North America: the cage of the Mexican economy
North America: the cage of the Mexican economy
Diego Martín Velázquez Caballero
Why can't Mexico get off the American train? The favorite narrative of Mexican nationalism is as predictable as it is harmful.
Every time tensions with Washington escalate, the inner circle of invisible power—those corporate and political elites who operate to maintain Mexico as a modern version of the Habsburg Model—pulls out the worn-out script of diversification.
They tell us, with a flippancy bordering on irresponsibility, that the solution is to look toward Beijing or Moscow; that, supposedly being one of the world's leading economies, we possess the strength to emancipate ourselves from the American production chain and access the global market autonomously.
It's madness.
A populist fantasy designed for domestic consumption that clashes head-on with the country's arithmetic and social reality.
If Mexico truly possessed that economic capacity and structural strength, it wouldn't exhibit the glaring inequalities that fracture the country, nor would it depend on the systematic expulsion of its own people to keep domestic consumption afloat.
The truth is harsher and less glamorous: Mexico has voluntarily chained itself to the United States, and today, it is the only path left to avoid collapse.
It is necessary to scrutinize the figures of self-deception with objective data.
The myth of self-sufficiency crumbles when one observes the phenomenon of migration and its real impact.
It is true that demagogues on both sides of the border often distort the variables: there are not 60 million undocumented immigrants in the United States; the total population of Mexican origin is around 38 million, of whom approximately 5 million lack legal status.
However, reducing the problem to a discussion of visas is to ignore the depth of the tragedy.
The real tragedy is not the legal status in the north, but the economic prostration in the south. Remittances are not a macroeconomic achievement to boast about on official platforms; they are the barometer of the Mexican state's failure. In rural communities across the vast majority of the country's states, dependence is absolute: in the most vulnerable segments of the rural population, practically one in three households survives thanks to the dollars earned in the fields of California, the kitchens of New York, or the construction industry in Texas.
The Mexican economic model functions, in essence, like a gigantic Porfirian-era hacienda for human exports.
The inner circle of power prefers to maintain this status quo because migration acts as the great social safety valve.
It allows for the merciless exploitation of the indigenous and mestizo population, denying them decent wages, security, and local opportunities, knowing that the surplus labor will ultimately finance social peace from abroad.
Remittances are, paradoxically, the subsidy that workers in the U.S. pay to the Mexican elite so that nothing changes.
It is the perfect mechanism for perpetuating inequality without triggering a revolution.
To think that China or Russia will replace this symbiosis is to misunderstand how geography and the global economy work.
Mexico is not an autonomous middle power; it is a critical, but subordinate, link in the North American market.
Eighty percent of its exports go north.
Its infrastructure, value chains, and legal treaties are all intertwined with the North American ecosystem.
Flirting with extra-hemispheric autocratic powers is not a strategy; it is geopolitical suicide that Washington will not tolerate and that the markets will punish immediately.
The alternative to deep integration is not sovereignty; it is chaos: a genuinely closed border and a massive return of capital and people.
Without the safety valve of migration and with stagnant binational trade, the Mexican social fabric would tear apart in a matter of weeks.
That void wouldn't be filled by the State; it would be filled by drug trafficking and organized crime, which already control entire fiefdoms of the national territory.
We would go from being an integrated economy to a large-scale failed state, a hacienda set ablaze by its own demons.
Robert Pastor was right, and it's time for the Mexican inner circle to accept it without the national complexes of the 19th century: Mexico's future lies not in utopian emancipation, but in the acceleration and democratization of North American integration.
It is necessary to move from maquiladoras and the export of cheap labor to a true economic community with clear rules, social cohesion funds that close infrastructure gaps, and realistic binational migration policies.
Mexico will not find its salvation in the Silk Road nor in the delusions of grandeur of a paper sovereignty.
Our destiny is inextricably tied to the north. To deny this is not patriotism; it is complicity with backwardness.
The great mistake of the Salinas technocracy was assuming that the success of the first Mexico would automatically pull the second along. It didn't.
North American subsidies (via remittances and export demand) are the only thing preventing internal inequality from triggering a violent social explosion.
Mexico is condemned to North American integration because geography is destiny.
Any attempt at emancipation toward Eurasian powers is not sovereignty; it is a discursive charade to keep the country's radical base happy while, behind the scenes, trade agreements with Washington continue to be signed.
The American train is the only one that passes through our station; getting off it is not an option, it is the abyss.
While the ideologues of the so-called Fourth Transformation theorize in universities about the discovery of China, joining the BRICS, and a budding romance with the Russia-Beijing axis, the real economy reminds us that Mexico has no room to maneuver.
It's not a question of sovereignty; it's a condition of strict and absolute dependence.
Data from the Bank of Mexico dismantles any narrative of diversification.
At the end of last year, Mexican exports reached a record high, but 83% of those shipments had a single destination: the United States.
To pretend that Mexico can flirt with a geopolitical alliance with China while ignoring the USMCA is to misunderstand the basic rules of global trade. If the Asian Dragon has any place in the Mexican value chain, it will only be under the strict rules of origin dictated by Washington.
Anything else is just rhetoric for the consumption of the party faithful.
