North America from the Mexican Perspective

The Catalyst met with former Mexican President Felipe Calderón in his Mexico City office in late April. After his term ended in 2012, the National Action Party leader taught at Harvard University. Now based in Mexico City, he spoke with Catalyst editor William McKenzie and Bush Institute Economic Growth Director Matthew Rooney. In their interview, he touched upon his earliest recollections of the United States and Canada, the potential growth of North America, and the dangers of isolationist pressures.

What was your first encounter with the United States? Did it confirm or challenge your assumptions?

To be honest, most kids from my generation had very bad feelings about the United States. Attention at that time was pretty focused on the war in the 19^th century between Mexico and the U.S. The predominant idea about the United States was imperialism. In general, I shared that perception.

The first time I went to the U.S. changed the perception. I was a congressman studying for a master’s in economics and won a contest that invited me to a gathering at Texas A&M. The second time, I was invited by the American Embassy to visit Washington D.C., New York City, and a couple of states. I also visited Yellowstone and some national parks. I started to change my perception of the United States and the American people.

What really made the strongest impression was when I went to Harvard in the late 1990s to attend a mid-career program in public administration. That changed completely my perception of the American society. I had the chance to learn a lot and admire some of the values of hard working, responsible, and honest people.

The anti-American feeling started to change in Mexico after the North American Free Trade Agreement.  I was in Congress when NAFTA was enacted in 1994. The U.S. started to see us as an ally, neighbor, and partner.

The anti-American feeling started to change in Mexico after the North American Free Trade Agreement. The U.S. started to see us as an ally, neighbor, and partner.

What was your first encounter with Canada? Did it confirm or challenge your assumptions?

I never had been to Canada until when I was in Boston in 1999 and 2000. I took my family to Niagara Falls and that was my first physical encounter with Canada.

However, I had met some Canadians before, including some that came to Mexico to explore the idea of NAFTA. We participated in several forums. In some moments, we shared the challenging situation of being neighbors of the United States. There was some kind of identity between us. We talked a lot about that.

You mentioned coming of age as Mexico was negotiating NAFTA and opening to trade. What was your conception of Mexico’s place in the world? What countries did you see as Mexico’s key partners?

The general perception was that NAFTA was going to be a terrible failure for Mexico. It was seen as so dangerous. People considered it impossible for Mexican companies to compete with Americans. They thought we would lose a million jobs and that farmers would be unable to compete. They thought that would invoke an even more terrible issue in the countryside.

 A lot of the issues were related, on both sides of the border, with a lack of knowledge or understanding of how the economy works. The basic principle of trade is that it expands chances for anyone. Trade increases the size of the cake to provide more opportunities for anyone: consumers, producers, buyers, sellers.

That’s the perception I had with NAFTA. At the time, most of the people did not have that idea. NAFTA definitely changed the modern history of Mexico. Most jobs Mexico has been able to create since then have been related to exports and trade.

Trade increases the size of the cake to provide more opportunities for anyone: consumers, producers, buyers, sellers. … NAFTA definitely changed the modern history of Mexico. Most jobs Mexico has been able to create since then have been related to exports and trade.

Do Mexicans understand the United States and Canada as well as they should?

No, unfortunately. And the statements in the presidential contest, the radicalization of the candidates, the anti-Mexican issues, and the protectionism are dramatically changing the perception of the United States in Mexico and around the world. That is a problem for the United States. 

It’s curious that, on both the Democratic and Republican sides, protectionism is an issue. That is generating a step back in improving the perception of America. Whatever the outcome of the election, the United States runs the risk of being extremely divided internally and completely isolated externally.

It’s curious that, on both the Democratic and Republican sides, protectionism is an issue. That is generating a step back in improving the perception of America. Whatever the outcome of the election, the United States runs the risk of being extremely divided internally and completely isolated externally.

It will be very difficult for the U.S. to face some dramatic challenges ahead. Are we going to see another deep recession as in 2009? To me, China is coming down. Europe and Japan are not doing well. On another front, the threat that ISIS represents will require very bold decisions in the future.

