The March 26 edition of the New York Times has an article, titled Renegotiate NAFTA?: Mexico Says Get On with It. What is important about the story is that the uproar generated by the ascendance of Donald Trump to the presidency and his call for renegotiating NAFTA, the economic uncertainty he has caused is having real and serious negative consequences.
The Trump Administration could be creating or may have already created a migration problem. Migration problems with anyone’s neighbor are always serious for the receiving country. If you are not sure about what this looks like take a look at any part of the world that is the receiving country. Quick examples that come to mind are Argentina at different times in the recent past, Jordan and Turkey in the wake of the Syrian civil war — and well the US and Mexico. When people decide to move, the countries which experience the greatest impact are those which are the closest.
The story reports that last year foreign investment in Mexico fell by 6% and is expected to drop by 21% this year. This means slower economic growth, rising interest rates and more political upheaval in Mexico. These are all prescriptions for more people in Mexico making the move to places in the US. On the US side of the border, the Trump Administrations pronouncements on immigration have created problems for agriculture by making it more difficult to find workers to harvest the crops. We are already witnessing a dramatic decline in foreign students choosing the US as their destination. Chinese and Indian students alone contribute more than $16 billion to the US economy. Some say that foreign students add about $33 billion to the US economy.
Notwithstanding the call to build a wall, hiring more ICE officers along the border and other dramatic pronouncements about immigration — none of these are more powerful migration factors than the economic and political forces which actually cause people to move. This is a fact that we have seen throughout history and which our political leaders are not going to change.
Mr. Trump’s gyrations about relations with Mexico and his threats to upend NAFTA may actually create a more serious migration problem something which was really not a problem to begin with. The one thing that the US should not want is a less stable Mexico. But everything that we do seems to be moving us in that direction.