U.S. President Barack Obama and his Mexican counterpart, Enrique Pena Nieto, were among leaders praising the Trans-Pacific Partnership (TPP) trade pact agreed upon this week in Atlanta. Involving 12 Pacific Rim nations, the accord, which still requires the approval of national governments, has been likened to a super North American Free Trade Agreement (NAFTA) covering 40 percent of the global economy.
“The Trans-Pacific Partnership will translate into bigger investment opportunities and well-paid employment for Mexicans,” President Pena Nieto wrote on his Twitter account after the Atlanta agreement was announced.
Yet like NAFTA before it, the TPP could open the door wide to greater and more lucrative opportunities for a generally unspoken class of entrepreneurs lurking in the midst–drug traffickers.
Prior to the Atlanta meeting, some analysts cautioned that drug trafficking organizations will be meticulously studying the liberalization of trade routes over a vast area, as well as the smuggling and money-laundering opportunities presented by the tearing down of tariff walls and the circulation of thousands of different products.
Jeremy Douglas, Asia regional representative for the United Nations Office on Drugs and Crime, said Asian customs systems and law enforcement personnel are unprepared for an increased flow of contraband into their countries.
“Customs agents and police in Asia frequently have no idea of the connections to the Americas and no idea of what could affect them very soon,” Douglas was quoted in the Financial Times.
In recent years, the illicit drug business has boomed in the Pacific Rim region. In a sign of the times, reported seizures of amphetamine pills hit the 245 million mark in eastern and southern Asia during 2013, representing an amount eight times greater than the total confiscated circa 2010.
Mexican drug trafficking organizations such as the Sinaloa Cartel and the New Generation Jalisco Cartel have been implicated in the Asia and Pacific drug trade, where profits can be enormous.
For instance, in Hong Kong a kilo of cocaine reportedly fetches three times the price it does in the U.S, while the same portion of the drug commands six times the U.S. price in Australia, one of the countries involved in the TPP negotiations. One estimate of the value of the illegal drug business in East Asia alone reaches $100 billion.
Although some Asian countries are notorious for their draconian punishments meted out against drug traffickers, the prospect of truly big profits drives the business.
“The severe punishments, such as life sentences or even the death penalty, are reflected in the exorbitant prices for drugs over there,” said Rodrigo Alpizar Vallejo, president of the Canacintra business association in Mexico.
It would be wrong to assume the Americas-Asia drug trade is a one-way flow from the West to the East. As different U.S. and Mexican media outlets have reported, China, (not a part of the TPP-at least for now), serves as a prime supplier of precursor chemicals shipped to Mexican Pacific ports that are necessary for the manufacture of methamphetamine, a product once mainly made in the U.S. but like clothes and cars in the old days before off-shoring is now largely manufactured abroad and part of a triangular trade.
“China and the United States are the two biggest economies of the world,” wrote Claudio Lomnitz in the Mexican daily La Jornada. “China produces precursors of methamphetamine and the United States consumes them. Mexico is in the middle: it receives chemicals from China, manufactures methamphetamine and smuggles it to the United States.”
The shadowy Trans-Pacific trade in meth, Lomnitz contended, is the contextual backdrop to much of the bloodshed in Mexico during the last several years. Many fierce underworld wars, he continued, have been more about control over the manufacture and distribution of methamphetamine than cocaine trafficking.
“China supplies the chemicals, the United States the consumers and Mexico the dead,” Lomnitz wrote.
Immediately on the heels of the Atlanta TPP negotiations, the White House and Mexico’s Secretariat of the Economy both released statements. Neither communiqué directly mentioned the illegal drug issue, but the Obama administration statement said the TPP countries made a commitment to ratify or respect the United Nations Convention against Corruption and adopt a basket of other “good governance” measures that might have some effect on the official corruption that always accompanies the illicit drug business.
Additional Sources: El Diario de El Paso/Financial Times, September 26, 2015. La Jornada, July 1, 2015 and October 6, 2015. Articles by Claudio Lomnitz, Julio Reyna and Alonso Urrutia.
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Center for Latin American and Border Studies
New Mexico State University
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