Anxieties Without Borders:The United States, Europe And Their Southern Neighbors

May 2005 - If the last half of the 20th century was shaped largely by east-west relations, will the first decades of the 21st century be defined along north-south lines? Europe and the United States are increasingly affected, as societies, by developments on their southern peripheries – the southern Mediterranean states of North Africa and the Middle East in the case of Europe, Mexico, Central America and the Caribbean in the case of the U.S. Journalists, analysts and policymakers point to analogies between the Mediterranean and the Rio Grande, and the list of policy challenges – migration, trade and investment, transnational security issues, and questions of culture and identity – is outwardly similar.

Beyond broad analogies, American and European approaches to their southern neighbors, are asymmetrical in key respects, driven by changing ideas about identity and security, and the conduct of foreign policy on both sides of the Atlantic. Moreover, both Europe and the U.S. have a stake – probably more pronounced in the case of the U.S. – in the evolution of the more distant "south" across the Atlantic.


THE WEST'S "NEAR ABROADS"

2005 is the tenth anniversary of the establishment of the Euro-Mediterranean Partnership – the Barcelona Process – linking the European Union with partners in North Africa and the Middle East. The North American Free Trade Agreement linking Canada, Mexico and the U.S., entered into force in 1994. So, in a rough sense, there has been a decade of formal north-south experience on both sides of the Atlantic. In Euro-Mediterranean as well as North American relations, there is now a mood of reflection and reassessment, and an ever-closer linkage between north-south relations and domestic concerns.

Europe and the United States appear to face similar challenges in their relations with the relatively poor and insecure societies to their south. The European Union's engagement with the south is arguably the leading area for Europe's foreign and security policy involvement. The countries of North Africa and the Levant are firmly within the EU's orbit, politically and, above all, economically. Europe may be a relatively weak global actor, but in the Mediterranean, Europe is a "full service" actor, capable of playing an active role across a range of issues, including security. The December 2004 European Council decision to open formal accession negotiations with Turkey in October 2005, however hedged and conditional, will only sharpen the debate on these questions in the years ahead. The French and Dutch "no" votes on the European constitution, and the prevailing mood of uncertainty within the EU, are unlikely to alter Europe's stake in developments across the Mediterranean, although it might well alter the pace of European engagement with southern neighbors.

The American stake in developments to the south, above all in Mexico, is no less pronounced. But in contrast to the situation across the Atlantic, the prominence of north-south issues, especially migration, has not produced a consistent policy of engagement with Mexico or with Latin America as a whole. In contrast to the Barcelona Process, NAFTA and CAFTA are narrower in scope, and focused almost entirely on trade and investment. Transnational challenges may loom large in the American policy debate on a regional basis – in the key border states of California and Texas, and in Florida, but the center of gravity of Washington's foreign and security policy is to be found elsewhere -- in Europe, the Middle East and increasingly, Asia.


DIFFERENT APPROACHES TO INTEGRATION

The principal institutional frameworks for north-south relations – the Barcelona Process and NAFTA – are now roughly ten years old. They represent strikingly different approaches to the challenges of economic integration, development and north-south relations. Both processes are widely seen as valuable, but troubled. They have also had very different regional implications, with NAFTA spurring other important integration efforts in Latin America. The Barcelona process has had little effect of this kind, within the Middle East and Africa (where the EU already has longstanding agreements on trade and political dialogue), or on a sub-regional basis, in the Maghreb and the Levant. NAFTA, as a North American initiative, has a very important U.S.-Canada economic dimension, more akin to single-market aims within the EU itself than to integrative efforts across the Mediterranean. Above all, Barcelona aims at broad, political, cultural and economic engagement, whereas NAFTA and related initiatives are firmly focused on trade.

