- The Washington Times - Monday, November 26, 2012

U.S. immigration reform, U.S.-Mexican drug-control policies and the possibility of opening Mexico’s state-controlled energy sector to foreign investment are among Tuesday’s discussion topics when Mexican President-elect Enrique Pena Nieto visits the White House.

Mr. Pena Nieto is keen on using the visit to focus President Obama on the potential for economic growth between the two nations, sources close to the incoming Mexican president say.

In addition, a key issue will be drug-control policies in the wake of Colorado and Washington state voting to allow the recreational use of marijuana, in violation of federal law.

A leader of Mr. Pena Nieto’s political party — the Institutional Revolutionary Party (PRI) — has said the incoming administration must rethink how to deal with drug cartels now that the two U.S. states have eased enforcement of drug laws.

The U.S. support for Mexico’s iron-fisted drug war dominated the U.S.-Mexico relationship through Mr. Obama’s first term, as economic ties quietly surged between the two nations under the 1994 North American Free Trade Agreement.

A 40 percent jump in Mexico’s per-capita gross domestic product since NAFTA’s inception has resulted in a robust Mexican middle class eager to buy automobiles and other expensive goods for which their country had not been a major market.

With Canada as the No. 1 U.S. trading partner, Mexico now rivals China for the No. 2 spot — ahead of Japan, Germany, the United Kingdom and Brazil.

Mr. Pena Nieto has said the landscape is ripe for deeper relations among Mexico, the United States and Canada, perhaps creating the world’s most powerful economic bloc under a “NAFTA 2.0.”

Latin America analysts in Washington generally agree that Tuesday’s meeting between Mr. Pena Nieto and Mr. Obama represents a unique chance to reshape the U.S.-Mexico relationship.

“I think the theme is that there is an opportunity here, there is a sense of this sort of unusual moment,” said Michael Shifter, who heads the Inter-American Dialogue think tank in Washington.

Mr. Obama’s posture on immigration reform has widespread support in Mexico, where leaders from across the political spectrum have long criticized the U.S. treatment of illegal immigrants.

Mr. Shifter said Mr. Obama’s re-election has fueled Mexican hopes for a broader softening of the U.S. posture toward Mexicans living illegally in the U.S.

Meanwhile, Mr. Pena Nieto’s victory has been watched closely by U.S. energy executives eager to capitalize on the potential opening of Pemex, Mexico’s state-controlled oil and gas corporation.

But the “Obama administration is going to encounter resistance to immigration reform here in the United States, and there’s going to be resistance to energy reform in Mexico,” said Mr. Shifter.

Opening Pemex to foreign investment is unlikely to come easily in Mexico, where it will require a series of politically delicate legal reforms.

“The debate in some political sectors in Mexico is very critical of the idea to allow private capital to be invested along the national oil company, Pemex, claiming that the foreigners want to take away our national resources,” said Emilio Lozoya, the foreign-affairs coordinator for Mr. Pena Nieto’s pre-Cabinet transition team.

What remains to be seen is the extent to which positive talk from Mr. Obama will help or hurt Mr. Pena Nieto’s efforts to break through opposition by Mexican leftists to the energy reforms.

Mr. Pena Nieto has tried to focus the energy debate on the potential for job creation in Mexico, along with the nation’s own aspirations for energy independence.

“Due to the current outdated legislation, Mexico is currently importing liquid natural gas from South America and the United States instead of developing our own sources of natural gas and shale gas, which are extremely rich,” said Mr. Lozoya. “In addition, we export raw oil and import huge volumes of gasoline from the rest of the world.”

“What the president-elect is proposing, is not privatizing Pemex by any means, but rather allow the private sector to co-invest in some areas of opportunity that Mexico is not developing due to a lack of technology and capital,” he said, adding that the such reforms were initially proposed in 2008 by the National Action Party of outgoing President Felipe Calderon.

“Now, the PRI, under a reformist president, is proposing a similar opening, while preserving the state’s dominance and ownership in the sector,” Mr. Lozoya said. “Therefore, I see a good possibility of modernizing our legal framework, which will ultimately produce more employment opportunities for the Mexican population.”

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