Brookings: Topics - North America

The End of Nostalgia : Mexico Confronts the Challenges of Global Competition

Diana Villiers Negroponte, ed. — Fri, 14 Jun 2013 00:00:00 -0400

Brookings Institution Press 2013 160pp.

Editor Dr. Diana Villiers Negroponte recieved her JD from Georgetown University and practiced law specializing in international law and aviation matters. She played an active role with the U.S. Chamber of Commerce in Mexico during the negotiations for the North American Free Trade Agreement. She has assembled colleagues from both sides of the Rio Grande to examine the steps necessary for this proud nation to continue its momentum toward effective participation in a highly competitive world. With one foot on North America and the other in South America, it is a land in transition, from a one-party political system steeped in a colonial Spanish past toward a modern liberal democracy with open markets.

Excerpt:

In 1993, this author’s speech before an association of engineering companies in Guadalajara on the opportunities presented by the North American Free Trade Agreement (NAFTA) was greeted with significant criticism. The prospects of competitive trade implied a threat, and all the questions from the audience centered on how their businesses might survive. Twenty years later, the same companies have either gone out of business or adapted to the reality of international trade and global competition.

Metamorphosis is not easy; economic and political transformation, in particular, is hard. However, a proud trading people can find confidence in their heritage.

Today, Mexico has become a manufacturing center, with family-owned companies engaging in international trade and acquiring new technologies. Protectionist regulations are being dismantled, and young business leaders learn colloquial English, study at international business schools, and connect easily with foreigners. The young men and women whom I met over two years at a business summit held in the colonial city of Queretaro are not resigned to the new reality; instead, they seek to thrive in a competitive world. Their network is global, including colleagues encountered at school, at professional conferences, and on social media. They interact with foreigners with enthusiasm; they take on new international contracts with excitement.

But the old ways are hard to eradicate. The yearning for the predictability of government contracts, dependence on political patrons, and reliance on family ties have not disappeared. The authors of these chapters therefore agreed on the need to analyze and relate how the old Mexican system is changing. Metamorphosis is not easy; economic and political transformation, in particular, is hard. However, a proud trading people can find confidence in their heritage. Continued democratization and exposure to foreign competition is inevitable, but efforts to put the brakes on that process should not be ruled out. Therefore this volume is also about protest and conflict deep within the Mexican political economy.

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The End of Nostalgia is available in both hardcover and eBook formats:

What's Inside

Piecing Together the Puzzle of Mexico’s Growth - What happened to the lusty 7% growth of the 960s and 1970s?
Arturo Franco (Harvard University)
What might explain Mexico’s lack of competitiveness? A comprehensive review of the factors that —rigid labor markets, inadequate infrastructure and access to finance, size of the informal labor sector, high cost of energy, poor education system, and Chinese competition yields no easy answers.

Unlocking Mexico’s Political Gridlock - Is the Mexican legislature a "Siesta Congres?"
Arturo Franco (Harvard University)
In the last 20 years, Mexico has moved from a hegemonic party system under the PRI to a political equilibrium in which the three major political parties together account for 90 percent of the votes but none exceeds 42 percent. Since the election of a president from the PAN in 2000, no president has enjoyed a majority in congress, and coalitions must be formed to pass legislation

Energy Challenges for the Pena Nieto Administration – An examination of the serious decline in petroleum reserves in Mexico
Duncan Wood (Director of the Mexico Institute at Woodrow Wilson International Center for Scholars)
With corrupt practices, political interference and lack of accountability within PEMEX, the state owned petroleum company, opportunities for natural resources may be missed. Wood presents specific solutions to augment energy supplies and is extraordinarily optimistic about Mexico’s renewable energy potential.

Toward Regional Competitiveness Agenda: U.S.–Mexico Trade and Investments – How trade and investments are strategic drives of the U.S.-Mexico relationship
Christopher Wilson (Mexico Institute of the Woodrow Wilson International Center for Scholars)
Mexico is the United States’ second-largest export market, and the United States is Mexico’s largest export destination. However, the high growth rate between bilateral trade and investment has slowed due to the increasingly low cost of labor. Wilson posits how to spur trade and increase regional competitiveness through a Trans-Pacific Partnership.

The Priority of Education in Mexico – An examination of the quantity and quality of education in Mexico
Armando Chacon (Mexican Institute for Competitiveness)
Pena Nieto’s administration has yet to propose a budget that provides the funding needed for critical education reforms. Yet, significant value is added with respect to health, absorption of new technologies, and parenting skills for every additional year of schooling beyond sixth grade. Chacon examines and provides recommendations around improving education public policies.

Security Policy and the Crisis of Violence in Mexico - A critical assessment of current public security in Mexico
Eduardo Guerrero (Lantía Consultores)
Under Presidents Calderón and Peña Nieto, intentional homicides have diminished. But serious problems remain: the slow pace of reforming to criminal justice procedures, inadequate resources to reform the correction system, and inadequate domestic intelligence capabilities. Guerrero presents eight recommendations tailored to address the main sources and consequences of organized crime–related violence.

The Merida Initiative: A Mechanism for Bilateral Cooperation – Tracing the evolution of the Merida Initiative
Diana Villiers Negroponte (The Brookings Institution)
The Merida Initiative has evolved from a mechanism for the delivery of sophisticated, custom-made equipment to being a developer of programs that support training of law enforcement and gang prevention. Now, the Mexican government is reexamining its security policy, and U.S. priorities have also shifted. Negroponte asks if Merida has run its course, and if so, what mechanism should emerge to continue U.S. support and funding.

