Donald Trump has made Mexico-bashing a major part of his public discourse. Trump still brags about the thousands of people who attended his campaign rallies and gleefully shouted, "Mexico!" when asked who would pay for a new border wall. During his final few days before taking office President-elect Trump repeatedly boasted about his efforts to discourage investment in Mexico and has singled out Ford, Toyota, GM, and BMW for criticism. Trump seems to be convinced that he can take an aggressive stance in his negotiations with Mexico and squeeze out some extra value for the U.S. Unfortunately, however, Trump also demonstrates a frightening lack of understanding about the complexities of modern manufacturing and Mexico's internal politics. His continued insistence that Mexico will pay for his border wall chafes with Mexican voters and may impact Mexico's upcoming presidential election in 2018. Trump has yet to define a clear policy agenda in regards to Mexico. As he and his team prepare their plans for next four years, I reached out to Eric Farnsworth, the vice president of the America's Society, a Latin America-focused think-tank, to ask about what factors Trump should take into consideration as he designs his Mexico strategy.

1. What Does Donald Trump Need
To Understand About Mexico?

2. Donald Trump has made Mexico-bashing a major part of his
public discourse. Trump still brags about the thousands of people
who attended his campaign rallies and gleefully shouted,
"Mexico!" when asked who would pay for a new border wall.
During his final few days before taking office President-elect
Trump repeatedly boasted about his efforts to discourage
investment in Mexico and has singled out Ford, Toyota, GM, and
BMW for criticism. Trump seems to be convinced that he can
take an aggressive stance in his negotiations with Mexico and
squeeze out some extra value for the U.S. Unfortunately,
however, Trump also demonstrates a frightening lack of
understanding about the complexities of modern manufacturing
and Mexico's internal politics. His continued insistence that
Mexico will pay for his border wall chafes with Mexican voters
and may impact Mexico's upcoming presidential election in
2018. Trump has yet to define a clear policy agenda in regards
to Mexico. As he and his team prepare their plans for next four
years, I reached out to Eric Farnsworth, the vice president of the
America's Society, a Latin America-focused think-tank, to ask
about what factors Trump should take into consideration as he
designs his Mexico strategy.
Nathaniel Parish Flannery: Mexico has played a big role in
Trump's discourse so far. In terms of the U.S.-Mexico economic
relationship, what's at stake as Trump starts his negotiations?
Eric Farnsworth: What’s at stake is the global competitiveness of
the U.S. economy. The relationship with Mexico is deep, broad,
and multi-faceted. Mexico is our second largest export market
and third largest trading partner after Canada and China. No
longer do we simply trade together, now we design and make
products together, including services. The relationship has grown
and evolved dramatically since the days before NAFTA. In fact,
according to the NBER some 40% of Mexican production is U.S.
content; for Canada the equivalent number is 25%, for China,
four. Production is truly a shared enterprise, and when Mexico
does well, so does the United States and vice versa. We don’t
make stuff and send it to them and they don’t make stuff and

3. send it to us. It is a co-production model based on the mutual
benefits including comparative advantages and production
efficiencies that we both bring to the table. Unfortunately, the
impression has developed from both the left and the right that
the primary indicator of economic well-being is the U.S. trade
balance. But the trade balance is a one dimensional statistic; it
does not illustrate the significant surplus that the United States
routinely runs with Mexico in services or take into account the
critically-important investment side of the economic relationship.
The United States now threatens to misdiagnose the problem,
and may therefore be inclined to prescribe a course of action
that actually makes matters worse. Mexico is not, in fact, the
cause of U.S. economic sluggishness; it is a critical partner in
helping the United States compete effectively with China and
other emerging economies. If the United States takes steps now
to dismantle or complicate the relationship, not only will our
economy and the jobs that depend on trade with Mexico suffer
concretely, but we will also show our closest trade and
investment partners that the United States is no longer a reliable
long-term partner. This is already causing them to seek diversity
in trade and investment relations, namely by building further
linkages with Beijing. As well, we need to remember that Mexico
has its own politics; with the next presidential elections scheduled
for 2018, perceptions that the United States is no longer a willing
partner will surely amplify the political attractiveness of populist,
nationalist candidates who have little interest in building relations
with the United States. This would be a setback of historic
proportions.
Parish Flannery: Trump has made the issue of immigration into a
major focal point. But, trends in migration in Mexico have
evolved greatly over the past few years. What does Trump need
to take into consideration as he works to shape his discourse with
Mexico on the topic?
Farnsworth: Net migration to the United States from Mexico is
now essentially zero, and has been for some time. This represents
both a reduced attractiveness to potential migrants of the U.S.

