Time to remind Mexico 'we're here:' Observer Analysts weigh in on how Enrique Peña Nieto might transform relations with Canada.

by Ally Foster (feat. Colin Robertson)

Embassy
July 11, 2012

Prime Minister Stephen Harper has made his initial courtesy call to Mexico's president-elect, but one observer says he now needs to "send a housewarming gift" to remind the new government of Canada's value.

As Canadians were celebrating Canada Day, Mexico was wrapping up a national election that saw the return of a former power, the Institutional Revolutionary Party, known in Mexico as PRI.

The July 1 election saw the fresh-faced Enrique Peña Nieto lead with 38.21 per cent of votes. Despite opposition allegations that the 45-year-old bought votes in the lead-up to the election, a recount confirmed the results and he has been named the president-elect.

Prime Minister Stephen Harper's office said he called Mr. Peña Nieto the night after the vote to congratulate him.

Mr. Harper "also stressed the strong bonds between our two countries," wrote Andrew MacDougall, Mr. Harper's director of communications, in an email to Embassy.

"The prime minister indicated that he looked forward to meeting the president-elect in person in the not-too-distant future," he added.

But, like any good neighbour, Mr. Harper should take steps to welcome the newcomer, said Carlo Dade, a senior fellow at the University of Ottawa's School of International Development and Global Studies.

Mexico is a key Canadian trading partner, through the North American Free Trade Agreement, and the two countries share regional co-operation, security, and tourism ties.

Analysts say Mr. Peña Nieto could open up new investment routes for Canadians looking to exploit Mexico's energy sector, and change the troublesome security environment affecting Canadians travelling there.

But before it can press its interests in these areas, Canada needs to show it cares, said Mr. Dade.

"It's up to [Mr. Harper] to send a housewarming gift down to Peña Nieto—something nice that says, 'We're here, we're your friends,'" said Mr. Dade. "There are several things that Harper could give; but the key thing is, he's going to have to take the initiative."

And an invitation to Canada to discuss areas of mutual interest should also be on Mr. Harper's to-do list, said Mr. Dade.

Areas of mutual interest between Canada and Mexico are numerous, and observers differ on how best to approach the issues with a new president to the South, and whether or not Mr. Peña Nieto will change the tide.

Andrés Rozental, chairman of the Mexican Council on Foreign Relations and co-editor of the new book Canada Among Nations 2011-2012: Canada and Mexico's Unfinished Agenda, told Embassy in an email that Canada should not expect any major changes under Mexico's new government.

But "the Trans Pacific Partnership negotiations," he added, will "bring Mexico and Canada closer together on trade, investment and other issues involved in the agreement."

Both Canada and Mexico were offered a position in the free-trade talks at the G20 summit last month.

Trade and investment

Canada and Mexico already enjoy free trade through NAFTA, which is expected to be strengthened by the TPP.

According to the Mexican NAFTA office in Ottawa, bilateral trade between Canada and Mexico grew by more than 14 per cent in 2011, reaching a record-level $34.4 billion US.

Aside from normal growth, analysts are excited that Mr. Peña Nieto may usher in reforms to the country's energy sector that could benefit Canadian investors. Energy reform was one of his campaign promises.

Pemex, a state-owned oil and natural gas company, was given an exclusive monopoly over the industry in the Mexican constitution, explained Colin Robertson, a former Canadian diplomat and vice president at the Canadian Defence and Foreign Affairs Institute.

"It was the PRI that created the nationalized [industry] and it's been as important to Mexico as culture is to Canada," he said. "As we wrap ourselves in our [national] flag, the Mexicans wrap themselves in the flag of Pemex."

The company's revenue accounts for as much as 40 per cent of the national budget, according to the New York Times, but peaked in oil production in 2004, and has lost nearly a quarter of its available oil reserves, according to Reuters.

Mr. Peña Nieto might have the capacity to allow for foreign investment into Pemex, which his predecessor, Felipe Calderón, was never able to do because he lacked the support in Congress, said Mr. Robertson.

"I think there's a real opportunity for Canada," he added.

Mr. Dade also said that the opportunity to invest in Mexico's energy sector "would be huge," for Canada, but added that Canada would be competing with other countries to get a piece of Pemex.

"This is why you would want to have invested in the relationship over the years, so that if Pemex does open up, Canada gets an early call," he said. "We'll have some benefits because of NAFTA, but we'll want to go beyond those benefits."