Mexico and the United States: Where Are We and Where Should We Be? – An expert view on the U.S.-Mexican bilateral relationship
Andres Rozental (Eminent Ambassador of Mexico)
Rozental demonstrates his deep knowledge of the U.S.-Mexican bilateral relationship, based on thirty years of negotiations with the U.S. government on maritime boundaries, nuclear proliferation, border issues, and immigration. Rozental recommends de-scrutinizing the bilateral agenda and prioritizing trade, investment, climate change, and the Trans-Pacific Partnership.

ABOUT THE EDITOR

Diana Villiers Negroponte

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Are Public Pensions Keeping Up with the Times?

Richard W. Johnson, Matthew M. Chingos and Grover J. "Russ" Whitehurst — Wed, 12 Jun 2013 09:56:00 -0400

Retirement plans for public employees in the United States face serious challenges: By their own calculations, states and localities are $900 billion short of the funds they need to set aside to pay for benefits they have already promised their employees, write the Urban Institute’s Richard W. Johnson and the Brookings Institution’s Matthew M. Chingos and Grover J. Whitehurst. But the problem is far more serious than currently imagined. What states accountants won’t admit, Chingos, Whitehurst and Johnson argue, is that the funding problem is much worse than states’ calculations show.

The underfunding problem has two key components: First, by their own calculations, most states are not contributing enough to keep up with the pension promises they are making to their employees. Second, states’ calculations seriously understate the extent of the funding problem. Most states assume that they will earn an average rate of return of 8 percent a year on their pension funds, a highly unlikely outcome in the current economic environment. This unrealistic assumption still produces a staggering unfunded liability: $0.9 trillion in 2011. Using a more reasonable assumption of a 5 percent return increases the unfunded liability to $2.7 trillion, these scholars estimate, which implies that the average state has only funded half of its pension promises. A funding gap of $2.7 trillion is more than four times the $607 billion in general outstanding debt on states’ books in 2012, Chingos, Whitehurst and Johnson report.

And many public employee pension systems also have design features that, even if the pensions are properly funded, compromise state and local governments’ ability to attract and retain the best employees, these writers assert. Young workers have little incentive to join the state’s workforce unless they plan to remain on the payroll for at least 25 years. Those who leave their jobs earlier forgo a significant portion of the retirement benefits from their employer. This is because most pension systems provide very steep rewards late in employees’ careers, penalizing those who work for the state for “only” 10 or 20 years. But there is also a problem at the other end of the career ladder, with pension systems punishing employees for staying too long past normal retirement age. This design feature makes it difficult for the state to retain experienced older workers, many of whom have specialized skills and deep institutional knowledge that are difficult to replace.

As debate swirls around how to properly fund public employee benefits, this report assesses the real challenges facing state and local government retirement plans and details the problems facing public employee pension systems across the country. Chingos, Whitehurst and Johnson’s comprehensive examination of the existing research on this topic highlights the many problems facing these pension plans, including the underfunding that threatens states’ economic futures and outdated design features that cripple states’ ability to recruit and retain the best public servants.

In the video below, Chingos and Johnson discuss the issues raised in the paper:

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Are Public Pension Plans Keeping Up With the Times?

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The Hidden STEM Economy: Key Findings

Jonathan Rothwell — Mon, 10 Jun 2013 10:36:00 -0400

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Jonathan Rothwell

Crime–War Battlefields

Vanda Felbab-Brown — Thu, 06 Jun 2013 11:00:00 -0400

In her new article, “Crime-War Battlefields,” published in the June-July issue of Survival, Vanda Felbab-Brown discusses the evolution of war since the end of the Cold War and the eventual rise of policy and analytical focus on the intersection of counterinsurgency, counterterrorism, and anti-organized crime efforts. She explains how over the past two decades, international peacekeeping, counterinsurgency, and other military forces have been neither properly trained nor eager to become involved in dealing with illicit economies and organized crime actors, but have nonetheless become increasingly unable to escape these aspects of their missions. Indeed, some of the missions recently taken on by international military forces have been pure anti-crime missions, such as the anti-piracy operations off Somalia. After surveying the nexus of crime and war from Latin America through Africa and Asia, the article ends with a set of policy recommendations for how modern militaries should deal with the nexus of conflict and crime.

INTRODUCTION

Military conflicts around the world increasingly conjoin political violence, organized crime and illicit economies. In many regions, domestic law enforcement responses to organized crime resemble warfare. Government suppression of urban crime and rural instability in Latin America and South Asia, for example, progressively merges police and military operations. In Mexico, Brazil and Central America, clashes between criminals and the authorities often have the intensity of intra-state urban conflict.

Modern militaries were not designed or trained to deal with illicit economies and organized crime. Nonetheless, the frequency and intensity of international military action at the nexus of violent conflict and crime has increased since the 1990s. Training police forces and devising responses to rising crime have been a key feature, and deficiency, of the counterinsurgency effort in Afghanistan. NATO works alongside the Chinese and Saudi militaries in anti-piracy patrols off the coast of Somalia, in what would normally be regarded as law-enforcement operations.

Although criminals and militants often interact with illicit economies in the same way, it is rare for such groups to merge into a homogenous, monolithic entity. Rather, when a crime–terror or crime–insurgency nexus emerges, their interactions will be unstable. Accordingly, countering domestic crime that threatens national security, or resolving military conflicts that involve criminals and illicit economies, requires a complex, nuanced and carefully calibrated response.