For Europe, Turkey is a key part of this equation, part of the Barcelona process, but also part of the process of formal EU enlargement. Indeed, over the last few years, the lines between Europe's engagement with non-members in the south and its own enlargement process have become less clear. The trend is toward the development of an overall EU strategy toward those areas on the periphery that remain outside current enlargement plans, whether in North Africa and the Middle East, or in Eurasia. The evolution of this wider neighborhood policy will have important implications for longstanding relations with southern Mediterranean countries, with the possibility that the Barcelona framework will eventually be subsumed within a larger engagement strategy for the entire EU periphery. This trend toward ever-wider frameworks for external economic and political relations has no real parallel in U.S. policy, beyond the interest in negotiating new regional and bilateral trade agreements – CAFTA, and the elusive Free Trade Agreement for the Americas (FTAA).

The political-economy of north-south relations in the two hemispheres shares some broad characteristics. But within this transatlantic tale of haves and have-nots there are also marked differences.

First, there is a difference in scale. The total volume of trade between the U.S. and Mexico (plus the CAFTA countries) is much larger than that between the EU and its MEDA partners. In 2002, EU imports from the southern Mediterranean including Turkey totaled 65 billion euros; southern Mediterranean imports from the EU were some 80 billion euros. In the same period, U.S. exports to Mexico alone totaled $97.5 billion, with Mexican exports to the U.S. at $137 billion. Two-way trade between the U.S. and CAFTA in 2002 was roughly $32 billion. Both regions have experienced a substantial increase in north-south trade over the past decade.

Second, trade balances differ significantly in the two settings. While the trade balance between the U.S. and Mexico favors the south (the same is true for CAFTA), the EU-southern Mediterranean trade balance is strongly in the EU's favor, despite large-scale energy exports from North Africa. This disparity may go some way toward explaining persistent North African and Middle Eastern complaints about trade balances, and the hub and scope nature of Mediterranean trade – with Europe as the hub. NAFTA and the prospective CAFTA arrangement have gone much further in eliminating trade barriers than has been the case in the Euro-Mediterranean context. Barcelona envisions the creation of a regional free trade area by 2010, but is based on a series of individual association agreements with Brussels, with very uneven progress to date.

Third, similar asymmetries exist in the area of investment. EU policy toward the south has, in general, been more heavily oriented toward investment and project-related assistance than toward trade liberalization. As with trade, there are important differences in scale. American FDI in Mexico and Central America is much greater than that of the EU in the southern Mediterranean – an investment position totaling some $75 billion in 2000. By contrast, EU investment stocks in the MEDA economies totaled roughly 25 billion euros in 2000. In both areas, the bulk of FDI goes to only a handful of countries in the south. Mexico and Panama together account for about 95 percent of American FDI to the region. In the Mediterranean, Turkey, Israel and Cyprus (now an EU member) take some 75 percent of European investment, a situation likely to be reinforced by the prospective opening of formal accession talks between Ankara and Brussels.

The impediments to more extensive northern investment in the south are broadly similar on both sides of the Atlantic. There is a continuing perception of political and economic risk, pervasive corruption, and shortcomings in infrastructure, including the critical soft infrastructure for FDI – a favorable regulatory environment and predictable rule of law. These problems are especially pronounced in North Africa and the Middle East, where rates of foreign investment are among the lowest in the world. Mexico and Turkey also confront difficulties of this kind, but are both relatively developed economies, reasonably well-placed to attract and retain foreign investment. Looking at the Western Hemisphere, one lesson from the Turkish experience may be that narrow, trade-focused arrangements may not be sufficient to encourage large-scale investment, with substantial development effects in the south. A more comprehensive approach may be needed. But this approach also requires a high degree of confidence and interest on the part of southern partners. In the Mediterranean experience, Turkey is one of the few real success stories. Morocco and Tunisia have made significant economic reforms, but the former has made unimpressive progress in terms of "human development," and the latter has made no progress in terms of political reform.

Fourth, development assistance differs substantially in the North and Central American and Mediterranean contexts, reflecting different priorities, and above all, different development philosophies. The transatlantic north has had a strong stake in promoting prosperity in the south to reduce migration pressures, and as a contribution to stability and security. This motive is imbedded in American debates over trade liberalization and investment promotion in the hemisphere, and has been an even more explicit part of the rationale and the structure of the Barcelona Process.

