot of some 40 million people living below the poverty line.

The situation reached the kindling point after statistics showed that over the past five years, some 2.5 million Mexican illegal aliens entered U.S. territory in search of work and eventual integration. To have one million Latins taking the streets in California, Illinois, New York, Texas and Colorado, Arizona and Georgia, among other states, put the icing on the cake.

Such a massive and well organized demonstration prompted a harsh response from the Establishment. After three weeks of quiet, the White House announced the deployment of 6,000 National Guard Groups and confirm plans to build a 500-mile curtain along the Mexico border. Regardless of the benefits U.S. businessmen reap from abundant, cheap labor, the increasing stream of Mexican undocumented immigrants has become national security issue.

Within the framework of NAFTA, Mexico has failed to perform the job expected –and even taken for granted-- from a well-equipped and resourceful associate. Cash was not the matter. Hard currency has flowed hugely into the nation’s treasury, according to the figures released quarterly by Mexico’s Federal Reserve Bank (BdeM).

A recent report issued by the Mexican Fed indicates that during the present administration, oil revenues amounted to 280.3 billion dollars. That is, a 54% increase over the same period in the Zedillo government (1994-2000). Last year, Pemex, the state-owned oil monopoly, posted all-time high profits amounting to 48 billion dollars well above results presented oil giants like Exxon Mobil, Royal Dutch Shell and Chevron –Texaco.

As oil prices keep booming and cash keeps rolling in. The report also notes, however, that up to 80% of the fiscal surpluss has been used for mounting and –the BdeM’s chairman Guillermo Ortiz contends— wasteful government operating expenses. No wonder Halliburton is ready to gain a foothold in Pemex and manage the corporation's revenues soundly. The prospects of Halliburton getting its act together inside Pemex should help U.S. and Mexican money changers appreciate the rewards of dealing with a country like Mexico.

Undocumented migrants working in the United States also chipped in with 70 billion dollars during the same period. Oddly, the BdeM sustains a tight money supply policy that keeps the economy strapped.

Curiously, too, foreign debt is the lighter burden nowadays. Liabilities abroad have boiled down to around 65 billion dollars, according to published reports. Critical financial woes –BdeM has pointed out-- derive from domestic debt commitments such the Banking Bailout Fund Package (IPAB) and the Private Investment for Infrastructure Development Program (Pidiregas).

Set up by ex President Zedillo and orchestrated by Ortiz as Secretary of the Treasury, the banking bailout alone accounts for approximately 130 billion dollars while private investors collect dividends on a 90-billion-dollar invoice. Meeting these commitments, Ortiz has insisted lately, compromises the nation's economic growth over the short and the long terms.

The bottom line here is that the Bush administration demands economic expansion south of the border before bilateral differences can be ironed out. Meanwhile, the American president has put border militarization under way and hardliners spell out a series of stiffer actions.

Long sought after by the Fox government, a comprehensive immigration accord with the United States is out of the question. Integration returned to where it belongs: Wonderland. The Bush recipe holds, however: Free trade. (Amos Olvera Palomino)

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