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April 2023, Volume 29, Number 2

Canada, Mexico

Almost 40,000 migrants illegally entered Canada from the US in 2022. Many migrants take buses from New York to Plattsburgh, and taxis to Roxham Road in upstate New York to cross into Quebec, where they are arrested, released and given work permits and access to social benefits.

A 2004 safe third country agreement between Canada and the US requires asylum seekers to seek asylum in the first country they reach. The 2004 agreement applies to migrants who enter Canada at ports of entry but not to illegal entrants from the US. A March 2023 agreement allows Canada to return migrants who enter illegally from the US to be returned to the US. Canada will also admit 15,000 Latin American refugees a year.

Advocates in Canada filed suit against returning migrants to the US, arguing that the US is not a safe third country; that case is pending.

Canada’s population rose by a million or 2.7 percent to almost 40 million in 2022, mostly due to net migration. Some 437,000 immigrants and 608,000 non-immigrant students, guest workers, and other foreigners were admitted in 2022.

Canada was rocked by revelations in winter 2023 that China tried to influence federal elections in 2019 and 2021 by ordering Chinese students to campaign for particular candidates in Liberal party nominating contests and expecting the winning MPs to be sympathetic to China. Up to 10 Liberal MPs may owe their victories to Chinese influence, and most have been sympathetic to China in their votes.

Canada produces most of the world’s maple syrup, a record 17 million gallons in 2022, which was a 50 percent increase from 2021.

Mexico. Dozens of migrants awaiting deportation died in a fire they set to protest conditions in their National Migration Institute accommodations in Ciudad Juárez in March 2023. The migrants were picked up by NMI agents on the streets of the city and guards did not unlock the cells with burning mattresses. Many migrants are waiting in Mexican border cities for the May 11, 2023 end of Title 42, which allows the US to return migrants to Mexico without allowing them to apply for asylum.

Mexico’s labor force of 60 million in 2023 included 26 million workers in formal jobs, 32 million in informal jobs, and two million unemployed. Mexico’s minimum wage is 207 pesos ($11) a day in most of the country in 2023, and 312 pesos ($16.50) near the US border.

Mexico’s economy expanded by three percent in 2022 due to booming exports of industrial and agricultural goods; growth is expected to shrink to two percent in 2023.

Mexico attracted $35 billion in FDI in 2022, including a third in manufacturing. Many Chinese manufacturers are joining Japanese and Korean firms in northern Mexico so they can ship their goods duty-free to the US market. The border state of Nuevo León has received $7 billion in FDI since 2021, including a third from China, as furniture and auto parts manufacturers move operations from China. Mexican workers are becoming more demanding, expecting wages above the minimum and transportation to and from work as well as meals.

Mexico and the US continue to struggle with the flow of drugs into the US, especially fentanyl. The efforts of three Mexican presidents and $3 billion in US aid over the past 15 years have not slowed the flow of drugs or cartel violence. One reason may be corruption; Genaro Garciá Luna, Mexico’s former top security official, was found guilty of taking money from drug cartels to facilitate trafficking in February 2023.

Mexican exported autos worth $35 billion to the US, plus parts and trucks.

Mexico-US farm trade was $73 billion in 2022. Mexico exported $44 billion worth of farm commodities to the US, while the US exported $29 billion worth of farm commodities to Mexico, giving the US a farm trade deficit of $15 billion. Among Mexican farm exports, beer and tequila were each worth $5 billion, followed by avocados $2.9 billion, strawberries and blueberries, $2.5 billion, and bell peppers, $1.4 billion.

The OECD expects 12 million tons of avocados to be produced in 2030, including four million tons that are exported. Mexico is expected to account for two-thirds of global avocado exports. By 2030, avocados are expected to surpass pineapples and mangos as the most traded fruit.

The US in March 2023 formally requested consultations with Mexico under the USMCA over Mexican plans to ban the import of genetically modified corn for human consumption. Mexico produced 27 million tons of non-GMO corn in 2022 and imported 20 million tons of GMO corn from the US in 2021-22, most of which is used to feed animals.

