On Saturday, Mexico will inaugurate a new president, Enrique Peña Nieto, just as President Obama is setting course for his second term. Obama’s administration is focused on more distant lands — rebalancing toward Asia and struggling with turmoil in the Middle East. Yet this week’s meeting of the two men highlights an opportunity for the United States to strengthen its continental base and leverage the dynamism of the Western Hemisphere as part of a global strategy.
The North American Free Trade Agreement of 1994 was the United States’ first international innovation outside the traditional Cold War security system. Over the past 20 years, U.S. attention to North America has been frequently diverted — but NAFTA and the partnership among Mexico, Canada and the United States are now starting to reach their potential.
This is an excellent time to deepen ties. The NAFTA countries should invest in a North American community that would make each stronger at home and around the world. For the United States, a more prosperous, growing, populous, integrated, energy-secure and democratic continental base would enhance private-sector possibilities and national power.
The United States and Canada are already demonstrating the ability to lower energy costs, strengthen energy security and cut the U.S. trade deficit while stimulating other industries. President-elect Peña Nieto has hinted that it is time for Mexico to draw investment and innovation to its energy sector. Mexican sensitivities about energy require respectful handling, but the possible gains for Mexico and its North American partners are striking.
As wages rise in East Asia, improved productivity in Mexico and quicker transport at lower cost are strengthening manufacturing on both sides of the U.S.-Mexican border. Throughout the financial crisis, Canadian and Mexican fiscal, monetary and banking policies earned global praise, laying a foundation for a continental revival. Mexican and Canadian growth means those countries purchase more here.
With fewer illegal immigrants to the United States and better border security, Mexico and the United States may be able to achieve a politically acceptable and economically sensible immigration policy. While other advanced economies — and many developing ones — will struggle with aging and decreasing populations, North America could become a new type of rising power.
North Americans still face frustrating issues, notably drug trafficking and criminal networks. The new Mexican government needs to strengthen its judiciary and law enforcement, education and infrastructure. The United States and Canada have a strong interest in assisting it.
Canada and Mexico have become the United States’ democratic, economic and environmental partners at global meetings. This is a huge and underappreciated change from 20 years ago. This groundbreaking partnership of developed and developing countries could be the cornerstone of future coalitions the United States will need to build.
One common interest concerns Central America and the Caribbean, which face economic and criminal threats that, in turn, trigger immigration risks. In decades past, the United States has burnt its fingers in Central America, only to look away when the flames subsided. In fostering the Central America Free Trade Agreement of 2004, the United States hoped to provide a better foundation for growth, stable public institutions, security and democracy. Yet drug traffickers pushed out of Colombia and Mexico have targeted Central America, where civic institutions are still weak and vulnerable. Mexico, Colombia and Panama are now willing to work with the United States to foster growing and secure democracies. The shift is a major change in the Latin American mind-set of even 20 years ago, which put the highest priority on restraining U.S. intervention.
The United States could employ economic ties to grow these seeds of hemispheric cooperation. U.S. free trade agreements (FTAs) in the Western Hemisphere now account for about 55 percent of the hemisphere’s gross domestic product, not counting that of the United States. These could be built into economic partnerships, fostering cooperation analogous to the security alliances of the 20th century.
North America should work to better connect the trade, sourcing and supply chains in the Americas — and act with hemispheric partners on the next generation of development issues: investment, infrastructure, education, energy, the environment, service sectors, business facilitation, or even democracy and security. These Latin American partners can also help shape ideas around the world during a time of great fluidity. Chile, Peru, Colombia and Mexico — all U.S. FTA partners—have created a new Pacific group that is advancing policies for open economies. They can be U.S. friends in a changing Asia-Pacific system, too.
U.S. ties with Brazil are not part of this FTA framework. Yet the current governors of Brazil’s states seem inclined to pursue more interests with the United States, including on energy, inclusive development and democracy. By combining activities with Brazil and partnerships across the hemisphere, the United States could set the stage for economic and security ties among all American democracies.
As the president looks west across the Pacific and is pulled to the Mideast, he also needs a fresh north-south vision. North America can become a new rising power. And the foundation of the future global system can be “Made in the Americas.”
Robert Zoellick is a fellow at Harvard University’s Belfer Center and the Peterson Institute for International Economics.