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Vanda Felbab-Brown

Publication: Survival

Image Source: © STRINGER Mexico / Reuters

Maryland v. King: An Unfortunate Supreme Court Decision on the Collection of DNA Samples

Richard Lempert — Thu, 06 Jun 2013 11:38:00 -0400

Maryland v. King, the recently decided DNA identification case, has elicited both cheers and jeers. Cheerers see the case as an important weapon in the fight against crime, while jeerers see the case as a serious infringement on privacy and 4^th Amendment freedoms. In this dispute the cheerers probably have the better case, but this is because a debate based mainly on interpretations of the 4th amendment does not get at the core of the issue we should be confronting. Perhaps the most common concern of those appalled at the decision is that collecting DNA samples involves an infringement on privacy that is by orders of magnitude greater than that which accompanies other identification evidence, such as fingerprints and photographs. DNA, they point out, can reveal far more about a person than a photograph or a fingerprint, including perhaps violence proneness and the likelihood of contracting different diseases. This concern is, however, largely groundless. DNA collected to match criminals to crimes includes information about 13 gene segments (alleles) that are part of the non-coding portion of the genome. They reveal no intimate information about their sources, nor are they likely to, and the information stored in a data base describes only these 13 alleles. The concern is not entirely groundless, however, for the Maryland statute at issue in King seems to contemplate that whether or not a DNA sample relates to the crime for which a person was arrested, it will be retained if the person is convicted of that crime. It is hard to see a legitimate reason for this or why a criminal upon conviction should lose this aspect of personal privacy, but the question of whether DNA samples following conviction could be retained and further analyzed was not at issue in this case.

The second concern of those appalled is simply that a search of a still innocent person has occurred without probable cause. The concern is fed by Justice Kennedy’s majority opinion in King which is entirely unconvincing in its attempt to justify DNA collection as an ordinary part of the booking process, much like fingerprinting. The opinion suggests that the primary justification for taking an arrestee’s DNA is to allow the authorities to identify with certainty the person before them and to better assess the care with which he should be guarded or the danger that if released on bail he might flee or pose a threat to society. Justice Scalia in dissent demolishes this rationale, pointing out that fingerprints are a far faster means of identification and, he might have added, far cheaper. Moreover, in King the delay between the time King’s DNA was taken and when results were returned was about 4 months. Such delays are not unusual and mean that the DNA taken from arrestees cannot satisfy the concerns that for the King majority are the main rationales for allowing the search.

Yet it is hard for one who is not a 4^th Amendment purist to get upset about this search. DNA samples are taken by lightly brushing a swab on the inside of a person’s cheek. The time needed is negligible and intrusion could hardly be less. Compared to the disruption of the arrest and searches for weapons or contraband upon arrest, the “search” for DNA is nothing. Indeed it is nothing compared to the inconvenience and intrusion that is no doubt felt by the teenager who is stopped for “informal” questioning, not amounting to a search, on the streets of New York.

The cheerers, on the other hand, are right to see the DNA sampling of arrestees as a tool for crime control, although whether it will prove as valuable as its advocates claim remains to be seen. (Even if a cold case is solved the offender is already under arrest and most likely would have been convicted and sentenced for his most recent crime.) People are identified as criminals when their DNA is typed and matched to DNA taken at a crime scene or from a crime victim, as with semen found on a rape victim. The unsolved crimes in the DNA data base are serious ones and often, as with rape and burglary (where the UK has taken the lead) many offenders repeat their crimes if not caught. Moreover, the number of cold cases being resolved is not negligible. The Kansas Bureau of Investigation reports, for example, that it had 284 cold hits in 2011 using the national registry, including suspects in 13 homicides and 54 rapes, but a large proportion of these hits most likely would have come anyway from samples taken after arrestees were convicted. Still there are definitely crime control returns to taking DNA from arrestees, some future crimes are in all likelihood prevented and as knowledge of data base searches permeates society perhaps there will be deterrent effects as well.

But these virtues of DNA testing are beside the point, or at least they should be. The issue the Court barely touched on and never dealt with adequately is whether states are justified in singling out still innocent defendants for DNA testing and sparing the rest of us. If everyone’s DNA were tested, say at birth, and kept on file, even more DNA identifications would be made; more criminals would be locked away before they could offend again, and deterrence would be greater. Except by fiat it is hard even to argue for the generally accepted position that those convicted of crimes have forfeited their right to keep the information in their DNA to themselves. It is far harder to argue that those who have been selected by the police to be arrested have, before they are convicted, forfeited this right. Not only are arrestees presumed innocent, but many are in fact innocent of the offense that led to their arrest. In investigating a crime the police may arrest and release several suspects before they identify the true perpetrator, and many of those arrested are never tried or if tried are not convicted.

The difficulty of justifying King is still greater when one considers that the police do not arrest innocent people at random. Minorities appear particularly vulnerable. A just released study is instructive. It suggests that even though similar proportions of whites and blacks use marijuana, a black person is about 4 times as likely to be arrested for marijuana possession as a white person, and in some places the disparity is several times as great. This means that blacks who have not committed the crime leading to their arrest are at greater risk than similarly innocent whites of being linked to another crime through DNA profiling. It is, in addition, not just those arrested who are especially vulnerable. If an arrestee’s DNA is the same on most but not all alleles to the DNA in a data base, there is a good chance, amounting often to almost a certainty, that a relative of the arrestee left the crime scene DNA. Moreover, we are not just talking about brothers and sons; the net can be cast very wide. In one UK case, the police compiled a list of 700 people who might have been the source of crime scene DNA that almost but not quite matched the DNA of the initial suspect. Based on considerations like age, gender and residence, they winnowed the list of relatives down to develop a manageable group for further investigation, and they eventually identified the perpetrator. Thus people who have never done anything to justify having their DNA typed are effectively in the DNA data base, and racial disparities in the likelihood of arrest will be reflected in the degree to which never-arrested members of different ethnic groups are vulnerable to DNA identification. The Maryland law at issue in King recognizes these problems. It allows DNA to be collected only from those arrested for serious crimes, and it does not allow familial searching. Other states are not so restrictive, however, and many in the criminal justice system are pushing for more use of near match identifications. The Court’s decision in King can be expected to spur movement in this direction.

