Tuesday, July 11, 2006

New America Foundation calls for a 'Tex-Mex Marshall Plan'

It's time for a North American Union

Jun. 11, 2006

By Steven Hill
Special to The Washington Post
Fort Worth Star-Telegram
Copyright 2006

WASHINGTON - Immigration issues are always ripe for demagoguery, particularly in an election year. But the solution to the very real problems along the U.S.-Mexican border can be found, ironically, in that other part of the world that demagogues love to ridicule: old Europe.

Two years ago, the European Union admitted 10 new members. Like Mexico, all of these nations were poor, some of them fairly backward and most recently ravaged by war and dictatorship.

The leaders of the European Union wisely created policies for fostering regional economic and political integration that make the North American Free Trade Agreement "look timid and halfhearted by comparison," according to Bernd Westphal, consul general of Germany.

Europe realized it had to prevent a "giant sucking sound" of businesses and jobs relocating from the 15 wealthier nations to the 10 poorer ones. It also had to foster prosperity and the spread of a middle class and prevent an influx of poor workers to the richer nations.

So for starters, it gave the new states billions in subsidies to help construct schools, roads, telecommunications and housing, thus making these nations more attractive for business investment. It was expensive, but the result has been a larger economic union in which a rising tide floats all boats.

In return, the 10 poorer nations had to agree to raise their standards on the environment, labor law, health and safety -- and more.

Worker migration is regulated. Immigrants will be carefully integrated so as to cause the least disruption to the developed economies, with the goal of having open borders down the road.

This bold yet carefully planned EU approach suggests the direction that policy between the United States and Mexico should take. The demands of the global economy will push North American regional integration out of the realm of a shadow economy and flawed free-trade agreement. But what might such a U.S.-Mexico union look like?

It would start with massive subsidies from the United States to Mexico, a Tex-Mex Marshall Plan, with the goal of decreasing disparities on the Mexican side of the border and fostering a climate riper for investment. This would create more jobs in Mexico and foster a middle class, homeownership and better schools, roads and health care. Mexicans would stay home, becoming consumers of U.S. products.

But Europe's union is not just an economic one. It also includes continentwide political institutions for all 25 nations. As American-Mexican economic integration unfolds, regional political structures also make sense to allow better coordination and supervision of the regulatory regime and common goals.

We always assume that opening the border means hordes of Mexicans streaming north, but under this scenario, more Americans also would begin emigrating to Mexico. With the cost of living spiraling along the U.S. coasts, many Americans would find not only the cheaper prices but also the warm climate of Mexico a more attractive alternative than relocating to Kansas.

Call it the Mexican safety valve, with American workers migrating to Mexico in search of jobs, homeownership, even to start businesses. They would chase the American dream in Mexico.

The Census Bureau predicts that by 2050, the number of Latinos and Asians will triple in the United States and Anglos will make up only 50 percent of the nation's population. For many people, these changes are alarming, but economic disparities guarantee that poor Mexicans will continue seeking entry into El Norte.

Given these demographic realities, gradual integration of the American and Mexican economies is the only sensible solution.

The United States is missing out on huge economic opportunities; the European Union has grown to the largest trading bloc in the world.

Old Europe is looking spry, while the United States is looking clumsy and stuck to the flypaper of old ideas.

Steven Hill is director of the political reform program of the New America Foundation. This essay appeared previously in The Washington Post.

© 2006 Fort Worth Star-Telegram: www.dfw.com