Mexican President-elect Vicente Fox, fresh from a historic victory that ended 71 years of one-party rule in his country, dropped in on U.S. lameduck President Bill Clinton just before Labor Day. He was brimming with ideas for further integrating their economies, including a proposal to open the border to more Mexicans seeking work in the United States.
The Clinton White House, which seven years ago sold NAFTA to Congress on the grounds that it would keep Mexican workers out, was unenthusiastic. Fox also visited Ottawa, where he proposed a single continental currency: the U.S. dollar. The Canadian response was frigid. "We're happy to maintain our own currency," sniffed Prime Minister Jean Chrétien.
Despite the rebuffs, Fox has opened up a discussion that will not easily be shut down--nor should it be. A former president of Coca Cola Mexico, Fox is a free-trader faced with the reality that NAFTA did not deliver on its promise to raise the living standards of ordinary Mexicans. Indeed, their frustrations voted him into office. Even Bill Clinton, who considers NAFTA one of his legacies, expressed his concern to Fox that it did not raise wages in Mexico.
At the same time, as in the United States and Canada, Mexican stocks are booming and the country's rich are getting richer. NAFTA has so tied together the three countries in trade and finance that--as the 1995 bailout of the holders of depreciated Mexican bonds vividly showed--Washington has a bipartisan commitment to placing a safety net under the big players in Mexico's financial markets.
Fox is now telling Washington that it is also responsible for those at the bottom. So long as Mexico is a place where 40 percent of the population makes less than $2 a day, he says, U.S. borders will never be secure.
His solution is a North American equivalent of the European economic integration project. In addition to open borders and a common currency, Fox wants aid for schools, roads, and infrastructure from the United States and Canada similar to the "social cohesion" funds that the richer countries of Western Europe provide to Spain, Portugal, Ireland, and Greece to help them grow faster.
The Europeans are attempting to ensure not only a reasonable distribution of income among member states, but a convergence of domestic social and political standards to prevent the competition for investment from becoming a race to the bottom. In contrast, NAFTA imposes standardized rules to protect the rights of investors, importers, and exporters, but it leaves human rights and the protection of workers and the environment up to national governments. This has allowed the Mexican business and military oligarchy to attract investment by suppressing independent unions and environmental activists through harassment, arbitrary arrest, and brutality.
The "liberal" administrations of Clinton and Chrétien have defended themselves by carefully limiting the subject of economic integration to trade and finance. Both claim to favor a social contract, but they say that insisting on it would affront Mexican nationalist sensitivity--which apparently permits gringos to dictate investor protections but not labor rights.
By proposing to extend NAFTA to labor market issues--including a demand for better treatment of Mexican immigrant workers in the United States and Canada--Fox has undercut the "Mexican sovereignty" argument for a narrow vision of North American economic integration. If the treatment of Mexican workers in the United States should be on the NAFTA agenda, why not the treatment of Mexican workers in Mexico? He thus provides an opening for negotiations to replace the botched NAFTA deal with a more balanced agreement that would address Mexico's need for faster growth as well as the concerns in Canada and the United States for workers' rights and environmental standards.
What might such a new continental bargain look like?
For one thing, the United States and Canada could commit themselves to sustained development assistance to Mexico for education, infrastructure, and environmental clean-up--not just help along the U.S. border, but investments in clean air and water in Mexico City and other places in the country's interior where pollution is even more threatening to people's health. An increase in legal immigration linked to greater Mexican efforts to stem illegal crossings could also be offered. And the United States could forgo the annual ritual of certifying that Mexico is making an effective good-faith effort in the war against drugs. Inasmuch as neither Republicans nor Democrats have any intention of decertifying Mexico, the process serves no useful purpose. It humiliates Mexico and perpetuates the myth that the source of America's drug problem lies there rather than here.
For its part, Mexico would commit itself to enforceable labor rights--including trade union democracy--and workplace and environmental standards that would rise toward U.S. and Canadian levels as Mexico's per capita income rose. Citizens of any of the countries would be able to bring action against violators in the courts of any other, and trade sanctions could be invoked against both violating companies and violating governments.
Many questions--including whether Fox could clean up and deliver Mexico's corrupted legal system to such a deal--would need to be answered. But the defeat of the Institutional Revolutionary Party (PRI) opens up the possibilities for reform of the judiciary and other public institutions calcified by seven decades of one-party rule. With credible safeguards, a new North American accord could have wide support in all three countries. For Canadians it would help protect their generally higher social standards from erosion. In the United States, many in the labor and environmental movements would welcome the chance to support a progressive internationalist program. The prospect of helping build an independent trade union movement in Mexico as an ally in fighting for higher wages and benefits across the continent could be particularly attractive to U.S. labor. In Mexico it would be in the political interest of Vicente Fox, as well as the Mexican left, to bring democracy to unions whose leaders have been in the pocket of corrupt PRI bosses. Certainly, among average Mexican families, the combination of social investment and an elevation of workers' rights would be popular.
Those in all three countries whose "internationalism" is limited to finding cheap labor and the freedom to pollute would doubtless oppose. So would those worried about an international agreement that required the United States to raise its own labor and environmental standards and do a better job of enforcing them. That alone is good enough reason to engage Señor Fox in some further discussion. ¤