To improve bilateral relations, Mr. Dade said that Canada could offer resources and people to assist Mexico in reforming areas such as the judicial system and tax collections.

Jennifer Jeffs, president of the Canadian International Council, shared a similar sentiment.

"Rather than the aid dollars, actually giving technical advice on issues such as policing and judicial reform would be very helpful," she said.

Security

While Mexico continues to struggle to keep the violence of drug cartels at bay, debate is growing about the approach Mr. Peña Nieto should take to keep both Mexican civilians and visitors out of the line of fire, and what—if anything—Canada could do to help.

Mr. Rozental said Mr. Peña Nieto's approach would differ from Mr. Calderón's aggressive, self-proclaimed 'war on drugs.'

"Peña Nieto will focus much more on the safety of Mexicans and visitors to Mexico, and less on the Mexico-US drug interdiction side of the equation," he said. "He has ambitious plans to re-structure the security apparatus in Mexico by gradually returning police functions to civilians rather than having the military on the streets."

Diana Villiers Negroponte, a senior fellow at the Washington-based Brookings Institution who studies the relationship between criminal gangs and state institutions, said Mr. Peña Nieto has promised to return police forces to common criminal activity such as kidnapping, robbery, and extortion, without diluting efforts to the principal threat to the country: the drug war.

She said Mr. Peña Nieto might try to create a unified, national police force, "which would have a national standard—you would be required to have so many years of schooling, the training program would be nationalized...you would install audits within the police precinct."

She explained that this was yet another goal of Mr. Calderón that was never realized because of his lack of support in Congress.

She said the police reform would be a "significant change which PRI could pull off," and added that Canada could help.

She explained that the RCMP is "known for their quality" and that lending officers to Mexico for the training of their police force would be "a great benefit."

But while some said it's time for action to reaffirm Canada's commitment to Mexico, Laura Macdonald, a Carleton University political science professor and co-director of the Centre on North American Politics and Society, said it's time to hit pause.

Ms. Macdonald, who just returned from a research trip to Mexico, said Canada should take time to observe conditions in the country, and reassess its relationship.

"I just think that we have to think carefully about what our role is in Mexico," she said. "I think we need a systematic examination of the situation and what kind of useful role Canada could play."

Ms. Macdonald said she is very concerned about the allegations of a fraudulent election.

"I'm hoping that Canada will actually take this opportunity to evaluate what's happening in Mexico...the state of democracy and the state of human rights," she said.

Refugees and immigration
Ms. Macdonald referred to speculation that Mexico might find itself on Immigration Minister Jason Kenney's 'safe country list' as part of the newly minted Protecting Canada's Immigration System Act, formerly Bill C-31. The law reforms Canada's refugee system to create differing asylum-seeking streams, including a fast track for refugee claimants coming from so-called safe countries.

"I think [making Mexico a safe country] would really send a bad signal, especially right now, given the election of Peña Nieto who is associated with a party that is well-known for its historic links with corruption and human rights violations."

"He says he represents the new PRI," she said, "but we know that he also has many links to...the old style: corrupt, authoritarian leaders of the past. He's backed by very powerful forces in Mexican society."

"While I hope that he can deliver on that promise of breaking from that tradition, at the moment, I'm quite skeptical of that," she added.

The PRI ruled for almost seven consecutive decades, and was notorious for authoritarian rule, according to Ms. Jeffs.

But she took an 'innocent until proven guilty' approach, and didn't highlight the same skepticism of a fraudulent election.

"We have to take them at their word before criticizing them, or before issuing any warnings," she argued. "They have told us it is a new PRI, and the Mexicans have agreed to the point where they have voted them in, and we have to support them and support the democratic process that has taken place."

"Mexico has been ready to be deemed a safe country for a long time, and I don't know that Peña Nieto is going to change that," she added.

Visas
Ms. Macdonald said Canada could begin re-assessing the visa requirement Mr. Kenney placed on Mexico in 2009, when the number of Mexican refugee claimants in Canada nearly tripled.

Mr. Rozental argued "as long as Canada maintains the visa requirement on Mexicans our relationship will be politically low profile."

Mr. Dade agreed, and said that with the reform of the immigration and refugee system it's time Canada consider lifting the requirement. That would be the perfect start to a new relationship, he said.