What , one might ask, is so bad about using DNA samples taken from arrestees to identify people guilty of unsolved crimes? If an arrestee is found guilty of the crime that led to his arrest, it matters little whether his DNA is typed and compared to unsolved crime DNA before or after conviction. If he is not charged with or convicted of the crime leading to arrest, then but for the DNA typing he would continue to thwart justice for a crime he did commit, surely not a desirable outcome. Even the relative who is discovered by a near match is hardly an object of sympathy. He too is most likely to have not only committed a serious crime but also to have evaded capture for it. From a just deserts perspective nothing seems wrong. Those who have escaped justice now find they must pay the price for their crimes. From a distributive justice perspective the situation is, to be sure, more troubling, for it exacerbates the degree to which some minorities are more likely than similarly criminal whites to be arrested for their crimes. Still the cure should be to arrest more white criminals and not to let other who have committed crimes go free. Moreover, since much crime is intraracial those saved from future rapes or killings will often have the same heritage as those captured.

If there is an argument against more widespread DNA typing, it relates to the surveillance society we are building and when the 4^th Amendment will protect against this. Do we want to allow DNA to be taken when no crime is suspected if by doing this we will catch more rapists and murderers? The answer is unclear. We are, after all, a society that tolerates thousands of preventable gun deaths, many of which are criminal, in the name of individual freedom. Some like Justice Scalia will argue that regardless of results, suspicionless searches, even ones as minimally intrusive as a DNA cheek swab, offend our human dignity and violate the Constitution. Others will feel that the infringement on privacy and autonomy is minimal and that catching more rapists and murderers and deterring others makes the trade-off between dignitary interests and crime control more than worth it. It is the dispute between these two positions that we should as a society be deciding.

The problem with the King case is that it distorts our judgment of the values at stake. Psychologically when we think about the issues King raises, we are deciding for “the other.” Alonzo King was, after, all arrested for and found guilty of a serious violent crime. He is not like us. Thinking of King, it is easy to strike the balance in favor of crime control over 4^th Amendment rights and human dignity, for he certainly does not exemplify the latter. Yet Alonzo King, at the time his DNA taken, was in all legally relevant respects like us in his innocence. We should judge the result in King not with Alonzo King in mind but with ourselves, our friends and neighbors standing in his place. Some through near match searching are, unknowingly, already there. Others could be, for King is precedent for establishing a national DNA database since it is hard to imagine any principled distinction between King while he stands unconvicted and ourselves. (The only salient difference, that an arrest requires probable cause, is too thin a reed for any but the most cynical to rest upon.) It is in the context of establishing a national data base, to include our own, that we should consider the desirability of King. Reasonable people can differ. Some would be willing if not eager to have their DNA in a data base if that would deter crime and mean that more who were not deterred were caught. Others would side with Justice Scalia who wrote, “Perhaps the construction of such a genetic panopticon is wise. But I doubt that the proud men who wrote the charter of our liberties would have been so eager to open their mouths for royal inspection.” What is most wrong with the Court’s decision in King is not that it reached a bad result, but that it forestalls the debate we should be having.

Authors

Richard Lempert

Image Source: © Bobby Yip / Reuters

What Is the Future of U.S.-Mexico Security Cooperation?

Andrés Rozental — Wed, 08 May 2013 00:00:00 -0400

The decision by the Peña Nieto administration to channel the U.S.-Mexico security agenda through the Interior Ministry is not designed to negatively affect the close ties established over the past years in intelligence sharing and cooperation. Rather, it is the result of the Mexican government's decision to bring all the official agencies involved with that agenda domestically under a single umbrella.

The previous Public Safety Ministry and Federal Police are now coordinated from the Interior Ministry, so it is logical to have counterpart U.S. agencies use that same channel. There is no reason to believe that this change will negatively affect the bilateral relationship on security or drug trafficking issues since President Obama clearly concurred with this new approach during his visit to Mexico and during conversations with Mexico's president and his cabinet.

Aside from the security agenda, which is still an important element in the relationship, the two presidents indicated that other priorities will characterize the agenda going forward, especially economic ties, business facilitation, border infrastructure and educational exchanges. This is a positive development in my view as it moves the U.S.-Mexico agenda back to the issues that have historically brought our two countries together and de-emphasizes the monothematic nature of the relationship over the past six years.

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Andrés Rozental

Publication: Inter-American Dialogue's Latin America Advisor

Image Source: © Kevin Lamarque / Reuters

President Obama's Trip to Mexico Emphasizes America's Future Economic Prosperity and Security

Diana Villiers Negroponte and Ted Piccone — Thu, 02 May 2013 00:00:00 -0400

Mexico and the U.S. are mutually dependent on one another for their collective and respective economic and national security interests. President Obama’s meetings with Mexico’s new president Enrique Pena Nieto will certainly cover border security issues, weapons, drug trafficking and immigration, but these two leaders will want to find ways to further cement the economic relationship between the two countries. Earlier this week, Senior Fellows Ted Piccone and Diana Negroponte sat down together to examine the importance of these talks.

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President Obama's Trip to Mexico Emphasizes America's Future Economic Prosperity and Security

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Obama’s Mexico Trip: Putting Trade and Investment at the Top of the Agenda

Diana Villiers Negroponte — Thu, 02 May 2013 09:00:00 -0400

President Obama recognizes that security is a pervasive problem in the bilateral relationship between the U.S. and Mexico. But in his April 30 press conference prior to setting out for Mexico, Obama highlighted the U.S.-Mexico trade relationship:

“A lot of the focus is going to be on economics. We’ve spent so much time on security issues between the United States and Mexico that sometimes I think we forget this is a massive trading partner responsible for huge amounts of commerce and huge numbers of jobs on both sides of the border. We want to see how we can deepen that, how we can improve that and maintain that economic dialogue over a long period of time.”