In the classic Arabian tale "The Tale of the Two Who Dreamed" from One Thousand and One Nights, a man travels to distant lands in search of treasure, only to discover that the wealth was always buried in his own backyard.
Mexican populist progressivism makes the same mistake, but in reverse: it seeks a utopia of development in China's totalitarian state, when the reality of our survival is knocking on the door of our northern neighbor.
The true engine of social stability in Mexico is not government assistance programs, but the small, everyday money that sustains the fabric of the most forgotten communities.
The flow of remittances is the true buffer against poverty, directly supporting one in three households in the country.
If the Donald Trump administration were to carry out its threats, the socioeconomic collapse of the states with the longest history of emigration would be unprecedented.
The dilemma of Mexican foreign policy allows for neither ambiguity nor calculated silence.
Continuing to fuel the falsehood of populist sovereignty, while drug trafficking and institutional corruption spread unchecked, is playing with fire.
Neither China, nor Russia, nor the BRICS have sent a single screw to turn Mexico into the Ukraine of North America.
Alignment with North America is not a moral capitulation; it is the only viable path to guarantee economic viability and improve the social conditions of the population.
This disconnect between aspirations for self-sufficiency and productive reality is also evident at the local level.
In the state of Puebla—home to the Puebla Group—for example, institutional efforts to boost competitiveness, such as the development of the new CU2 complex at the Benemérita Universidad Autónoma de Puebla (BUAP), focused on engineering and exact sciences, the development of the Olinea vehicle, and the Ciudad Audi automotive cluster, illustrate a profound structural challenge.
While these initiatives are born with the legitimate purpose of spurring innovation, in practice they face serious implementation difficulties, plagued by bureaucratic problems, a lack of effective connection with the formal labor market, and accusations of patronage that limit their real social impact.
In contrast to the rigorous industrial and educational planning that characterizes Asian powers, local projects in Mexico often lack the ecosystem of legal certainty and transparency necessary to increase regional productivity.
Would the Beijing politburo allow such a waste of resources and talent on its own soil? Of course not.
The only thing that saves Mexico from its tremendous planned inefficiency is the United States.
Economic vulnerability is exacerbated by the imminent review of the USMCA.
This process will not be a mere formality; Washington is coming to the negotiating table with a markedly protectionist stance, demanding stricter labor oversight mechanisms, even more restrictive industrial rules of origin, and review clauses that reduce long-term certainty for investments.
For Mexico, any neglect at this negotiating table or a potential collapse of the trade agreement would imply a paralysis in the balance of payments that the formal economy could not withstand for more than a year.
Mexico finds itself at a crossroads where economic dependence on the United States is not an ideological choice, but a condition of survival imposed by the very realities of its geography, economy, and social stability.
The key to understanding this situation can be simplified with a simple analogy, like that of the apples, sticks, and balls, which brutally reveals the vulnerabilities we face.
Imagine that Mexico produces ten apples to sell on the global market.
The reality is that eight of those apples are consumed by our neighbor to the north, the United States.
The other two are distributed among Europe, Latin America, and other countries.
China barely buys a bite of one apple.
This means that if the United States decides to close the door or impose high tariffs on our exports, Mexico will be left with eight apples rotting in its yard, without a nearby buyer or enough money to absorb all of our production.
China, for its part, won't cross the Pacific Ocean to buy those apples, since it produces its own cheaper fruit and has a domestic market that satisfies its needs.
The Mexican economy is closely linked to that of its northern neighbor, and this dependence isn't a matter of patriotism, but of economic logic: no one else has the proximity, the size, or the purchasing power to sustain our production.
The second element of this relationship is the support that props up our budget.
In a rural community, the table that represents the economy of many families in Guerrero, Oaxaca, or Michoacán is held up by three pillars: what they grow, government social programs, and remittances sent from the United States.
The reality is that if remittance income is eliminated, social stability collapses, because that money is crucial for people to be able to eat, pay for medicine, or maintain their homes.
Social programs, while valuable, are not enough to cover all basic needs.
Most of the country's income comes from the wages of those who work in the United States.
Without that source, millions would fall into abject poverty within weeks.
The third element is the network of organized crime, which controls a large part of Mexican territory.
The legal economy, with its factories and maquiladoras (assembly plants), can only be sustained if the United States keeps its market open, if the factories continue operating, and if remittances arrive without interruption.
If the U.S. economy shuts down, those factories close, and unemployed young people become easy prey for drug trafficking, which offers a quick and dangerous escape.
This dependence creates a vacuum that organized crime is ready to fill, delivering the country into chaos and lawlessness.
Photo EFE
These three elements demonstrate that Mexico's economy is in a kind of cage from which it cannot escape without facing almost certain collapse.
The United States economy is about twenty times larger than Mexico's, and in a scenario of rupture, Mexico could not sustain itself on its own.
China, which has a huge trade surplus with Mexico, will not act as a lifeline; its interest is in selling, not subsidizing.
The border with the United States, which sees over two billion dollars in daily trade, would be a wall that would halt all of Mexico's productive capacity.
The idea of absolute sovereignty, without integration with North America, is a dangerous illusion.
Mexico is an appendage of the United States; for our country, attempting to separate would be tantamount to death.
