Immigration

Why Immigration Reform Is Good for Mexico


U.S. President Barack Obama and Mexican President Enrique Pena Nieto take their seats for a bilateral meeting on May 2, 2013 at the
Palacio Nacional in Mexico City

Photograph by Mandel Ngan/AFP via Getty Images

U.S. President Barack Obama and Mexican President Enrique Pena Nieto take their seats for a bilateral meeting on May 2, 2013 at the Palacio Nacional in Mexico City

President Obama is in Mexico, where he’ll try to sell President Enrique Peña Nieto on the mutual economic benefits of the immigration reform overhaul Congress is tackling. But don’t expect Peña Nieto to get too involved in America’s immigration debate. While the Mexican government supports immigration reform—Peña Nieto said as much on a visit to the U.S. in November—he’s mostly staying on the sidelines.

The last time Mexico got involved in a U.S. immigration debate, things didn’t turn out well. That was in 2001, when newly elected President George W. Bush began an ambitious bilateral trade treaty with Mexico. As a former governor of a border state, Bush had longstanding ties with Mexico and was also a big proponent of immigration. The treaty would have created a common immigration policy between the countries, with an expanded guest worker program, improvements to the North American Free Trade Agreement (NAFTA), and even a provision to allow Mexican workers to transfer their pensions to U.S. banks. On Sept. 6, when Mexican President Vicente Fox addressed Congress about the treaty, he hailed “a new relationship, a more mature, full, and equitable relationship based on mutual trust.”

Five days later, the terrorist attacks occurred, and lawmakers were in no mood to open doors to more immigrants. Bush turned his attention toward domestic security and two wars. The treaty fell by the wayside. Things unraveled further when Mexico refused to support the Iraq war at the United Nations. By the time Bush resuscitated his domestic immigration reform effort, in 2006 and 2007, he didn’t consult Mexico.

Obama isn’t likely to face a tough job persuading the Mexicans that revising U.S. immigration rules will benefit both countries.

The U.S. is Mexico’s largest trading partner. Nearly half a trillion dollars in goods was traded between the two countries last year. Remittances—the parcels of money that Mexicans living abroad send home—account for about 2 percent of Mexico’s GDP. If a large portion of the estimated 6.5 million Mexicans living in the U.S. were to become citizens, their incomes would likely rise, and with it, their remittances, which totaled about $1.7 billion in 2012.

That money could go even further if remittances flowed through the traditional banking system, says Raúl Hinojosa, associate professor of Chicano/Chicana studies at the University of California Los Angeles. Mexican citizens could invest their remittance payments, earning interest and getting loans. Right now, remittances are cash payments routed through money transfer companies like Western Union and Vigo.

The economic benefits of citizenship extend well beyond remittances, says Demetrios Papademetriou, president of the Migration Policy Institute, a nonpartisan Washington think tank. Immigrants who receive amnesty would be able to invest more freely in cross-border businesses. They’d also be able travel freely, which means they’d be more likely to visit home more often, spending money there.

All of which makes U.S. immigration reform a good deal for Mexico, even if Mexicans aren’t shouting it from the rooftops.

Dwoskin is a staff writer for Bloomberg Businessweek in Washington. Follow her on Twitter: @lizzadwoskin.

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