Beyond the statistics of expanding trade, what more should the presidents discuss?

Total two-way trade reached $494 billion in 2012, which according to Mexican Ambassador Medina-Mora means more than $1.3 billion per day; almost $1 million dollars per minute. In absolute terms, Mexico is America’s third largest trading partner, and in 2012 U.S. exports to Mexico were $216.3 billion. According to Medina-Mora this is more than the combination of U.S. exports to all the countries with which the United States has a trade agreement in place – except for Canada. Surprisingly, it is more than U.S. exports to Japan and China combined, that is $180.6 billion.

We agree that exports to Mexico both maintain and create jobs in the United States. The U.S. government estimates that each additional billion dollars in new exports supports more than 6,000 new jobs. According to the U.S. Chamber of Commerce, almost 6 million U.S. jobs rely on trade with Mexico, the consequence of which is the potential creation of 107,000 new U.S. jobs.

Furthermore, individual states benefit from exports to Mexico such as Arizona, California and Texas which hold Mexico as their main export destination. Mexico is also the second destination for exports from 20 other states and is ranked among the top five export destinations for 34 states.

Investment flows are also mutually beneficial. According to the U.S. Trade Representative’s office, sales of services in Mexico by majority U.S. owned affiliates were $34.4 billion in 2010. Sales of services in the United States by majority Mexico-owned firms were $4.8 billion. According to the U.S. Embassy in Mexico, the United States currently provides 41 percent of all foreign direct investment in Mexico, benefiting more than 21,139 companies.

Beyond the numbers, the reality of trade and investment is that the United States and Mexico compete together in the global economy. Production and supply chains in North America are deeply integrated with the U.S. content of Mexico exports to the United States estimated at 40 cents on the dollar. This compares to 25 cents for Canadian exports to the United States and 4 cents for China and 2 cents for the European Union, according to a Wilson Center report. In short, there exists a growing integrated manufacturing platform that takes advantage of geography, time zones and cultural affinity.

The challenge ahead is how to build on that integration for the forthcoming Trans Atlantic Trade and Investment talks with the European Union. The development of common standards and regulations will impact both Mexican and Canadian industry. Therefore, they need to be either at the table, or close to the negotiations. How close will the consultations with the Mexican trade delegation be? Ideally, the Mexicans would like to be at the negotiating table, but that is improbable. More likely is a commitment from President Obama to consult closely with the Mexican delegation. This could include both pre-talks and post-talk briefings, reinforcing Obama’s call “to maintain the economic dialogue over a long period of time.” On the European side, Turkey wishes to have a close consultative arrangement with the EU negotiators. This creates a balanced need for consultations with immediate trading partners.

Related to the growth in two-way trade is the need to facilitate movement of trucks across the U.S.-Mexico border. Despite an increased use of pre-clearance procedures, Mexican trucks must line up several kilometers from the border while they wait their turn to reach the fast lane that leads up to and through the U.S. border. Public-private partnerships are needed to construct the access roads some 10 kilometers from the border so that pre-cleared vehicles can move rapidly through the border zone. Currently, GPS vehicle trackers are used to link the sending and receiving manufacturers with U.S. Customs and Border Patrol (CBP). Before the truck even reaches the border post, CBP will know the content and value of the merchandise, as well as specifications on the cab and its driver. Only if tampering is detected will CBP stop the truck for secondary inspection, otherwise the truck sails through the border and onto its final destination. The Mexican private sector has demonstrated interest in constructing those access roads, but it needs presidential mandates from both governments to support the projects, as well as Mexican government purchase of necessary land.

Increasingly, the economies of both the U.S. and Mexico depend upon each other. There is much for the presidents to discuss and many challenges lie ahead, including productivity and education in both our countries. As President Obama begins his second term, it is constructive for him to put energy and political will into deepening that economic relationship.

Authors

Diana Villiers Negroponte

Image Source: © Kevin Lamarque / Reuters

A Conversation on President Obama’s Trip to Mexico and Costa Rica

Joshua Meltzer, Diana Villiers Negroponte, Ted Piccone and Neil Ruiz — Wed, 01 May 2013 17:59:00 -0400

In advance of President Obama’s trip to Mexico and Costa Rica later this week, Brookings scholars Ted Piccone, Joshua Meltzer, Neil Ruiz and Diana Negroponte discuss the main priorities on the agenda between the United States, Mexico and Costa Rica. Topics covered include: expanding trade and economic cooperation between the U.S., Mexico and Central America, U.S. immigration reform, border security, drugs, crime and violence in Mexico and Central America, energy cooperation, and local politics in Mexico.

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“I think there has a been a view around for awhile now that the bilateral relationship at least with Mexico has been dominated by drugs and violence. And I think there is going to be a concerted effort here to refocus attention on to the depth and size of the economic relationship.” — Joshua Meltzer

“It’s a second term trip for the president, but its early in his second term and I think he’s got a lot of heavy lifting still to do on issues that are particularly important to Latin America and especially important to Mexico and Central America. These issues [jobs and the economy, immigration, security] are not the typical ones on the foreign policy agenda. These are issues that are bread and butter, hot-button domestic political issues but they are very important to the Latins, particularly in Mexico and Central America.” — Ted Piccone

“Immigration is a hot button issue of course. It’s something that is still alive here in the U.S. There’s no reform yet to report back to Mexican and Central American leaders. But these meetings actually set the stage for building the relationship for working together once immigration reform is implemented into law.” —Neil Ruiz