Being divided internally and isolated externally is not the best position from which to make difficult decisions. In my opinion, whoever is going to be the President of the United States, and I say this with all due respect, should look at how to reduce the number of confrontations internally. I see the American society very divided right now. It is very easy for some candidates to look for a scapegoat. In the end, we are such a scapegoat.

Reconciling the American sides is going to be important. It will help restore America’s good image and reputation.

When you took office, what were your hopes or expectations of relations with the U.S. and Canada?

I was an absolute believer in the positive nature of the relationship. Of course, I wanted to improve that and go deeper. Fortunately, I had a very good relationship with President Bush and his staff. Unfortunately, the size of the problems was much bigger than anyone was expecting.

My main priority in Mexico was the rule of law. Providing security from crime and the cleanup of corruption was quite important. And I got strong cooperation from America.

Organized crime is clearly a challenge and not only related to drugs. Organized crime is overtaking the state. It’s overtaking law enforcement institutions and the police corps. I’m not talking about the policeman in the corner. I am talking about all policemen in the towns and even in one big state. Mexico needs to stop this process. I tried to do that. We reversed the trend. Of course, the trend is very long.

A lot of what you are talking about has to do with personal relationships, but nations have their own interests. How do you balance those with personal relationships? Do national interests always trump relationships or do relationships make it easier to deal with divergent interests?

Definitely, personal relationships help a lot in foreign affairs.  They are a very important part of the job.  If you do not have a great personal relationship, or are unable to talk or have contact, it is quite difficult.  Everything is about staffs. I am glad we had a good connection with the United States and Canada. 

Yet sometimes the national interests or national pressure are quite difficult to deal with.  Look at the sensitive issue of immigration. Some folks in Mexico, including my predecessor, pushed for such a radical way of dealing with immigration reform in the U.S. that it was difficult to moderate.

The idea was to get the whole enchilada, as it was said at the time. They wanted Mexican immigrants to become U.S. citizens.  That was a mistake for several reasons.  Most of the people just want the opportunity to work.  They want to work on a temporary basis.  They want to shell beans in the winter or landscape in the spring or tend crops in the summer, whatever.  They may also have their own small piece of land where they want to finally live in their communities.

But pushing for the full package created a situation where an important part of the American society probably felt some kind of threat. And that was the most important obstacle to getting any reform.

Sometimes national pressures make it hard to maneuver.

Setting aside the price fluctuations for the moment, what should the North American partners do to seize the opportunity to make more use of their energy reserves?

It is clear that Mexico finally passed a strategic energy reform. It was blocked in my time.  But we got some important changes, like more flexible contract-based performance.  Let’s say that I was trying to make a touchdown but I got just a first and ten. 

There is an incredible opportunity now. North America will be completely independent from the Middle East. And it will be independent from Venezuela. That will change the equation dramatically.

It is important to see North America as a region. The economic consequences, and the guarantee of energy supplies, are for the region.  The idea is to use this opportunity to invest in oil. In order to do that, Mexico needs to have fair play. That means no corruption, no discretionary conditions, and full transparency and disclosure.

If I had gotten energy reforms through when oil was at $120 per barrel, we would have $1 million more per day.

When you are thinking about North America as a whole, what would be the ideal outcome at the North America Leaders’ Summit on June 29 with respect to energy? What should the leadership of the North American group do with that?

They should develop a common strategy to secure the supply and to provide more incentives for long-term investors.  How to do business in Mexico, for instance, should not be only a task for our government. The North America Summit could be a good place to talk about that.

We are looking at a world where there are a lot of economic troubles. The region that could be the most competitive with real economic growth is North America.

It is not easy for Japanese and German cars to survive, or to have an easy victory, with such a competitive region. That is good news for everyone and the region is growing because we opened more  chances for trade.

I hope the next North America Summit will realize that situation. In a world that is suffering a lot, the only region growing, and with real chances to manage difficult circumstances, is North America.

In a world that is suffering a lot, the only region growing, and with real chances to manage difficult circumstances, is North America.

What do you see as the unfinished business of North America? In addition to energy, what are opportunities for additional growth and competitiveness? And where should the governments be working together?

Clearly, the United States has an incredible advantage in information technology. The new economy is coming from that side, as long as we are able to expand the capabilities of markets.

