The Western Hemisphere Energy Workshops
Author’s note: This is part 3 of 3
The proponents of the common market scheme knew of México’s continued resistance to the common market plan. They softened up the approach towards México by moving away from the loss of sovereignty issue to a more palatable agreement of sharing resources, including financial assistance and private investment. Private investment was something that the Mexican government was after.
As for the Kenneth Hill scheme, the Mexican government referred to it as a sophisticated “Kissingerian” scheme concocted by think tanks, like the Rand Corporation, to control the Mexican oil reserves.
In 1978 and again 1979, several conferences were held in McLean, Virginia, Bogota, Colombia and in Japan. The purpose of Western Hemisphere Energy Workshops was to develop a policy of “supranational energy” policies for the western hemisphere.
The conferences advocated for countries, like México, to give up control over their energy supplies to a global cabal that would manage it for them.
Meanwhile, the New York Council on Foreign Relations had been peddling the British goal of creating an energy bloc in North American to curtail the threat of Arab and Soviet threats over energy resources. The so-called Project 1980s, envisioned the pooling of the energy resources of Canada, México and the United States. The project dovetailed perfectly into the Blyth, Eastman, Dillon & Co. report.
Britain was attempting to fulfill its goal of an energy alliance through three avenues. One was to use the “nuclear-free zone” plan that México, through the Treaty of Tlatelolco, had undertaken a lead on to lynchpin energy policy as an integrated part of the plan to keep nuclear weapons out of Latin America. The other strategy was to negotiate case-by-case energy pacts with Canada and México. This strategy was preferred by both Canada and México.
The third option was the one preferred by Britain. It called for the formation of a common market between Canada, México and the United States. It is exactly what the Blyth, Eastman, Dillon & Co. report had envisioned.
Ronald Reagan Embarks on NAFTA
On November 13, 1979, Ronald Reagan invoked the North American accord as a major plank to his presidential ambitions. The language came directly from the Blyth, Eastman, Dillon & Co. report. Reagan promised that if he was elected he would open trade and borders between Canada, México and the United States.
Reagan had embraced the common market strategy.
Under Reagan, the path towards the North American Free Trade Agreement (NAFTA) was launched. Initially, it embraced the Blyth, Eastman, Dillon & Co. report concept of border-free commerce and people. However, the goal of the scheme was to gain control of the Canadian and Mexican energy resources under a United States security umbrella. México was expected to open its energy sector as well as its production sector while relinquishing control over its currency. In return, México would gain access to trade with the United States and an open border for its citizens to work freely and legally in Canada and the United States.
What the drivers of the Blyth, Eastman, Dillon & Co. report did not anticipate was the Harvard technocrats, led by Carlos Salinas de Gortari, who took the idea of the North American common market and molded it into the neoliberalism-led economic policy of multiple free trade agreements that México embarked upon as NAFTA took shape. By opening its market to as many countries as possible and keeping the energy sector under Mexican control, the original goal of the common market did not make it into the NAFTA agreement, but neither did the goal of open borders.
NAFTA created the common market that the Blyth, Eastman, Dillon & Co. had proposed but with México retaining dominance over its currency. Although NAFTA did include open borders for certain professionals like doctors and lawyers, it did not open the borders for people. People were put on the backburner due mostly to U.S. union lobbying efforts to keep Mexican workers out of the United States and Mexico’s unwillingness to give up control over its oil and currency.
The open border dream was kept alive, however. As late as 2004, Mexican president Vicente Fox pushed forth the idea of the free-flow of people between México and the United States. George W. Bush, by many accounts, was open to liberalizing the borders for people, although not completely opening the borders. George W. Bush had initially signaled to the Mexican government that he would undertake an agenda of substantial immigration reform.
However, Bush’s invasion of Iraq opened old-wounds in U.S.-México relations. As México’s economy grew from its industrialization efforts, it started to assert itself on the international front. Although a founding member of the United Nations, and a significant contributor to its budget over the years, México had kept itself out of the foreign affairs of other nations. As México’s economy grew, so did its ambition to involve itself on global affairs.
The United Nations, in addition to the five permanent members on the Security Council, keeps a rotating elected membership of ten additional countries. México has been elected to the UN Security Council four times, with 2002-2003 cycle being its third.
During the third-cycle, the Mexican government, under Fox, refused to support Bush’s attack on Iraq through the United Nations Security Council, even though the Bush administration put much pressure on Fox. There is much debate as to the legality of George W. Bush’s invasion of Iraq with much if it driven by the lack of a UN resolution specifically authorizing the invasion.
In his book, Revolution of Hope: The Life, Faith, and Dreams of a Mexican President, Vicente Fox writes that the failure to pass immigration reform was Bush’s unforgiven anger towards Fox for not supporting the invasion of Iraq at the United Nations.
Donald Trump Destroyed the Trust
Although México strengthened its sovereignty and economy, it was nonetheless still fully dependent on the goodwill of the United States for its future. Although México kept sovereignty over its currency, the Mexican Peso is irrevocably tied to the U.S. dollar. The Mexican oil industry helped the United States through the Cold War, it nonetheless was mostly kept under the control of the Mexican state. México kept its energy resources strictly under Mexican control even after NAFTA was implemented.
However, the vast Mexican oil resources dwindled much faster than anticipated because of various factors, among them increased consumption because of the significant economic growth of the NAFTA economy.
Today, oil is México’s sixth-largest export, after manufactured products such as automobiles and computers. The Blyth, Eastman, Dillon & Co. report envisioned a subservient México under NAFTA. In some ways, México continues to be dominated by the goliath to the north as 80% of its exports go to the United States. However, the neoliberalism policies that México adopted has given it the tools to limit unfettered Yankee imperialism.
This brings us back full circle to today. Donald Trump wants to close off access for Mexican products to the U.S. market. At the same time, the Enrique Peña Nieto administration has begun to open the Mexican energy sector to foreign investment, much to the chagrin of the Mexican populace.
The energy sector is different now. The Mexican oil reserves are no longer México’s major export and the supply has steadily declined. Although México exports almost 80% of its products to the United States, the number of free trade agreements it has with other countries has given it considerable leverage.
More importantly, immigration from México to the United States has been declining since 2009 as higher wages and better job access keeps Mexicans from immigrating to the United States. (Pew Research, 2016) The Soviet Union ceased to exist in 1991 and OPEC has been marginalized by Saudi Arabia’s and other Arab nation’s dependence on U.S. protection from radical Islamic terrorism and new technology, such as shale gas, giving the U.S. better access to domestic energy supplies.
The only goal from the Blyth, Eastman, Dillon & Co. report that México relies on is the “security umbrella” it never wanted nor pursued officially.
México slowly and carefully began to move away from the Yankee imperialism fear by placing more trust in a U.S. political system that started to accept México as an equal neighbor. The proof of moving away from the fear of Yankee imperialism lies in Mexico’s military starting to integrate its military into the United States’ security umbrella.
When the time to address the impending retirement of the F5 Tiger fleet came about, the Mexican Army looked to replace them with offerings from various countries. Among them were Russian fighters. The United States F16 was seriously considered by the Mexican military. Economic necessities and the opening of trust between the U.S. and Mexican militaries allowed México to retire its interceptor force without replacing them. It took decades to get to this point and only the election of Donald Trump to bring back the fears of Yankee imperialists that those that voiced caution against U.S.-México integration continuously feared.
In the end, the Blyth, Eastman, Dillon & Co. created a stronger México better equipped to deal against Yankee imperialism and the likes of Donald Trump.