“This is a time when Enrique Pena Nieto, the newly elected Mexican president, has got a chance to really celebrate the strength of the Mexican economy: 3.5 percent GDP growth this year, 3.9 percent GDP growth last year… [and] a growing middle class, which means more people with a car and an ability to take a vacation, with iPods, with cellular telephones, and more mobile.” —Diana Negroponte

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A Conversation on President Obama’s Trip to Mexico and Costa Rica

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President Obama’s Visit to Mexico: Key Anti-Crime Issues

Vanda Felbab-Brown — Fri, 26 Apr 2013 11:57:00 -0400

Up to two weeks ago it looked like President Barack Obama would be going to Mexico with a very strong hand. Had the gun control measures, which the Obama administration pushed as one of its key domestic issues in the second term, passed in the U.S. Congress, the U.S. President could have arrived in Mexico next week having delivered on a sticky bilateral issue: For more than a decade, successive Mexican presidents have been demanding greater weapons checks and tighter gun control from the United States, with the hope that such measures would reduce the excruciatingly high criminal violence in Mexico.

Mexico’s other long-term demand has been immigration reform: increasing legal job opportunities for Mexican workers, reducing deportations, and allowing Mexican families to travel and connect without great personal security and legal risks. President Obama might yet be in a position to remove the immigration thorn from the U.S.-Mexico bilateral relationship. Clearly, any immigration reform will not pass before he goes to Mexico next week. But he can credibly indicate that his administration has made immigration reform a key domestic priority and that there is more congressional movement on immigration, including on offering a path to citizenship to the millions of undocumented migrants living in the United States, than there has been in years. And at least until the Boston terrorist attacks, it appeared that immigration reform would finally pass in the U.S. Congress. Those opposing immigration reform or demanding a tightening of borders and fail-proof screening that cannot realistically be achieved, are seizing on the Boston attacks as an excuse for derailing the immigration reform legislation. But the prospect of reform is still very much alive.

In addition to gun control and immigration, Mexican President Enrique Peña Nieto will want to talk economics. Upon assuming office last year, he announced that he would like to break out of the Mexico-U.S. relationship being captured in the prism of the drug trade violence and collapsed into anti-crime cooperation, and to have the relationship refocus on global and bilateral trade and energy issues.

But security issues will inevitably be on the agenda, and the discussions may not be easy. For a long time, Washington was suspicious that if the Institutional Revolutionary Party (PRI) which President Peña Nieto leads returned to power, it might be tempted by its old ways —again lessening Mexico’s determination to tackle organized crime and its penetration into Mexico’s law enforcement and administrative institutions and its grip on large segments of Mexico’s society. Since being elected, President Peña Nieto has repeatedly disavowed any negotiations with criminal groups, but he has also maintained that the priority for his government will be not to disrupt drug flows to the United States (as his predecessor President Felipe Calderón sought to do), but to minimize the terrible drug violence in Mexico. Both the reduced focus on disrupting drug flows and the new emphasis on reducing violence, especially should it lead to changed interdiction and targeting patterns in Mexico, might be difficult to sell to Washington and would require the United States to abandon some of its established, albeit often ineffective and counterproductive, international anti-crime and anti-drug policies.

For its part, the new Mexican government has been surprised and made uncomfortable by the extent and tightness of U.S.-Mexico anti-crime cooperation that was established during the Calderón years. Not only has much of the strategic and tactical intelligence for interdiction and other anti-cartel operations come from the United States, but also, and in an unprecedented way, U.S. advisors have become intimately involved in helping to design and shape tactical interdiction operations of several Mexican entities used for anti-cartel law enforcement as well as in reforming law enforcement institutions in Mexico. Conscious of sovereignty, eager to establish tight control of these security institutions, and seeking to redirect Mexico’s security policy to reducing violence, the Peña Nieto administration has been mulling over whether or not and how to shape U.S.-Mexico security cooperation. It needs to take care not to throw the baby out with the bath water. U.S. cooperation, including intelligence provision and law enforcement reform assistance, continue to be greatly valuable for Mexico, and Mexico is hardly in the position to do without them.

For its part, Washington needs to recognize that seeking to reduce criminal violence, including killings, kidnappings, and extortion, is the right priority for Mexico, and indeed, should be a key goal for law enforcement in any country. The United States should wholeheartedly support that objective in Mexico. But achieving violence reduction in Mexico will not be easy, as President Peña Nieto and his security team have already learned in their first six months. Major questions remain about the details, operationalization, and actual implementation of the security strategy Peña Nieto has outlined. As I detail in my report Peña Nieto’s Piñata: The Promise and Pitfalls of Mexico’s New Security Policy against Organized Crime, many components of the new strategy, such as the organizational reshuffle of Mexico’s security institutions, the establishment of a new gendarmerie, or even the youth-crime prevention focus (important as the last element is for any sustainable long-term strategy to reduce criminality) do not easily, quickly, and directly translate into violence reduction in Mexico.

Paradoxically, the policy that is most directly available to Mexico to reduce criminal violence is the one for which it needs the most cooperation from the United States: changing targeting patterns. Instead of deploying the Mexican military or federal police or the gendarmerie (whenever it will actually become available) merely in response to wherever violence intensely breaks out and making cartel capo decapitation the core of its strategy, Mexico needs to prioritize targeting in a way that will reduce violence. That means abandoning both top-level decapitation and reactive deployment of forces. Instead, a wiser interdiction pattern would be more selective and based on an analysis of which law enforcement actions will stimulate what responses and actions from and among the criminal groups. The changed interdiction pattern can include focusing on the most violent group in a particular area and focusing on the middle layer, as opposed to the top capos, of a cartel. As I also explain in another report, Focused Deterrence, Selective Targeting, Drug Trafficking and Organized Crime: Concepts and Practicalities, strategically choosing the basis of prioritized targeting and moving away from interdiction based only ad hoc on how intelligence becomes available requires careful calibration and an uneasy balancing of the pros and cons of each possible option for prioritized interdiction. It often entails uneasy tradeoffs.

