Robert Pastor "North America: Vision or Illusion?" May 1, 2003

Professor Robert Pastor talks about his vision for strengthening the relationship between Canada, the United States and Mexico by going beyond NAFTA.

A Vision of Integration in North America
Abigail Thorne-Lyman, Department of City and Regional Planning

Robert Pastor, the Vice President of International Studies at American University, concluded the U.S.–Mexico Futures Forum for spring semester 2003 with a visionary look at the future of North American relations. He argued that the future success of the North American Free Trade Agreement (NAFTA) hinges on creating an international policy that works towards the economic convergence of North America. The lecture was drawn from his recently completed works, including his book, Towards a North American Community: Lessons from the Old World for the New, published in 2001.

“When people look at North America,” Pastor began, “they don’t see a lot. They see a geographical expression.” Thus when President Vicente Fox proposed “a community of North America, an integrated agreement of Canada and United States and Mexico” in July 2000, it was considered innovative even six years after the creation of NAFTA. In light of increased border security after Sept. 11 and unilateral action by the United States, the future of integration between Canada, the United States, and Mexico appears grim. Pastor argues that in spite of difficult times, investment in the further deepening of North American integration by strengthening the institutions that connect the three countries and seeking trinational solutions to issues such as security, transportation and economic development would result in critical economic and political benefits for all three nations.

Leaders in the United States and Canada need to realize that North America is an interdependent economy, a concept that Pastor described as neighborhood dynamics. If our neighbor improves their situation, we improve, Pastor explained, and if our neighbor fails, “we cannot contain the consequences of that.” As we approach NAFTA’s ten-year anniversary, Pastor considered the present realities of the agreement and looked toward the European Union to provide lessons about how to deepen integration.

According to Pastor, NAFTA has fulfilled many of the goals of its creators, yet it has left many issues unresolved. North America has become the largest free trade area in the world; trade and investment between the three countries have dramatically increased. Today, the United States exports four times more to Canada and Mexico than to Japan and China. Trade in Mexico has greatly expanded as well. Fifteen years ago, Mexico ranked alongside Brazil in its gross trade value; since then, Mexican trade has more than tripled. Most of this trade has been external to the maquiladora system. In addition, there is evidence that NAFTA has contributed to the creation of 22 million jobs since 1994.

Even though the three nations have become highly interdependent, this has occurred in an asymmetrical manner. While 80 percent of all Canadian and Mexican trade is with the United States, only 30 percent of the United States’ trade is with its neighbors. Despite indicators that NAFTA has had a positive impact on overall economic growth, the “development gap” between Mexico and its northern neighbors has continued to increase since 1994. This gap transcends simple per capita income differences, and refers also to an imbalance in job opportunities, educational levels and basic infrastructure.

A dearth of available jobs in central and southern Mexico has had an enormous impact on the population distribution across the nation. Increasingly, the Mexican population is concentrated at the border with the United States, where most infrastructure investment is also concentrated. Moreover, the gap in income levels and job opportunities contributes to immigration, an issue which has become controversial in the United States. While one-fourth of legally documented immigration to the United States is from Mexico, three-quarters of undocumented immigrants to the United States enter from the Mexican border.

NAFTA has failed to narrow the development gap between Mexico and its northern neighbors because the treaty failed to provide an institutional structure through which international investment and collaboration might occur. Pastor summarized the treaty with a quote by comedian Lily Tomlin: “Together, we are in this alone.” According to Pastor, one of NAFTA’s weaknesses is that it did not facilitate further investment in basic infrastructure or organizational systems to support the increased volume of trade. Mexico has focused its NAFTA-oriented investment on the border region, in part because there are no significant roads to the center and south of the country and no money to build them. Furthermore, Mexico is far behind the United States and Canada in its education and training levels, yet no significant international investment has been made in the Mexican educational system.

Pastor argued that the United States and Canada could benefit greatly by investing in Mexico’s basic infrastructure and post-secondary educational systems. Not the least of these benefits is a predicted decline – and perhaps reversal – in the number of undocumented immigrants to the United States. Pastor described the chain of events that might lead to this decline: As infrastructure investments are made, industries would be able to move further inland and to expand their Mexican operations. With some assistance this could ultimately lead to an improvement in the quality of life and job opportunities available to Mexican residents, who might otherwise cross the border with the United States to seek better work opportunities.

Despite the long-range vision involved in Pastor’s proposal for a more integrated North America, his path to achieving integration is concrete. First, the United States must rethink its border practices and procedures and reconsider the purpose of the Department of Homeland Security. “Each terrorist threat…results in a choking at the border,” Pastor observed. Eventually, Pastor hopes that the customs offices in each nation can be integrated to enforce one common external tariff and that these offices can provide training at a central location to enforce uniform customs treatment across North America.

Second, North American nations should create strong institutions to implement and monitor NAFTA activities. Pastor recommends the creation of a “lean and advisory” group of fifteen individuals appointed by the three countries, whose purpose would be to create an agenda for the integration of North America. Likewise, political leaders should create a court in which trade and development practices can be deliberated. While institutions of this type have been created ad-hoc, they have been primarily symbolic in function. Finally, Pastor recommended that a parliamentary group be created with representatives from the three countries. While bi-parliamentary groups exist between the United States and its neighbors, there is no such group for all three nations. Moreover, Pastor observed, the United States Congress does not take the existing groups seriously, much to the dismay of political leaders in Mexico and Canada.

While Pastor encouraged NAFTA policymakers to look to the European Union for guidance on integration measures, he emphasized that the European Union can also show North America what to avoid in the creation of these international organizations. Pastor argued that NAFTA organizations should remain “lean,” because he believes the EU is currently slowed by excess bureaucracy. He is optimistic that NAFTA can avoid this problem because it has been “more market-driven as an integration experience” than the “war-born” European Union, which was partially created to mitigate political concerns.

Through its new institutional structures, NAFTA should invest in infrastructure and post-secondary education in Mexico. Pastor proposes a $100 billion investment over ten years, which would come from both the United States and Canada. Similar investments by the European Union have demonstrated the effectiveness of this model in closing the development gap between the poorest and wealthiest European member nations. Twenty years ago, Mexico’s educational system ranked with Portugal and Spain. By 2000, the Spanish and Portuguese educational systems had improved dramatically, while Mexico’s system showed little improvement.

The integration of North America is more feasible than people may realize. Pastor pointed out that international public opinion surveys indicate that North Americans are increasingly supportive of the concept of integration, even as political leaders emphasize “nineteenth century views of national sovereignty.” The ten year, $100 billion investment should not be considered a burden, Pastor argued, when the United States is willing to invest $75 billion in Iraq over the course of a year. Investment in Mexico, moreover, would be more than recovered by narrowing the North American development gap.

Professor Pastor speaks with Professor Richard Buxbaum (center) and Fernando Sandoval after his talk. Professor Buxbaum, who moderated the event, is the Jackson H. Ralston Professor of International Law at Boalt Hall School of Law, and Mr. Sandoval is the Deputy Consul of Mexico in San Francisco.