Official development assistance, in the form of project-related grants, is a large component of EU engagement in the southern Mediterranean. There is no real equivalent to this in U.S. relations with Mexico and Central America. The EU's MEDA program has consistently allocated roughly one billion euros per year to economic assistance across the Mediterranean. This is, of course, a fraction of EU assistance devoted to economic development in central and eastern Europe over the past decade. In relations with Mexico and Central America, as elsewhere, American assistance is dominated by the activities of non-governmental organizations and the private sector. Large-scale cohesion assistance on the EU model is not, and is unlikely to be a dominant feature of north-south relations in the Western Hemisphere.

On issues of trade, investment and assistance, there is a tendency to treat north-south relations in the two hemispheres as separate questions, and as separate areas of engagement for Europe and North America. In reality, there are many cross-cutting interests and interactions. The American interest in political, economic, and above all, security engagement across the broader Middle East, including the Mediterranean, is an obvious example. But there are also important examples of European engagement to America's south. Europe devotes roughly twice as much official economic aid to North Africa and the Middle East than to Latin America as a whole. But Spain itself provides over six times more aid to Latin America than to Mediterranean recipients in its own neighborhood, and European businesses are leading investors across Latin America. Fifth, north-south relations in both hemispheres are characterized by increasingly active energy trade. The bulk of America's energy imports come from western hemisphere sources, from Canada, Mexico and Venezuela – a fact frequently overlooked in discussions about energy security. For Europe, and especially for Southern Europe, North Africa and the Middle East are overwhelmingly important sources of supply. The expansion in European imports of natural gas from North Africa, and increasingly from Central Asia via Turkey, has emerged as a structural dependency, and a standing economic security concern. Energy interdependence is set to remain a central feature of north-south relations in both regional settings.

Finally, cross-border remittances are a shared feature of north-south political economy, closely bound up with both immigration and regional development. 2003 World Bank estimates place Mexico's remittance income from the U.S. at roughly $10 billion per year. For countries such as Morocco and Tunisia, remittances from workers in Europe have long been a critical source of revenue, alongside tourism and agriculture. Remittances loom large even for energy producers such as Algeria and Libya. Turkey, with over 1.5 million nationals resident in Germany alone, many from less developed parts of the country, has a particularly strong stake in the remittance issue.

MIGRATION AND IDENTITY – THE SOUTH IN THE NORTH

The centrality of north-south relations to international policy on both sides of the Atlantic owes a great deal to migration trends, and related debates about identity and security. These concerns are not new, in either setting. But the post-September 11th climate and structural changes in northern societies have cast immigration issues in a new light. As in other areas, broad analogies regarding the movement of people across the Mediterranean and the Rio Grande do not tell the full story.

Over the last decade, in both hemispheres, there has been a substantial increase in the number of economic migrants from the south resident in the north. Ageing populations and structural changes in the European and North American economies have reinforced the "pull" as well as the "push" factors in the migration equation. Allowing for differences of scale, there are some broad parallels in terms of the percentage of persons of Mexican origin in the U.S and, for example, persons of North African origin in France – roughly ten percent in each case. Almost certainly, the true numbers are higher than the reported estimates in both cases, and regional concentration – in southern California, or in Marseille – while declining as migrants disperse, remains a factor in popular perception.

Migration, and perceptions of migration, are in flux on both sides of the Atlantic. More restrictive immigration policies and tighter border controls have led to a decrease in "circularity" in south-north migration. Traditionally, migrants from Mexico, as well as migrants from across the Mediterranean, have moved with relative ease across land and sea borders. In recent years, this pattern of circulation has become less common, and more risky. It has encouraged migrants and their families to remain in the north, pushing up the total numbers of illegal or undocumented residents. It has also led to a marked increase in the physical risks of migration, and the spread of criminal trafficking in migrants on the U.S.-Mexican border and at sea in the Mediterranean.

Migration from the south has become more diverse. Migrants in both settings, and especially in the Mediterranean, now come from further afield – Sub-Saharan Africa and Asia on the one hand, Central America on the other – with Mexico and North Africa serving as conduits for migration to northern societies. Southern migrants are also settling more widely. In the past, countries such as Spain and Greece were waypoints for migrants headed to richer parts of northern Europe. Today, migrants crossing the Mediterranean are just as likely to regard an increasingly prosperous southern Europe as a destination. In North America, Mexican and Central American migration is no longer a phenomenon limited to the southwest or Florida. Migration has lost much of its regional flavor, and is now a public policy issue at the national level on both sides of the Atlantic.