Nonetheless, Washington should not define the prioritized interdiction approach (which can mean not vigorously going after some groups for a while) as yet another manifestation of the corruption of Mexican law enforcement institutions by organized crime groups. In turn, explaining to the United States that prioritizing law enforcement actions is smart policy, not weakness and corruption, requires that Mexico maintains extensive discussions with Washington.

What in the long term will increase the rule of law in Mexico is ensuring that communities obey laws, by increasing the likelihood that illegal behavior and corruption will be punished via effective law enforcement, but also by creating a social, economic, and political environment in which the laws are consistent with the needs of the people and allow citizens to embrace their police forces and state presence. Reducing criminal violence is a key element. Adopting a smarter interdiction pattern is an important first step.

Authors

Vanda Felbab-Brown

Image Source: © Kevin Lamarque / Reuters

Could al-Qaeda Direct a Canadian Plot From Iran?

Bruce Riedel — Wed, 24 Apr 2013 15:30:00 -0400

The revelation of an alleged plot to attack the Canada-U.S. train system by a small cell somehow connected to al-Qaeda’s presence in Iran has sparked interest in the relationship between the Sunni Muslim terror group and the Shia Muslim Iranian government. There is no doubt that al-Qaeda has a presence in Iran – but how it relates to the Tehran regime has been murky for years.

The relationship between al-Qaeda and the Islamic Republic of Iran has been shrouded in mystery and secrecy for years. Al-Qaeda operatives have transited through Iran regularly before and after Sept. 11, 2001, and some found sanctuary in Iran after fleeing Afghanistan in late 2001, although the circumstances of their status in Iran was always unclear. But the hints of occasional operational co-operation between al-Qaeda and Tehran are mostly outweighed by the very considerable and public evidence of the deep animosity between Sunni-extremist al-Qaeda and Shia-extremist Iran.

Antipathy for each other is at the root of their ideologies and narratives. It has been most visible in their competition for influence in Iraq, and now also in Syria.

The Sept. 11 plot is a good place to start if we wish to understand the mystery. The 9/11 Commission report concluded that there was evidence of contacts between Osama bin Laden and Iran (through its Lebanese Hezbollah ally) dating back to his years in Khartoum in the mid 1990s.

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Authors

Bruce Riedel

Publication: The Globe and Mail

Job Sprawl Stalls: The Great Recession and Metropolitan Employment Location

Elizabeth Kneebone — Thu, 18 Apr 2013 00:00:00 -0400

As policymakers and regional leaders work to grow jobs and connect residents to economic opportunity following the Great Recession, where jobs locate matters. The location of employment within a metro area intersects with a range of policy issues—from transportation to workforce development to regional innovation—that affect a region’s long-term health, prosperity, and social inclusion.

Job Sprawl in 100 Largest Metropolitan Areas, 2010
Share of jobs 10-35 miles from a central business district
Click a metro area to view its detailed profile (PDF)

An analysis of the location of private-sector employment within 35 miles of a downtown in the nation’s 100 largest metropolitan areas from 2007 to 2010, and across the 2000s, finds:

Steep employment losses following the Great Recession stalled the steady decentralization of jobs that characterized the early to mid-2000s. After dropping 2 percentage points from 2000 to 2007, the share of metropolitan jobs within 3 miles of downtown stabilized from 2007 to 2010. However, by 2010 nearly twice the share of jobs was located at least 10 miles away from downtown (43 percent) as within 3 miles of downtown (23 percent).

Job losses in industries hit hardest by the downturn, including construction and manufacturing, helped check employment decentralization in the late 2000s. Together, construction, manufacturing, and retail—each among the most decentralized of major industries—accounted for almost 60 percent of all job losses between 2007 and 2010, with half of those losses occurring at least 10 miles from downtown.

In all but nine of the 100 largest metro areas, the share of jobs located within three miles of downtown declined during the 2000s. Only Washington, D.C. experienced an increase in both the number and share of jobs located in the urban core during the 2000s. At the same time, the share of jobs at least 10 miles from downtown rose in 85 regions between 2000 and 2010.

A metro area’s total employment, and policy and planning decisions around land use, economic development, and zoning, help shape the location of its jobs. Employment is more decentralized in metro areas with at least 500,000 jobs. But even large metro areas with high degrees of job decentralization like Chicago and Detroit concentrate many of their jobs in dense locations outside the urban core.

In the wake of the Great Recession, policymakers and regional leaders have the opportunity to make strategic decisions about how they will pursue metropolitan growth. If the next period of economic expansion reinforces low-density, diffuse growth in metropolitan America, it will be that much harder for metro areas to achieve sustainable and inclusive growth over the long term.

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Authors

Elizabeth Kneebone

Energy, Indigenous Communities and the Arctic Council

Wed, 17 Apr 2013 08:30:00 -0400

Event Information

April 17, 2013
8:30 AM - 2:00 PM EDT

Falk Auditorium
Brookings Institution
1775 Massachusetts Avenue NW
Washington, DC 20036

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Owing to the vast economic opportunities and environmental, social, and geopolitical challenges it presents, the Arctic is emerging as an important topic of debate. With an estimated 25 percent of the world’s undiscovered oil and gas reserves, and with climate change making shorter maritime routes through Arctic waters possible, the rewards of successful economic development are plentiful. However, the remote, pristine frontier is home to some of the world’s harshest conditions making energy development, maritime trade and tourism increasingly difficult and dangerous. The Arctic is also home to indigenous communities whose livelihoods are likely to be challenged by both the effects of climate change and increasing external human activity in the region.