Mexican President Lopez-Obrador in February 2023 enacted legislation to reduce the budget and power of the National Electoral Institute (INE), the independent election watchdog credited with ending the dominance of the PRI and allowing the PAN to win the presidency in 2000. AMLO narrowly lost the election in 2006, and blamed the NEI, so reducing its power has been a long-term goal.

Documents show that AMLO continued to allow the armed forces to spy on government critics using Israeli-developed Pegasus spyware to infect the cellphones of journalists and lawyers; AMLO promised to end such spying in 2018.

Haiti. Haiti slid toward chaos in spring 2023. The country of 11.5 million has a PM appointed after the elected PM was assassinated in July 2021. Gangs linked to rival elites control the capital of Port-au-Prince, and up to half of Haitians do not have enough food. The PM has asked for foreign troops to restore order.

Haitians fleeing to neighboring Dominican Republic, the Bahamas or the US are often returned to Haiti. The US will allow some Haitians with financial sponsors in the US to seek asylum in the US.

Central America. VP Kamala Harris in February 2023 announced that private firms via the Partnership for Central America had pledged an additional $1 billion in investments in Guatemala, Honduras and El Salvador that would create jobs and deter unauthorized migration to the US. Most observers believe that such efforts, if successful, will require up to a decade to show results.

South America. Peru, a country of 33 million including a third in metro Lima, was rocked by protests in January-February 2023 after President Pedro Castillo was impeached in December 2022 when he tried to dissolve Congress and rule by decree. Peru will likely have early elections to elect a new president, but the political fragmentation exemplified by over a dozen candidates may once again present Peruvians with a choice between the top two vote getters who may each have less than 20 percent support.

Castillo’s mostly rural and indigenous supporters believe that the country’s elite disdains them, and their protests shut down the economy in southern Peru by blocking highways that lead to mines and other facilities. Machu Picchu, Peru’s most popular tourist destination, closed in January 2023, leading to 20,000 layoffs. Farmers who export fresh fruit warned of losses as protestors closed roads, and the government says the protests have led to over a million layoffs.

Alberto Fujimori won the Peruvian presidency in 1990, dissolved Congress in 1992, and won approval of a new constitution in 1993 that allows Congress to remove the president and the president to dissolve Congress. There were 18 candidates for the presidency in 2021, and none received more than 20 percent of the vote in the first round of voting; Castillo won a narrow victory in a run-off against Keiko Fujimori.

With US support, Colombia has been granting Venezuelans 10-year permits since 2021 that allow them to live and work legally; some two million were issued during the program’s first two years. Most of the seven million Venezuelans emigres since 2015 moved to Colombia, Peru and Ecuador, but more have been coming to the US, almost 190,000 in FY22, because the US does not return them to Venezuela. However, many of those with work permits still dream of moving to the US for higher wages and more opportunity.

Meanwhile, Venezuela has become one of the world’s most unequal countries. Currency depreciation and inflation wiped out the savings of the middle class, but the elite with access to US dollars is doing well by smuggling food and gas into the country. Venezuelans are scheduled to vote in presidential elections in 2024; the last election was in 2018.

Brazil’s richest person, Jorge Paulo Lemann, teamed up with 3G Capital to buy multinationals from Anheuser-Busch and Burger King to Tim Hortons and SABMiller, and made profits by cutting costs. However, when Lemann ran out of firms to buy and squeeze, profits fell, leading to the first of what may be more bankruptcies, as with the collapse of the 1,700 store Brazilian Americans chain in January 2023.

Average per capita income in Latin America as a share of per capita income in the Group of Seven (G7) rich countries fell from over 40 percent in 1980 to 30 percent in 2020. By contrast, per capita income in China rose from five to 35 percent of the G7 average over the past four decades following a manufacturing for export model. China has almost 20 percent of its workforce employed in manufacturing, while most Latin American countries have fewer than 10 percent of workers employed in manufacturing (Mexico 15 percent).

What could close the income gap? Instead of agriculture or manufacturing, countries may have to focus on raising productivity in services, where a rising share of their workers are employed. However, with the exception of call centers and other back-office functions, there are few examples of services-for-export creating large numbers of high-wage jobs in developing countries.

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