On both sides of the Atlantic, the question of migration has acquired a sharper cultural edge. This trend is most pronounced in Europe, where relations between Islam and the West are integral to the migration debate. These relations have become much more contentious in recent years, and have become a leading force on the political scene in Europe, with the rise of anti-immigrant movements across the continent. Migration from the Muslim south has spurred a vigorous, searching debate about questions of identity, integration and secularism. The effects are visible across a broad range of national and EU-level policies, from legislation on student headscarves in France, to the question of Turkey's place in the EU.

To be sure, there is an important – and possibly growing – cultural dimension to the American debate about migration, especially from Mexico. But on balance, the American immigration debate continues to be driven more strongly by traditional concerns over jobs, education and social welfare costs. In contrast to Europe, the ability of American society to assimilate and integrate migrants from the south is still widely accepted – perhaps the product of a more open society, and perhaps, greater mutual familiarity among societies in the Western Hemisphere.

The U.S. and Europe face the challenge of managing migration as a component of wider north-south policies. Different approaches have fallen short on both sides of the Atlantic. The Barcelona Process has aimed at a broad-gauge dialogue with southern partners, including the question of migration. Not surprisingly, there has been little consensus about whether to treat migration as an economic, developmental, cultural or security issue – it is, of course, all of these things, and all have proven difficult to address in multilateral terms. This is not just a problem of north-south dialogue. The EU itself continues to treat migration policy as a national question, although there is a growing tendency to harmonize national approaches. Europe's Schengen agreement has had the effect of shifting the responsibility for European border control to members on the southern periphery of the EU. This is not unlike the situation in the U.S., where states such as California, Texas and Florida bear the overwhelming burden of national border management.

In the Western Hemisphere, migration is the issue in Mexico-U.S. relations, and it continues to defy bilateral coordination. Mexico has pressed repeatedly in recent years for a broad, strategic dialogue with the U.S., including but not limited to migration matters. There is notably less enthusiasm for negotiation on migration issues in southern Mediterranean states. The Bush Administration has re-stated its interest in immigration policy reform, and has floated initiatives aimed at regularizing the status of migrants as a matter of domestic public policy. But no legislation along these lines has gone forward, and a bilateral, much less a multilateral approach to migration remains elusive.

On both sides of the Atlantic, there is now a growing gap between the perception of transnational challenges -- economic, cultural, and security -- flowing from migration, and the effectiveness of bilateral and multilateral cooperation on the issue with neighbors to the south. Migration is being addressed in tentative fashion as a matter of domestic rather than foreign policy – leaving a key facet of north-south relations in abeyance, and the potential for addressing a range of transnational problems unrealized.


THE SECURITY DIMENSION

For all of the focus on homeland security and border control in the U.S., on the whole, north-south relations are more thoroughly shaped by security considerations in the Euro-Mediterranean environment. The relative prominence of security issues in the Mediterranean reflects the severity of internal and external challenges across North Africa and the Middle East, and the spillovers – actual and potential -- of hard and soft security risks northward. North-south security challenges facing North America are of a very different and more diffuse kind. More accurately, the security challenges emanating from the south in the western Hemisphere, including drugs, people trafficking, organized crime and trans-national health and environmental risks, are also prominent in the Mediterranean. But in the Mediterranean, these problems are accompanied by a range of harder security challenges, from terrorism to proliferation.

September 11th led to a broad recasting of North American border and immigration issues in homeland security terms. Similarly, in Europe, immigration policies are increasingly shaped by internal security fears. The crisis in Algeria in the 1990s encouraged the growth of transnational extremist networks in Europe, and these have become a focus of special European concern in the wake of the Madrid bombings of March 11, 2004. The result has been a subtle convergence of outlooks on both sides of the Mediterranean, with policymakers in the north and the south focusing first and foremost on internal security. Drugs, too, are a persistent part of this security equation. Southern neighbors are the leading conduits for drug trafficking into Europe and North America, and the drug economy is an important element in the political economy of Mexico and Central America on the one hand, and Turkey and Morocco, on the other. The controversial American counter-drug and counter-insurgency assistance in Colombia (Plan Colombia), goes well beyond European efforts in North Africa, where sovereignty concerns inhibit any such direct involvement on the ground.

