Two Nations Indivisible: Mexico, the United States, and the Road Ahead by Shannon K. O'Neil

Author:Shannon K. O'Neil [O'Neil, Shannon K.]
Language: eng
Format: mobi, pdf
Publisher: Oxford University Press, USA
Published: 2013-03-21T14:00:00+00:00

Economic history shows us that trade has been a positive engine for wealth creation. From the vast Roman and British empires to the successes of the smaller Nordic trading states and the merchant republic of Lebanon, international exchange has underpinned economic growth and higher standards of living for centuries. Empirical evidence supports the relationship between economic openness and development—more open economies do better in terms of life expectancy, education, and income.112 Closed economies, on the other hand, fare poorly. Historically, many just fade away—Pomerania, overcome by the more open Prussia (now Germany), or Burgundy, subsumed by France. Today’s protective standouts include Myanmar, North Korea, and Cuba—countries few Americans would willingly trade in their passport to join. Worse, economic protection and political oppression often go hand in hand.

America’s past lessons point away from closing U.S. borders as a way to defend American workers and well-being. The now infamous Smoot-Hawley Tariff Act of 1930, which raised tariffs on some twenty thousand imported products, did not benefit U.S. companies or workers. In fact, many economists and historians blame it (and the retaliatory tariff increases from other nations) for deepening the Great Depression. Yet finding a path that broadly spreads the benefits of trade and opening is still difficult, and one with which the United States now struggles. Former U.S. treasury secretary Larry Summers summed up the quandary well: “The twin arguments that globalization is inevitable and protectionism is counterproductive for almost everyone have the great virtue of being correct, but they do not provide much consolation for the losers.”113

The United States became the world leader it is today on its economic prowess. While it continues as the world’s most important economy, it too must adapt to the current economic realities. How best to navigate inexorable globalization—and to make sure the benefits are spread broadly—is the U.S. challenge today.

An important part of a more inclusive solution to this dilemma lies in closer economic connections with America’s neighbors, and in particular with Mexico. After three decades of change, Mexico now boasts a strong, stable, and open economy, and, more than many nations, largely complements rather than competes with the United States in global markets. Rather than rejecting closer ties, we should be embracing the back and forth across the border, as it has the potential to create a rising economic tide, lifting all boats.

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