Online Extra: Q&A with Mexico's Jorge Castañeda

The Foreign Minister expects the U.S. and Mexico to reach a landmark agreement on easing immigration restrictions by early 2002

Mexican Foreign Minister Jorge Castañeda, 48, a widely published political scientist who has taught at leading U.S. universities, is the architect of Mexican President Vicente Fox's foreign policy. A member of the Communist Party in his youth, Castañeda later migrated to the political center and last year helped Fox win the presidency, ending 71 years of rule by the Institutional Revolutionary Party. He is trying to win a higher profile for Mexico on the world stage by competing for a seat on the U.N. Security Council.

He sat down to talk with BusinessWeek Mexico Bureau Chief Geri Smith on Aug. 27, a week before Fox's state visit to Washington. Excerpts from their conversation follow:

Q: After more than a century of mutual distrust, Mexico and the U.S. have an improved relationship these days. Why is that?

A: First, there were the [Mexican presidential] elections and the transition from authoritarian rule to democratic rule...and a more reliable, accountable, [and] transparent government as a result. Then, the degree of trust that could not exist before: The Americans trust us because of the personality of Vicente Fox. And Fox can run the risk of trusting the Americans because he has the standing, the legitimacy [in the eyes of] Mexican society because he really does come from a democratic election. You do have a new era in U.S.-Mexico relations.

Q: How has cooperation improved?

A: On drugs, intelligence-sharing, extraditions, talking about the tough issues such as the status of Drug Enforcement Agency [DEA] agents in Mexico. Trust becomes very important when you're beginning to negotiate real agreements on regularization [of illegal immigrants], on guest workers, on the border, on permanent visas, on funds for immigration-generating communities.

Q: Public opinion in the U.S. seems to be more favorable toward easing restrictions on Mexican immigration than in the past. Why is that?

A: There are a number of factors. One clearly has to do with the boom in the U.S. economy over the past 10 years, regardless of the current slowdown. That led to a very significant demand for the type of labor that Mexico provides. This is undoubtedly what led both the Federal Reserve and the AFL-CIO to modify their stances on immigration.

Then, you have the politicians who look at the numbers, and they are pretty clear: The Latino vote in the U.S., of which roughly half is Mexican, is significant. So, issues related to Latinos are important and must be addressed.

And the third factor is that there is a Republican Texan President of the U.S., which means a great deal -- [as a] Texan, he understands these issues. sensitive to Mexican issues, politics, idiosyncrasies. And he's a Republican, so he can deliver on things that perhaps a more liberal, Democratic President would not be able to. We don't underestimate the enormous importance of President Bush's contribution to the improvement of relations with Mexico.

Q: How much does NAFTA's success have to do with greater acceptance in the business community of the idea of easing immigration restrictions on Mexico?

A: We think there are conservative but business-oriented sectors in the U.S. that are very favorable to an agreement. We think the AFL-CIO is favorable. We think the Latino community is.

So we think there is a broad agreement: I wouldn't say consensus, but a broad-based center in the U.S. reaching out to the right-of-center and the left-of-center that is favorable to an agreement, and we hope that's enough to put it through.

Q: Expectations, especially in Mexico, have been raised quite high that some sort of dramatic immigration breakthrough will be unveiled at the Washington summit.

A: This is an issue which is at least as complex as NAFTA, and at least as important as NAFTA. And...this is a much more delicate issue than free trade. To think that we could put together an agreement on something like this in six months was always illusory. We were always clear that the summit itself was not a deadline for agreement.

We do think...from the summit we can unleash new momentum to reach an agreement sometime in the first part of next year, so that we can send it to both Congresses before the U.S. and Mexican midterm elections.

Q: On a visit to the U.S. to get the immigration talks moving, you were quoted as saying Mexico wanted "the whole enchilada, or nothing." What did you mean by that?

A: When [Secretary Of State Colin] Powell, [Attorney General John] Ashcroft, [Mexican Government Secretary Santiago] Creel, and I met in early April in Washington, we agreed upon the principle of a "single undertaking," which is a notion borrowed from trade talks. What it means is that, until everything is agreed upon, nothing is agreed upon.