Interlocutors in Mexico and the Southern Mediterranean, focused on the need to reduce economic and social disparities between north and south, and sensitive to sovereignty issues, fear the distorting effects of a border-centric agenda in relations with their northern neighbors. But to the extent that border control and interdiction remain central issues for the north, leaderships in the south may come to view security as the only viable lever for engaging European and American policymakers in a broader strategic dialogue.

COMMON CHALLENGES, NEW OPPORTUNITIES

For societies on both sides of the Atlantic, north-south relations are increasingly shaped by cross-border interactions affecting domestic as well as external policy. On the whole, it is a tale of common problems, different responses, and new opportunities.

First, the challenge of migration from the south is similar in scale, if not in absolute numbers, on both sides of the Atlantic. The drivers of migration are broadly similar, and the phenomenon has given rise to very public debates and responses. Broadly, the American debate continues to focus, first and foremost, on economics, and only secondarily on questions of identity and security. By contrast, Europe's increasingly heated debate about immigration is, above all, about religion, culture and the threat of extremist violence. Despite September 11th, security, including security of identity, is a more prominent feature of north-south relations across the Mediterranean than across the Rio Grande. America's own debate about the "Hispanic challenge" remains more of an intellectual than a public obsession.

Government policies remain heavily focused on visas and interdiction, rather than the increasingly pressing question of integration. Everywhere, the humanitarian and security aspects of migration are becoming more urgent, and frequently these concerns are in tension.

Second, North American and European approaches to north-south dialogue and cooperation have taken different forms, and are headed in different directions. In the western hemisphere, regional initiatives such as NAFTA and CAFTA have focused almost entirely on trade liberalization as a vehicle for integration and development. The EU has taken a more sweeping, but not necessarily more successful approach to relations with the southern Mediterranean. Euro-Mediterranean relations are broader than their counterparts across the Atlantic – closer to "the whole enchilada" approach championed by Mexican officials, but consequently more complex and politicized. Measured in terms of mutual stakes and expectations, neither approach is working well. The only obvious success story in either hemisphere may be Europe's engagement with Turkey, which may or may not lead to EU membership over the next decade or two, but which has very effectively encouraged Turkish convergence with Europe.

Third, Europe and the U.S. have clear stakes in north-south relations outside their respective regions. What Europe does on its southern periphery, and the position of Muslim migrants in Europe, affects American interests on a global basis. Similarly, Europe has historic ties and practical stakes in the future of Mexico and Central America. At a broader level, political, financial, environmental and energy-related developments in the transatlantic "near abroad" can have global consequences, and will demand global management. A more concerted approach to problems emanating from the south can and should be a key facet of a revitalized transatlantic relationship.

Fourth, there are specific areas where lessons can be learned and new approaches implemented. Europe has substantial experience with the use of cohesion funds to foster development and integration, both within Europe and vis-à-vis Europe and the Mediterranean south. To the extent that U.S.-Mexico relations acquire a more comprehensive and intensive character, this experience will be highly relevant to North American leaders. Demographic trends on both sides of the Atlantic will compel policymakers to confront similar issues regarding the import of labor, the integration of transnational communities, and related health, education and social needs. The interest in "smart borders," is clearly shared, and at least in the case of the Mediterranean, European and American assets are available to pursue new maritime security initiatives.

Finally, north-south challenges in both hemispheres are felt first and foremost in the border regions of Europe and the U.S., in the countries of Southern Europe, and in the American West and South. Cities in these areas are particularly affected, and have a special role in policy responses. Over the next decade, the rise of north-south concerns should encourage new lines of collaboration between experts and policymakers – a transatlantic dialogue in which Lisbon and Los Angeles, Athens and Miami may have as much weight as Washington and Brussels.