{
  "id": "IN10641",
  "type": "CRS Insight",
  "typeId": "INSIGHTS",
  "number": "IN10641",
  "active": false,
  "source": "EveryCRSReport.com",
  "versions": [
    {
      "source": "EveryCRSReport.com",
      "id": 458659,
      "date": "2017-02-01",
      "retrieved": "2017-05-24T16:36:04.643802",
      "title": "Mexican-U.S. Relations: Increased Tensions",
      "summary": "On January 26, 2017, Mexican President Enrique Pe\u00f1a Nieto canceled an upcoming meeting with President Donald J. Trump after exchanges between the two leaders over social media concerning U.S. policies toward Mexico. In an address on January 25, President Pe\u00f1a Nieto vowed to protect Mexican migrants in the United States who are vulnerable to deportation and reiterated Mexico\u2019s refusal to pay for a border wall but also stated his \u201cwillingness to reach agreements\u201d if they are in Mexico\u2019s interest. Mexicans have strongly supported Pe\u00f1a Nieto\u2019s actions with respect to President Trump. After a phone call on January 27, Presidents Trump and Pe\u00f1a Nieto issued a joint statement in which they agreed to work through differences as part of a \u201ccomprehensive discussion on all aspects of the bilateral relationship.\u201d \nAdvances in Bilateral Cooperation\nUntil the 1980s, Mexico had a relatively closed economy and an independent foreign policy that was often at odds with the United States. Those policies gradually shifted, however, as Mexico opened its economy to trade and investment and increased collaboration with the United States. Since President Ronald Reagan, every first-term U.S. President has met with his Mexican counterpart either prior to his inauguration or immediately thereafter. Mexican presidents have emphasized collaboration with their U.S. counterparts, most recently on support for Mexico\u2019s domestic security and antidrug efforts.\nThe bilateral economic relationship is important to both countries because of the high level of trade and strong economic ties that connect them. Mexico is the United States\u2019 third-largest trading partner, and the United States is Mexico\u2019s largest trading partner. Since the North American Free Trade Agreement (NAFTA) entered into force in 1994, North American economies have become more integrated, including through extensive production chains that support thousands of jobs in both the United States and Mexico. U.S. manufacturing industries\u2014including automotive, electronics, appliances, and machinery\u2014all rely on support from Mexican manufacturers. Approximately 40% of the content of imports from Mexico is made in the United States. Some 80% of Mexico\u2019s exports are destined for the United States, making Mexico heavily dependent on the U.S. economy. Many people in the poorer regions of Mexico also rely heavily on worker remittances from the United States ($25 billion in 2015), which mostly or completely cover basic needs and may be used for capital invested in microenterprises.\nMexico has become a strategic U.S. ally in regional and global affairs. For example, as apprehensions of Mexicans on the southwestern border have declined to near historic lows, apprehensions of Central Americans have surged. In response, Mexico apprehended more than 150,000 Central American migrants and record numbers of migrants from Africa and Asia in FY2015 and FY2016. To prevent terrorists from transiting its territory, Mexico has imposed strict visa policies and collects and shares fingerprints and other data on all arrivals with U.S. officials. Law enforcement cooperation has led to the arrest and extradition of hundreds of Mexican drug kingpins over the past decade, including Joaquin \u201cEl Chapo\u201d Guzm\u00e1n. \nMexico\u2019s Tough Choices\nPresident Pe\u00f1a Nieto\u2019s approval rating has remained extremely low (under 25%) since 2014. Low oil prices, currency devaluation, and investors\u2019 unease about U.S. trade policy have hurt the Mexican economy. Pe\u00f1a Nieto\u2019s government has struggled to solve high-profile human rights cases, become embroiled in scandals, and faced security challenges, including the rising violence committed by organized crime groups competing to supply U.S. drug demand. Pe\u00f1a Nieto\u2019s surprise decision to invite then-candidate Trump for a high-profile visit to Mexico in August 2016 proved extremely unpopular in Mexico, as it failed to influence Trump\u2019s rhetoric or positions toward Mexico. Fallout from the visit led to the resignation of Mexico\u2019s Finance Minister, Luis Videgaray (who had organized the visit), although Videgaray is now Minister of Foreign Affairs. \nPe\u00f1a Nieto may have limited room to maneuver in future negotiations with the Trump Administration, as Mexican legislators and businesspeople are urging him to more vigorously defend Mexican interests. Mexico\u2019s sovereignty, its economic dependence on the United States, and the desire to preserve advances in bilateral cooperation are influencing Pe\u00f1a Nieto\u2019s decisionmaking. \nEconomic and Political Implications of Tense Relations\nPresident Trump has stated his intention to withdraw from or renegotiate NAFTA and potentially tax imports from Mexico to pay for the border wall. Either proposal could have considerable economic consequences. Mexican Economic Minister Ildefonso Guajardo has stated that Mexico would respond \u201cimmediately\u201d if the United States were to impose a border tax and that Mexico would consider withdrawing from NAFTA if negotiations were not favorable to the country. The United States could face unfair trade cases under the World Trade Organization or retaliatory tariffs on U.S. exports. A potential trade war could disrupt North American production chains, resulting in job losses in both countries and risking economic instability in Mexico. \nThe Mexican public appears to be behind President Pe\u00f1a Nieto in his stance toward President Trump, but public opinion could turn against him if he fails to work productively with the Trump Administration. Discontent with Pe\u00f1a Nieto could increase voter support for Andr\u00e9s Manuel L\u00f3pez Obrador, a leftist populist who is unafraid to antagonize the United States, in Mexico\u2019s 2018 elections.\nOutlook\nThe United States benefits when Mexico is stable, prosperous, and secure. U.S. interests likely would be impacted if Mexico slipped into a recession or violence escalated, particularly along the border.\nMexican-U.S. relations have generally grown closer over the past two decades. Common interests in encouraging trade flows and energy production, combating illicit flows, and managing environmental resources have been cultivated over many years. As evidenced by recent events, policy changes, or even rhetoric about potential policy changes, that run counter to Mexican national interests can have consequences for bilateral relations. Tensions in these relations could impact Mexico\u2019s willingness to cooperate with the U.S. government on migration enforcement and illicit drug crop reduction, which traditionally have been among many U.S. policymakers\u2019 top concerns.",
      "type": "CRS Insight",
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      "topics": [
        {
          "source": "IBCList",
          "id": 4847,
          "name": "Latin America, Caribbean, & Canada"
        }
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  "topics": [
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    "Foreign Affairs"
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}