The largest opportunities are in Mexico. A growing economy in Mexico implies larger markets for American products. We need to focus on that. We also need to expand markets globally. North America needs to play a role in that strategy, talking about global trade, strategies for the Trans-Pacific Partnership, and expanding markets domestically.

On the other side we need to think about our common challenges. I am very involved in environmental issues and common strategies are needed there.

A growing economy in Mexico implies larger markets for American products. We need to focus on that. We also need to expand markets globally. 

Finally, it is important to understand the role of the rule of law in prosperity. For Mexico, it could be very helpful to strengthen legal institutions and law enforcement institutions, such as the police corps, attorneys’ general offices, and judges.

To what extent do the drug cartels challenge Mexico’s institutions?

What I found when I took office was that organized crime was taking over institutions. At the beginning, we were thinking it was only small towns and villages. But they were capturing even some states, in some cases with the complicity of the cops.

We stopped the process and started to reverse it. Still, it is unfinished. The only way to do this is to build stronger, more reliable institutions and to face the criminals. It’s outrageous but completely needed.

There was a very old logic in Mexico that said it is stupid to fight the criminals. You need to arrange with them some kind of situation. That was the most stupid thing that Mexico did in the past.

When Mexico was only exporting drugs to the United States, criminals were not interested in taking control of local governments. They just wanted to pass through to the United States and operate with bribery on both sides of the border. When Mexico started to be a consumption market, a middle class country after NAFTA and two or three governments provided macro-economic stability, these guys understood that there was a market here. Retailers need to control a territory, so that was the beginning of the violence, the beginning of taking over a state.

Once organized crime is controlling the authority in a town, the business for them is not drugs anymore. It is to extract the rents of the people. That is extortion and that is the name of the game.

Once organized crime is controlling the authority in a town, the business for them is not drugs anymore. It is to extract the rents of the people. That is extortion and that is the name of the game.

This problem is huge. At least at the end of my tenure we were advancing. I did send in a lot of federal troops. But the real problem is that governors don’t want to take the responsibility to clean up their police problems.

This is a very sensitive issue for me. With the support of President Bush, I established a vetting process in the police corps, federal agents, the attorneys’ general office, the Army, the Navy. If anyone does not pass the exams, they don’t go into the police corps. They get fired.

The process was successful and provided a big database. I tried to do the same at the local level. The real problem was there. A lot of police corps was in the hands of criminals.

But because we are a federal system we needed to decide this by consensus. One governor said that most of the police officers were not improving. If I fired them, he said, they would go join the criminals. I told him, “Mr. Governor, most of your policemen already are a problem. They are not going to join organized crime because they are already using stolen cash and weapons.”

But I lost the consensus. They canceled the polygraphs and exams for police officers. The end of the tale is one of the governors was over the state where the policemen kidnapped, and probably killed, the 43 college students. He was the governor who led the cancelling of the vetting processes.

The U.S.-Canada partnership includes NORAD, a political-military security alliance. Would you want to see Mexico aspire to a similar relationship with the United States? Do you see a day when Mexico could join NORAD?

It is difficult to say. Honestly, I can see a lot of political resistance in Mexico.

Of course, I considered that we have common challenges and we need to act together in terms of security and I did so. We had in my tenure the highest collaboration with American agencies and American forces. We talked about intelligence and security not only for the Mexican people but also for the American people.

We had in my tenure the highest collaboration with American agencies and American forces. We talked about intelligence and security not only for the Mexican people but also for the American people.

One example is that we realized that one of Moammar Gaddafi’s sons was planning to live in Mexico. We had intelligence on his plot, which included involvement with a Canadian, to mobilize a massive global operation that would take him here through Europe and Canada. We worked with Canadian intelligence officials to stop that.

We did a lot of things acting and understanding that national security was a common question. We cooperated with and exchanged a lot of information with Canadian and Mexican agencies. No doubt, most of the captures of the most wanted criminals in Mexico benefited from cooperation with American agencies. I don’t know why we need to hide that part. It is true and good.

We need to cooperate and work together in terms of security but to be very specific about a joint armed forces is still difficult to say. That is something we can work together on and actually we have been working together.