Americas Program: What to Expect at the North American Summit

By  |  18 / February / 2014

globeI. The Toluca Summit

The North America Leaders’ Summit will convene this year on February 19 in Toluca, Mexico. The summits happen when the three heads of state decide to meet and began in  2005 with the formation of the Security and Prosperity Partnership, an outgrowth of the North American Free Trade Agreement (NAFTA). Since then, the summits have been mainly a PR effort to reframe or promote the trinational relationship, often marked by popular protests. There were no summits held in 2010, 2011 or 2013, while the 2012 Washington DC Summit declaration mentioned the predictable efforts at standardizing regulations and efficient borders, more exclusive intellectual property rules and energy integration, among other issues discussed.

The high-level meeting serves as a forum to further specific political and economic agendas. For example, then President Bush used the 2008 summit in New Orleans during the presidential campaigns to try to neutralize the democrats’ criticisms of NAFTA and press for what was then called Plan Mexico, now the Merida Initiative, for increased U.S. intervention in Mexican security.

This summit will be aimed at building support for Mexican President Peña Nieto’s neoliberal reforms, in particular the privatization of oil and gas exploration and development. It also forms a critical element of President Obama’s campaign to push through the unfinished Transpacific Partnership, of which all three nations are members. The TPP faces a tough vote in Congress for fast track authorization, with a rapidly growing citizen movement convincing many legislators that the agreement is to controversial and potentially damaging to consider without a full public debate.

II. On the agenda

1. Trade and Economic Integration

The Toluca summit will focus publicly on commerce. Since Obama’s visit to Mexico last May, the Mexican and U.S. presidents have sought to downplay their security relationship and the jointly fought drug war, in favor of a more positive image as economic partners. In fact, the drug war constitutes the vast majority of U.S. aid to and operations in Mexico but its utter failure in improving rule of law and public safety or weakening cartels has become a major political embarrassment. Following Obama’s visit, the two nations established the U.S.-Mexico High-Level Economic Dialogue on September, 2013 to refocus the relationship to economic matters.

Although this year marks the 20th anniversary of NAFTA, prompting evaluations, the cornerstone agreement that formalized the concept of North America as a single economic and security bloc will not likely have a high profile in public statements. The agreement is not popular with the citizenry of the three nations; in the United States  recent polls show that the majority favors modifying NAFTA. A study by the Center for Economic and Policy Research demonstrates an overall negative impact on the Mexican economy. Trade in goods and sevices between Mexico and the U.S. was over half a trillion dollars in 2012 and Mexico under NAFTA is a picture of trade dependency–some 78% of its exports are destined for the U.S. market alone

A January trinational meeting in Mexico decried the impact of NAFTA on jobs, environment, women’s and indigenous rights and well-being. Participants called for trade negotiations open to the public, and an end to the hated investor-state dispute settlement mechanisms of NAFTA that create parallel tribunals with strong corporate bias and have evn broader powers in the TPP.

They also called for renegotiation of NAFTA. John Kerry and Mexican Foreign Minister Juan Antonio Meade discarded the possibility at their Jan. 17 meeting. However, that doesn’t mean that deepening NAFTA is not in the offing–the NAFTA plus agenda has a new vehicle. Former US Trade Representative Carla Hills told a Congressional subcomittee, “We have a wonderful opportunity with the Transpacific Partnership. We don’t have to re-open NAFTA–our two neighbors are sitting at the table with us  and whatever we agree to in the TPP that changes, upgrades or adds to the NAFTA will be the governing document.”

The TPP will be prominent on the Summit agenda. A new study by Pubic Citizen marshals impressive evidence of how the TPP extends the policy errors of NAFTA and expands corporate privilege. Corporate interests have always been the driving force of NAFTA and of the TPP. Left out of this partnership are small and medium industries and small farmers, feminists, consumer and environmental groups and human rights organizations. These organizations in the United States are mounting an impressive awareness and advocacy campaign against the TPP. The Summit will seek to counteract that effort.

2. Mexico’s oil sector privatization

Mexico’s constitutional reform in oil and gas opens up the prospect of energy integration that has long been urged by corporations and proponents of a NAFTA-style integration. The reforms today happen in a new context of massive oil development in the region. The leaders of the three nations will celebrate North America’s oil abundance from fracking in the U.S. and Canada and Mexico’s privatization of its oil resources as though they had entirely forgotten about the pesky problem of global warming or the environmental costs. All the rhetoric about seeking sustainable energy has fallen by the wayside with the exciting news that we can mortgage our children’s and grandchildren’s future by using technology to extend our still inherently limited fossil-fuel future.