We agreed that there would be a comprehensive package on migration that would address all the issues on the agenda. This was not clearly understood in the U.S. -- "single undertaking" and "comprehensive package" are not notions that work well in public opinion. So I decided to find a way to express it in a more colloquial fashion: "the whole enchilada," meaning that there had to be a comprehensive package that involves all of the issues we're talking about, or there would be no deal.

And that's where we stand today: We believe it would be excellent for both countries for there to be an agreement on temporary workers, on the condition that there is an agreement on the other issues at the same time -- on regularization [of the visa status of illegal workers], on the border, on permanent visas, and on resources for the [immigrant]-generating communities [in Mexico].

Q: You have said this immigration agreement could serve as a model for other parts of world. What parts?

A: First, the countries that are more directly linked to us, which are in Central America and the Caribbean. [But] this is something that every rich country in the world is negotiating in one way or another with some poor country. If you look at the Spanish press, this is all they talk about -- the issue of migration between Spain and Morocco, Spain and Ecuador, or Spain and Mali.

Q: When Fox visited the U.S. last year as President-elect, he proposed forming a North American Common Market 15 to 25 years down the road, with free movement of labor. Don't you think that's far bolder than anything the U.S. is willing to consider?

A: President Fox is someone who likes to...lead public opinion rather than follow it. In that sense, he's a very bold and visionary leader. When he...made all these statements, there were many who thought that was premature. Today, these issues are on the agenda.

Q: Fox also mentioned the generous European Union subsidies for Ireland, Spain, and Portugal as an example of what the U.S. could do for Mexico. But the U.S. is unlikely to give Mexico billions of dollars in development aid.

A: These are specific cases where the gap between a rich and poor country was very wide, and through proactive policies that gap was reduced in a relatively brief period of time. That's what we're interested in: how the Europeans did it with the Irish in the 1970s and '80s, how they did it with the Spanish and the Portuguese in the '80s and '90s, how they intend to do it with the Poles in the first decade of the 2000s.

We think that all of Europe benefited from the dramatic increase in Irish income, technology, productivity, and competitiveness, and obviously that the Irish did too. Do we think we have to do exactly the same thing? No. [But] you have to narrow the gap, and you need proactive policies in order to narrow it.

Q: Do you believe that increasing investment in the North American Development Bank and somehow getting the U.S. government and private sector to invest in immigrant-expelling Mexican regions will suffice?

A: No, I don't think that will be enough, but I think they're both excellent starting points. The broader question of Mexican infrastructure -- highways, ports, airports, telecoms, refineries, power plants, the works -- with the U.S. private or public [sector] investment, is in the U.S.'s best interest, and it's obviously in Mexico's best interest. How we do that? That's what we're looking at.

Take the border: We all agree the border is congested. Too many maquiladoras, too many trucks, too many people, not enough infrastructure. We've got to move the maquiladoras off the border. That means highways, telecoms, airports, housing for people [in other regions of Mexico]. Is that in the U.S. interest or not? The border is common -- it's not just our border. So yes, we think that the U.S. can understand these things.

Q: This year Mexico has agreed to extradite a number of captured drug traffickers and other criminals to the U.S. for trial. It has given the impression of a sort of quid pro quo: Mexico cooperating on drugs in order to win concessions on immigration.

A: The main reason we have been relatively more forthcoming on extradition...was the [Mexican] Supreme Court's decision in January declaring the constitutionality of extraditing Mexican citizens. [Now] I can judge each case on its merits. Second, the President thinks it's important for Mexico to be cooperative with the U.S. on this issue.

We're trying to be forthcoming, but there is no quid pro quo. We think the immigration agreements stand on their own [and] are in the best interest of the U.S. and of Mexico, which is why we're so optimistic we can reach a good agreement soon.

Q: During the NAFTA negotiations, the issues of immigration and opening up of Mexico's state-run oil sector were off-limits to negotiators. Now that immigration is under discussion, does that mean Mexico is ready to talk about possibly allowing foreign investment in the oil sector?

A: I think that the energy issue has been clearly placed on the table, on the trinational level -- by Canada, the U.S., and Mexico. We each have constitutional restrictions, [and] we have cultural, popular, historic doubts and constraints. But clearly...Mexico is willing to approach these issues with a more open mind than before.

In this case [of opening the oil sector], we have constitutional restraints. There are a lot of things we can't do without Congress' approval, period.

    Before it's here, it's on the Bloomberg Terminal.