Mexicans Select New President on Sunday
DEBBIE ELLIOTT, host:
Pamela Starr joins us now. She's a Latin America analyst with the Eurasia Group, which analyzes political risk in emerging markets.
Thanks for coming in.
Ms. PAMELA STARR (Analyst, Eurasia Group): It's a pleasure to be here.
ELLIOTT: Does it make a difference to the United States who wins this race?
Ms. STARR: It makes a difference to the United States, but I would argue it's a marginal difference, and it would be a difference more of tone than of really profound substance.
The U.S./Mexico relationship over the last 12 years has become increasingly institutionalized, and those things will help keep the relationship stable, regardless of who's elected.
ELLIOTT: What do you mean? What kinds of institutional relationships?
Ms. STARR: The main one I'm talking about is the North American Free Trade Agreement. So any problems in the economic relationship is dealt with in the confines of the formal dispute resolution mechanism of the North American Free Trade Agreement.
In terms of security, there's a great deal of formalized cooperation between the militaries, between the police forces, and between the security forces, meaning the intelligence agencies, in both countries. And that relationship will continue regardless who's elected.
ELLIOTT: Now, the Bush administration has been quiet about this election, not endorsing any candidate over another one. But do you think that this administration would prefer either candidate?
Ms. STARR: I think there's little doubt that this administration would prefer Felipe Calderon for two reasons. One, because he is more of a market oriented candidate, and he's more of an internationalist. So he would be active - an active ally of the United States on the international stage, much like Vicente Fox was.
Andres Manuel Lopez Obrador is a bit more of an enigma, and for the United States they're not quite sure what they're going to get. I think they're fairly sure they're not going to get another Hugo Chavez. But they don't know if they're going to get somebody who's going to be a prickly partner to the south or somebody who's going to be a willing partner.
ELLIOTT: And Chavez is Venezuela's president.
Ms. STARR: Excuse me. Yes. The president of Venezuela.
ELLIOTT: And there have been some reports in the press that Obrador may be more open to relationships with Latin American leftist policies. Is that something that the U.S. should be worried about?
Ms. STARR: Absolutely not. Lopez Obrador clearly comes from the left, but he comes from the center left, not the radical left, to begin with. So he doesn't have the same propensities that Hugo Chavez has.
But at the same time, there clearly are some in Mexico who have, particularly in Lopez Obrador's coalition, who do support Hugo Chavez and Fidel Castro. So under a Lopez Obrador administration, one would see a re-establishing of normal relations with those countries that have been extremely strained in the past few years under Vincente Fox.
But Lopez Obrador would never do anything that would alarm the United States, because he understands that his principal objective in Mexico, which is to improve the economy, to provide jobs for the poor, depends on Mexico's enormous economic reliance on the United States. And he doesn't want to harm that relationship in any way.
And so both of these actors would work with the United States. Calderon would do it more aggressively. Lopez Obrador would do it more quietly. But in general basic foreign policy, they're very similar.
Where they differ is on domestic policy. And that matters enormously for the United States as well, because the United States depends enormously on Mexico to maintain its global competitiveness.
ELLIOTT: What are some of the domestic policies that the Bush administration might be watching for?
Ms. STARR: Well, we think about the United States economy and the way it participates in the world economy. Increasingly, U.S. firms are exporting some of the production process abroad. Eighty percent of U.S. trade with Mexico is intra-industry trade, which means it's within the same company. They're just trading parts of the production process.
So the United States is using Mexico to keep its global costs of production low so it can compete abroad. But in order to do that, it needs the Mexican economy to be sound.
ELLIOTT: Now, are either of these candidates saying things that are more likely to help build that economy?
Ms. STARR: This is where the two candidates differ most dramatically. Felipe Calderon would want to continue the Fox strategy, which is largely rely on the market. If you maintain macro-economic stability, meaning low inflation, no change in the value of the Mexican peso, firms will be interested in investing and you will generate jobs that way.
Lopez Obrador has a completely different strategy. He is convinced that that strategy is insufficient. Its been tried for 12 years from his perspective, it hasn't worked. Therefore you need more state involvement in the economy to help the market generate jobs and to help the poor get themselves in a position that they have the resources that they need to actually participate effectively in the economy. That's the huge difference between them. The question for the United States is which strategy is better, and economists disagree on that.
ELLIOTT: Pamela Starr is a Latin American analyst with the Eurasia Group. Thanks for coming to speak with us.
Ms. STARR: It was a pleasure to be here.
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