4. economy and social environment while also indicating the
greater attractiveness of the Mexican economy for its
nationals. There is no massive flow of Mexican migrants across
the southern U.S. border that a new, almost 2000-mile wall would
ameliorate. To the extent migration is a problem that must be
addressed, the primary surge of migrants in the past several
years has come from Central Americans desperate to leave the
violent circumstances and dead-end economic prospects that
many face in their home countries. In order to address these
issues effectively the United States actually needs Mexico’s
cooperation to reduce the throughput of migrants from Central
America as well as to assist with repatriation as appropriate. (The
gathering storm of Cubans stuck in Mexico intending to migrate
to the United States and now prevented from doing so by the
change in U.S. policy is a perfect example.) And, in order to
address the issues longer term, so that Central Americans prefer
to stay at home and work for better circumstances there, the
United States and Mexico clearly have consistent
interests. Cooperation to achieve improved results, however, will
be much less forthcoming if relations between Washington and
Mexico City become frosty.
Parish Flannery: The issue of security plays a big role in U.S.-
Mexico relations. Will Trump's hardball tactics undermine
Mexico's cooperation on U.S.-led anti-drug and anti-terrorism
initiatives?
Farnsworth: Security cooperation with Mexico can never be
taken for granted. The history, politics, and sovereignty issues are
too significant and never far from the surface. In recent years,
both countries have managed to put aside the natural
suspicions that have haunted the relationship at least since the
1840s, and have found meaningful, pragmatic ways to
collaborate on critically important yet exceedingly difficult
security issues. The process of confidence building has taken
years and endured numerous hiccups, including the traditional
Mexican view that security issues, specifically drug trafficking and
control, are a much greater problem for the United States than

5. for Mexico and therefore the primary burden remains with
Washington. Due to sustained, bipartisan efforts, the security
relationship—on drugs, terror, and new threats including cyber—
have arguably never been better nor yielded more concrete
results. Even embarrassing episodes such as the prison escape of
Joaquin “El Chapo” Guzman can be turned into positive
examples of security cooperation including re-capture and
extradition from Mexico to the United States. El Chapo was
extradited to the U.S. on January 19. This type of cooperation is
relatively recent. Mexico's willingness to bear the costs of U.S.-led
initiatives is not to be taken for granted. The current Mexican
President, Enrique Pena Nieto, will serve for less than two
additional years and the race to succeed him has already
begun. Pena Nieto and senior Mexican government officials
have given notice publicly in recent days that they will re-
evaluate the relationship with the United States across all aspects
to the extent the Trump Administration pursues actions
inconsistent with a more collaborative bilateral relationship. But
the real test may come in 2018, when Mexicans go to the polls
and will have the opportunity to vote for a new president with a
more strident, anti-American platform seeking to take
advantage of a new strain of nationalism that may already be
emerging across Mexico as a reaction to the aggressive rhetoric
that started during Trump's presidential campaign. It is difficult to
paint a scenario whereby the deterioration of the overall
bilateral relationship would have anything other than a
commensurately negative impact on Washington’s security
agenda. The United States is safer and more secure to the extent
our borders are shared by peaceful, prosperous partners willing
to work with us to address common security concerns. That is
just a fact. Weakening ties with Mexico ultimately weakens the
U.S.
http://www.forbes.com/sites/nathanielparishflannery/2017/01/20/what-
does-donald-trump-need-to-understand-about-mexico/#65190d312a40