Q&A: 'Economic Gloom Clouds U.S.-Mexico Ties'

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Bush and Mexican President Vicente Fox talk during the state arrival ceremony

TIME.com: How is President Fox's Washington visit playing with the Mexican public?

Peter Katel:It's obviously dominating the news, and what is being emphasized today, understandably, is Fox's surprise insistence that some sort of agreement on immigration be nailed down by the end of the year. That certainly plays well here, after President Bush's slight cooling towards a major and imminent deal on immigration. Of course what isn't being emphasized by the press in either country is that President Bush can't really conclude a deal on immigration with Fox, because executive power is limited — it's the U.S. Congress that writes immigration law.

Immigration from Mexico has long been a domestic political issue in the U.S., but why has it become a major political issue in Mexico?

Of all the changes that Fox has made in the Mexican political culture, one of the major ones — as unusual as this may sound to Americans — has been to recognize and champion Mexicans living illegally in the U.S., not only as a vulnerable and exploited minority, but as part of the greater Mexican nation. Mexicans had for various reasons shied away from acknowledging this reality, but Fox's has brought it out into the open. Not only that, he is also proposing a major change in U.S. law, which is something else that Mexico has never done. It has always refrained from challenging the laws of its neighbor because it doesn't want its own laws challenged, but Fox is trying to break the mold of the traditional U.S.-Mexico relationship.

More and more people in Mexico are depending on money from relatives north of the border, and Fox has recognized this. It makes economic sense for Mexico to try to improve the working conditions and legalize the residential status of Mexicans in the States. It would put them in a better position to send money home, and also to maintain their ties to Mexico by traveling back and forth, as opposed to being stuck in the U.S. because it's too dangerous to cross the border again.

Fox is facing a tough time passing his reform agenda through a hostile legislature. Does the ‘special relationship' he's cultivating with President Bush counteract his domestic political weakness?

He's certainly betting on that. In the way of hard results domestically, Fox doesn't have a lot to show. But if he's able to return from the U.S. claiming that he's won a new policy, or at least a promise from Bush to go to Congress with some policy changes, that would be counted as a concrete achievement for Mexico's citizens.

But the Mexican public won't be impressed simply by purely symbolic gestures. Despite the obviously warm relationship between the two presidents on show yesterday, one of Mexico's major dailies today lead with the headline "Hunt for Accords Begins Without Success." This is not an unsophisticated public.

Presumably, though, because Fox is trying to open up Mexico's economy, the U.S. has a strong interest in seeing him succeed, and will want to do what it can to support him…

It's certainly in the U.S. interest to help Mexico, and Fox specifically, because a stronger Mexican economy expands opportunities for U.S. trade and investment, and also because people are less likely to emigrate if there are jobs at home. But the U.S. economic downturn has left Mexico facing a recession, and that has hampered both Fox's reform program and the ability of the U.S. to help him.

Everything seemed possible when the Mexican economy was rocking along at 7 percent growth, creating jobs and spending power, and giving people a sense that they could improve their station in life. But the reverse is also true. With Mexico basically recessionary, everything looks worse. Jobs are being lost, and new ones are not being created. Investment is coming in, but its effects are not widely felt. All of this puts a lot more pressure on a president who has promised fundamental change and redistribution of wealth and better opportunities for everyone. His major challenge is to find a way of delivering on his promises during a downturn.

What can Fox do for Bush politically?

Some commentators suggest the relationship can help Bush win more Hispanic voters, because Mexican Americans are the biggest component of the Latino population. But it's not the only part, and it's easy to imagine that other Latino immigrant communities are going to be less than thrilled if the Mexicans get a sudden advantage. The gamble may be that Bush will win respect among Latino voters for his efforts to acknowledge that on the immigration front, Mexico and the U.S. are converging economically and socially. But there may be Republican voters who don't like the idea of changing the immigration laws to favor Mexicans at a time when people in the U.S. are worried about their jobs. If we were in an economic boom it wouldn't matter as much, but the economic downturn changes everything for both sides.