Obama’s Mexico Trip Ties Immigration Debate to Economy

Photographer: Ron Sachs/Pool via Bloomberg

U.S. President Barack Obama, right, meets with Enrique Pena Nieto, president-elect of Mexico, in the Oval Office of the White House in Washington on Nov. 27, 2012. Close

U.S. President Barack Obama, right, meets with Enrique Pena Nieto, president-elect of... Read More

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Photographer: Ron Sachs/Pool via Bloomberg

U.S. President Barack Obama, right, meets with Enrique Pena Nieto, president-elect of Mexico, in the Oval Office of the White House in Washington on Nov. 27, 2012.

President Barack Obama arrived in Mexico today with a message that ties the immigration debate in the U.S. to economic growth on both sides of the border.

In his discussions with Mexican President Enrique Pena Nieto, Obama also will be conscious of his audience back home, where Congress next week resumes negotiating possible changes to immigration law. That debate will affect U.S. and Mexican businesses as well as the millions of Mexicans living in the U.S. illegally.

Obama and Pena Nieto are scheduled to meet for about an hour before holding a joint news conference at 4:10 p.m. local time.

The domestic debate is intertwined with the thorniest issues in U.S. relations with Latin America, including border security, drug trafficking and free trade.

“The White House is hoping to highlight the economic opportunities that would emanate from a modernized immigration system,” said Ana Navarro, a Republican strategist who met with Obama and other White House officials about the trip this week. “He doesn’t want security and violence issues to dominate this trip.”

Mexico’s economic expansion has been changing the dynamics of the U.S. immigration debate and opening opportunities for Obama to meet his goal of doubling U.S. exports by the end of next year. The Mexican economy has grown at about twice the pace of the U.S. since the end of 2009, lessening the lure of the U.S. for Mexican workers. Net Mexican migration dropped to zero from 2005 to 2010, according to a Pew Research Center study released a year ago.

Bigger Market

A growing Mexican middle class has boosted the market for U.S. products. Mexico is the biggest buyer of U.S. goods sold abroad after Canada, with $216 billion in purchases last year, according to data compiled by the U.S. Department of Commerce. The U.S., in turn, bought about $278 billion, or 80 percent, of Mexico’s exports, led by oil, cars, auto parts and flat-screen televisions.

Obama made reference to that economic relationship this morning in announcing he’ll nominate Chicago businesswoman and political backer Penny Pritzker as commerce secretary and Michael Froman, currently the deputy national security adviser for international economics, as U.S. trade representative.

The trip is designed to promote “growth here at home and offer our businesses growing markets where they can sell more American-made goods and services abroad,” he said at the White House before departing.

Security Concerns

The economic aspect of the immigration debate has been overshadowed by security issues. Amid a violent drug war in Mexico that has claimed more than 60,000 lives in the past six years, many U.S. Republican lawmakers have made hardening the U.S.-Mexico border a condition for agreeing to measures to give undocumented immigrants a path to citizenship and creating a guest worker program.

Mexican officials have ended the broad access the country has long given to U.S. security agencies to help combat drug trafficking. Instead, programs to fight drug cartels and organized crime will be run through Mexico’s Interior Ministry.

“What this new coordination seeks is to have more impact in less time and to emphasize an area that hadn’t been emphasized in the fight against organized crime over the past months and years, which is the area of prevention,” Sergio Alcocer, Mexico’s deputy foreign minister for North American affairs, said in a telephone interview.

U.S. Reaction

Asked about the security changes during an April 30 news conference in Washington, Obama said he wasn’t “going to yet judge how this will alter the relationship between the United States and Mexico until I’ve heard directly from them.”

Even with continuing security concerns, officials from both countries are casting the trip as an opportunity to link the debate over immigration to a more positive economic story.

“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,” Obama said.

The Mexican government is equally eager to downplay the security issue. Since taking office in December, Pena Nieto has been working to change the country’s image from the home of a violent drug war to a center of growing industry.

Greater Cooperation

White House officials say they support efforts by the Mexican government to revise their security process. Still, Obama’s trip, which includes meetings with Central American leaders in Costa Rica later this week, is focused on enhancing economic cooperation.

“We believe there’s significant potential to increase and deepen our economic ties,” Ben Rhodes, Obama’s deputy national security adviser, said at a briefing yesterday. “The two leaders will really be lifting up the economic portion of the relationship in their discussions.”

Mexico is part of talks with the U.S. and nine other nations on creating a Trans-Pacific Partnership trade accord and is seeking to join the U.S. in talks on a free trade agreement with the European Union.

Along with trade, energy will be on the agenda for the two leaders. Pena Nieto’s government is preparing a bill to boost private investment in the state-owned oil sector, and the U.S. Congress is still debating an agreement to develop cross-border oil reservoirs signed by both nations in February 2012.

Mexico’s Impact

Immigration law in the U.S. will remain a subtext in much of Obama’s discussions on economic matters.

Almost two-thirds of Hispanics in the U.S. are of Mexican descent, including 11.4 million who were born in Mexico, according to an analysis of Census Bureau data by the Pew Research Center. Of Mexican immigrants in the U.S., about 51 percent are there illegally, Pew said.

Mexico is the fourth-largest recipient worldwide of remittance payments, with citizens collecting $23 billion from residents overseas in 2011, according to an April 19 report by the World Bank. In Central America, those payments play a large role in the economies of developing nations, equivalent to 17 percent of the gross domestic product of Honduras and 16 percent of El Salvador’s GDP in 2011

“Immigrants are basically economic ambassadors that tie the U.S. with its southern borders.” said Neil Ruiz, senior policy analyst at the Brookings Institution, a policy group in Washington. “They contribute to two economies simultaneously.”

To contact the reporters on this story: Lisa Lerer in Washington at llerer@bloomberg.net; Nacha Cattan in Mexico City at ncattan@bloomberg.net

To contact the editor responsible for this story: Steven Komarow at skomarow1@bloomberg.net

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