On April 17, the Energy Security Initiative at Brookings hosted a forum to discuss the implications of greater Arctic energy and natural resource development and assessed how the international community can best cooperate to ensure that such developments are done in an environmentally and socially sustainable manner. The forum begins with keynote remarks from Ólafur Ragnar Grímsson, president of Iceland, and Kuupik Kleist, a member of Parliament of Greenland and former Greenland prime minister. Other speakers included the incoming Chair of the Senior Arctic Officials of the Arctic Council, Patrick Borbey; David Hayes, deputy secretary of the U.S. Department of Interior; and Mead Treadwell, lieutenant governor of the State of Alaska.

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20130417_arctic_energy_transcript

State and Local Leaders Double Down on Infrastructure

Robert Puentes — Tue, 16 Apr 2013 10:35:00 -0400

Cautious optimism followed President Obama's FY2014 budget request to rebuild and reinvest in America's infrastructure.

The proposal highlighted infrastructure as a fundamental driver of the nation's economy and critical asset for its long-term recovery. Specifically, the request reiterates the determined proposals to create a national infrastructure bank, build-out an American high-speed rail system, invest in clean energy, modernize the air traffic control network and the electrical grid, and reinvest in state-of-good repair projects, among other things.

The president's infrastructure package has a lot of good ideas. What it does not have is a lot of money.

Undaunted, state and metropolitan leaders are coming to Washington this week with their own ambitious and creative strategies to make their infrastructure goals a reality and looking to the federal government to engage in new partnerships with government, labor, and institutional investors to accelerate the construction and deployment of new infrastructure.

In many ways, Washington is acknowledging this renaissance and moving to embrace it. Also included in the president's request are plans to cut regulatory red tape in order to prioritize projects and enable better use of public/private partnerships. These are welcome acknowledgments of the principal role state and local leaders play in selecting, financing, and building infrastructure and, given their miniscule price tag, ought to be legislative slam dunks.

Without a doubt, unfunded pension obligations and other debt burdens facing state and municipal governments limit the availability of public funds to pay for necessary infrastructure. And though interest rates remain at historically low levels, the ability of many governments to borrow from the capital markets is limited by debt caps and weak credit ratings.

So states and metros are looking beyond traditional municipal debt markets to find new lower cost, lower risk, and higher impact ways to pay for essential infrastructure projects:

Increasingly, public infrastructure investment occurs through state revolving loan funds and so-called "infrastructure banks." These institutions fund and finance a broad array of projects, ranging from local road maintenance and highway construction (e.g., Florida’s State Infrastructure Bank) to essential water infrastructure (e.g., New York’s state revolving funds) to energy efficiency (e.g., Connecticut's green bank.) While they are not for-profit institutions in the traditional banking context, they rely on principal repayments, bonds, interest and fees to, ideally, re-capitalize and replenish the fund as a perpetual source of debt financing. The model has also gained traction at the sub-state level in Chicago and in the District of Columbia.

At the same time, state officials are also working to design innovative governance and institutional tools capable of overcoming the bureaucratic and technical barriers that can slow or even derail projects. These efforts are clearing the way for new infusions of private capital and streamlined project delivery. States like Virginia, Michigan, Colorado, and Georgia have new offices designed to tackle bottlenecks in public/private partnerships, develop innovative project ideas, and protect the public interest.

To develop consistent and predictable deal flow and ensure private investors’ continued engagement with U.S. infrastructure markets, stakeholders from California, Oregon, Washington State, and British Columbia created the West Coast Infrastructure Exchange (WCX.) The WCX seeks to establish a common market for infrastructure projects on the West Coast by coordinating cross-border infrastructure investments, facilitating procurements, and creating a project clearinghouse for regional infrastructure investments. WCX aims to create a robust market for the nearly $1 trillion in infrastructure projects that the region needs to develop.

Such efforts can be replicated elsewhere around the country. One common thread to the flurry of activity is the idea that stakeholders from all levels of government and the private sector (plus bi-partisan campaigns like Building America's Future and innovative collaboratives like Living Cities) can catalyze a new field of practice, get states ready for new kinds of investment, and explicitly connect long-term economic strategies with infrastructure planning and prioritization.

Our competitors, in mature and emerging economies alike, are in the process of making these kinds of investments and, by so doing, catalyzing productive and sustainable growth. In the United States, it looks like we are finally ready to start moving.

Authors

Robert Puentes

The Obama-Peña Nieto Meeting: Critical Issues in the Upcoming U.S.-Mexico Talks

Thu, 11 Apr 2013 16:00:00 -0400

Event Information

April 11, 2013
4:00 PM - 5:30 PM EDT

Falk Auditorium
Brookings Institution
1775 Massachusetts Avenue NW
Washington, DC 20036

Next month, President Barack Obama will meet with Mexico’s newly elected President Enrique Peña Nieto. While the two leaders met briefly last November, this meeting—Obama’s first in Latin America since his own re-election—will address major issues of concern to both nations including trade and investment, energy, border security and infrastructure, illicit drug trafficking and public safety. With significant political and economic consequences at stake, the Obama-Peña Nieto meeting will take place as both leaders face complex and contentious domestic challenges that have a direct impact on the bilateral relationship.

On April 11, the Latin America Initiative at Brookings hosted a discussion on the critical issues that will dominate the Obama- Peña Nieto meeting. Arturo Sarukhan, Brookings distinguished affiliate and former ambassador of Mexico to the United States, provided opening remarks on the larger political context for the bilateral meeting. A panel discussion followed featuring contributors to the forthcoming book, The End of Nostalgia: Mexico Confronts the Challenges of Global Competition (Brookings, May 2013). Brookings Nonresident Senior Fellow Diana Villiers Negroponte moderated the discussion.