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Timid on North American integration


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There was an interesting moment at the joint news conference by President Bush and his Mexican and Canadian counterparts following their summit Wednesday. When asked if their newly created "North American Partnership" would be a first step toward a European-like customs union, all three looked as if they were running for cover.

Most likely, they avoided the issue because the "Partnership for Security and Prosperity of North America" that they announced at their summit in Waco, Texas, fell far short of more ambitious regional integration proposals. The three leaders agreed that the 1994 North American Free Trade Agreement among the three countries is running out of steam and needs a second push, but their proposal to build on it was modest at best.

Bush, Mexican President Vicente Fox and Canadian Prime Minister Paul Martin essentially did what leaders usually do when they don't know what to do: They created a task force. They agreed that, within 90 days, their new Cabinet-level task force will come up with concrete proposals on how to advance cooperation on security, trade and economic issues.

Among the presidents' guidelines for the new task force are seeking common border security strategies, improving intelligence cooperation, increasing energy supplies among the three countries, eliminating redundant testing and certification requirements for exports, and reducing cargo bottlenecks along the border.

That's all very nice, but it's miles away from a much more forward-looking proposal released earlier this week by the Council on Foreign Relations, an influential nongovernmental U.S. think tank.

The council's report, titled "Creating a North American Community," proposed that the three countries adopt a common external tariff and an outer security perimeter, and that they create a North American investment fund to help reduce the income gap between Mexico and its two northern neighbors, which is the main cause of massive emigration from Mexico.

In short, the report called for elevating NAFTA to a North American Community by 2010, based on the premise that each member will benefit from its neighbors' success. That's exactly what the 25-member European Union has done with great success over the past two decades with countries such as Spain, Ireland and Portugal.

"The three leaders aimed too low at their summit," said Robert Pastor, head of American University's Center for North American Studies and a member of the Council on Foreign Relations panel. "Their joint statement lacks any vision on what North America should be, or any ambitious goals, like a customs union or an investment fund."

It doesn't even address the need to deepen educational ties and turn North America into the largest educational-exchange network in the world, Pastor said. Indeed, there are only 13,000 college students from Mexico and 27,000 from Canada in the United States, compared with 80,000 from India alone, according to the U.S. Institute of International Education.

Andres Rozental, a former senior Mexican diplomat who participated in the council's report, told me Wednesday that while the new partnership is better than nothing, "unfortunately, the presidents didn't talk about a community." That would have been important, "because when you start talking about a community, you are giving a signal that you are starting something that will evolve into a higher level of integration."

My conclusion: There are powerful reasons that the Waco summit should have aimed higher. First, there is no immigration reform that will halt the exodus of Mexicans unless the United States and Mexico reduce their income gap. If Bush is serious about halting illegal immigration, he should focus on helping to reduce the disparity in Mexico-U.S. per capita income.

Second, with the 2004 expansion of the European Union and the planned creation of a China-Southeast Asia free-trade zone in 2007, the United States, Mexico and Canada will need to step up their trade agreements to remain competitive.

Third, Bush could breathe easier if he signed a more ambitious North American integration deal before Fox leaves office next year, to protect all three countries against a possible populist victory in Mexico's 2006 elections. Two Mexican presidential candidates are already criticizing NAFTA.

No matter how you look at it, the three leaders were far too timid.

As Martin admitted at one point during the news conference, "What we're really talking about here is not a big thing." He tried to correct himself by adding that "what we're talking about is big progress," but we all knew he had been right on the mark with his first remark.

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