While public attention has focused on deep sea exploration–again, putting behind any lessons to be learned from the BP disaster–Mexico’s reforms also would convert the massive mining concessions into potential fracking concessions. U.S. interests are openly coveting a fracking revolution in Mexico with the reforms. As the expansion of mining generates lethal conflicts  between indigenous and campesino communities defending their resources (especially water) and environment and the mining companies, the expansion of shale oil exploration and development will intensify social and environmental damage.

Mexico could be poised on the brink of a major increase in violence and environmental destruction. Under the NAFTA-Narco model of resource exploitation, organized crime has become deeply involved in mining, as seen in northern Mexico and Michoacan, and in cross-border oil and gas sales, as evidenced in the lawsuits against major transnational oil companies in the U.S. for purchasing stolen gas from cartels. Privatization of oil and expansion of mining, a major concern of the Canadian government that will be on the private agenda, will consolidate this model.

What to Expect:

* High praise for Mexico’s neoliberal reforms. The U.S. government, transnational corporations and international finance institutions have pushed this agenda for the past two decades. The Peña Nieto administration is a dream come true for advocates of neoliberal structural reforms. Claims of low-cost energy (despite the fact that even the Peña government has cautioned that fuel prices will not diminish in the short-term) spurring economic growth, prosperity and North American energy independence will be the order of the day, with kudos to Peña just as he faces major opposition to the reforms within Mexico.

* The TPP will be highlighted while NAFTA will get short shrift. In spite of all the efforts to parade increased trade figures as signs of progress, it is just not possible to put a positive spin on the overall results of the agreement after twenty years. Instead, The Transpacific Partnership will take center stage as if it weren’t a NAFTA-plus and instead a major new growth initiative.

* Politically safe issues such as education and health cooperation will also be included.

* Security cooperation will be mentioned but not stressed. Mexico is facing another explosion of violence in Michoacan in which the armed forces have been deployed to support local armed self-defense groups against a drug cartel. This is not a situation or a model of public safety that Peña Nieto wants to showcase internationally. Obama needs to keep U.S. involvement in Mexico’s drug war low-profile, while dropping the “shared responsibility” slogan to promise support for Peña.

* Given the emphasis on fossil fuel development, it’s not likely that any major declarations about climate change will be made. It will be difficult, unless the most cynical hypocrisy is employed, for the leaders to declare a serious commitment on climate change, although there will probably be an effort to mention renewable energy development.

* China will be the uninvited guest at the Summit. All three nations are looking to compete with the Asian giant, as the U.S. increasingly views its rise as a security threat. The nature of these discussions will likely not be made public.

This is not the direction we want to go in. It presents huge risks for Mexican citizens. Mexican workers forced to compete globally will see more downward pressures on wages that have barely risen in real terms under the entire NAFTA two decades. Farmers will see pressures to convert food-producing lands and livelihoods into corporate farms for export or mining and oil concessions, deepening Mexico’s food dependency and sparking violent conflict. Pollution, already at crisis levels due to the lack of regulation and enforcement in industrial corridors aimed at attracting foreign investors, will increase. The environmental damage of extraction and the climate damage of the proposed one-million barrel a day increase in oil output in Mexico draws a catastrophic scenario.

This is the reality that clashes with the rose-colored vision of North American economic integration that the three heads of state will present at the Summit.

2 comments

  1. Sadly, the TPP is being negotiated in secret, and will be presented to the countries’ citizens as a fait accompli, just as NAFTA was. It is being hidden from citizens because the politicians know that citizens would reject it. This is not democracy. Citizens must know, and participate in, what is being done in their names.

    Comment by Lou on February 19, 2014 at 6:35 am

  2. Dear Ms. Carlsen,
    I admire your work and I share your scepticism that the current summit will achieve anything of substance. However, your claim — made more specifically in your email alert — that Peña Nieto’s energy reform “has spurred widespread opposition in Mexico” is quite misleading. That widespread opposition to the reform FAILED to materialize as the measure was being debated in the autumn was one of the remarkable stories of 2013. Opposition, yes; colossal marches in the streets (as López Obrador and others predicted), no.

    For an alternative and measured view of the partial (sic) privatization of Mexican energy, your readers might be interested in the article penned by former Pemex CEO Adrián Lajous in the October edition of Nexos (www.nexos.com.mx/?P=leerarticulo&Article=2204392). Lajous took the job as an opponent of privatization, but his five years at the helm of Pemex convinced him that the introduction of private-sector investment and know-how was not only desirable but necessary for the survival of Mexico’s self-sufficiency in oil.

    As Lajous notes at the end, the argument between state-run and private-sector oil is a false dichotomy — although it’s one that the left has perpetuated (“Peña Nieto’s giving our oil to the gringos!” etc.). What’s needed, he says, is a private-public partnership. Which is what the recent reform has initiated.

    Sincerely,
    Andrew Paxman

    Comment by Andrew Paxman on February 19, 2014 at 10:57 am

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