Ambassador Volker: United State-Mexico Forum

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The Center for American Progress and the McCain Institute are hosting a discussion on U.S.-Mexico economic relations at Arizona State University. One of the presenters will be former U.S. Ambassador Kurt Volker, who is now head of the McCain Institute. He will appear on Arizona Horizon to discuss security issues and issues related to U.S.-Mexico economic ties.

Ted Simons: ASU's McCain institute and the center for American policy is hosting an upcoming forum on trade relations between the U.S. and Mexico. It's an important area of focus for the U.S. in general, and Arizona in particular, considering Mexico's increasing profile as a leader in manufacturing and energy sectors, along with the country's rising middle class. Here to talk about the status of the U.S- Mexico relations and other foreign policy concerns is Kurt Volker, who served as U.S. ambassador to NATO and is now executive director of the McCain institute. Thanks for joining us. The McCain institute hosting this forum, what is the McCain Institute?

Kurt Volker: It's the part of Arizona State University, we've been around for about two years. It comes as an outgrowth of senator McCain and Mrs. McCain wanting after the 2008 election to invest in an institute that would promote character driven global leadership. So they went to Arizona State and said, would you be the institutional home for that kind of institute? And we've been working with Arizona state, with senator McCain's blessing and building a new kind of policy institute in Washington with the footprint in Arizona.

Ted Simons: A new kind of policy institute, how does it change?

Kurt Volker: We think in Washington as a think tank, a lot of senior staff, you might have a conference from time to time. We're trying to function as a do tank. Pick issue and figure out how to make a difference on the way those issues play out. Great example is work we've done on human trafficking in Arizona. Where we saw this year new legislation passed, a strengthening of law enforcement tools, more support for victims in Arizona. Another example, we're going to be working on elections in the Congo in the coming year where they're going to have provincial elections there for the first time and we're going to be trouble-shooting the process to make sure it comes off OK. And our next generation leaders program. We look for emerging leaders, bring them to the U.S. for a year, give them training and ethics, values, leadership, and try to help them be agents for positive change in their home countries.

Ted Simons: And we've got this forum regarding U.S.- Mexico trade relations. This is tomorrow?

Kurt Volker: Tomorrow here at the Cronkite School, it's open to the public. We have the foreign minister of Mexico coming, former World Bank president Bob Zoellick will be here and the purpose of this is to try to stimulate positive discussion about how both the United States and Mexico can get more out of our shared economic trade and investment relationships.

Ted Simons: And indeed, U.S. exports to Mexico, reading more than Brazil, Russia, India, China, U.S. exports like 6 million jobs, Mexico seems to be a rising economic dynamo. Is that accurate?

Kurt Volker: That is absolutely accurate. Mexico today is not the Mexico you thought of 20 or 30 years ago. Mexico has unemployment of about 5%, growing GDP also at about 5%, the number of Mexican immigrants coming across the border has dropped significantly, it's mostly Central Americans now. And the potential for increasing trade and investment and economic growth on both sides of the border is significant. And Mexico is going into new areas. They're an oil exporter, they're going into more high-tech, aero-space industry, and some of our companies are sourcing on both sides of the border to both our benefit.

Ted Simons: And seeing a rising middle class over in Mexico, obviously American companies see that, export time.

Kurt Volker: Exactly. There are exports and there's also the possibility of investment to produce more goods, but go back into the U.S. economy as well.

Ted Simons: As far as the leading concerns regarding trade, I know we've got sugar issues now as far as sugar tax, energy issues. You mentioned energy; they have had a monopoly for petroleum for a long time. Is that breaking up?

Kurt Volker: It is breaking up, and there will be opportunities for Mexico to focus on oil exports, while also looking at imports of U.S. natural gas, that could help their electricity sector and further spur their own economic growth. Reducing energy costs inside Mexico while they have an export benefit. There's a lot of shared benefit. I think the way to think about it, if you look at the U.S- Canadian border, this is a source of massive daily trade, daily exchange back and forth, the auto industry, for example, that really benefits both countries. The question we're posing, how can we make the U.S-Mexican border more like the U.S. - Canadian one when it comes to the economy?

Ted Simons: Can you make it more like the Canadian one when there are so bottlenecks, even as we speak there are bottlenecks, and again, the immigration issue always overshadows things. How do you get past that?

Kurt Volker: That's why we're doing a conference like this. If you have a policy discussion in Washington about Mexico, invariably the topic turns to immigration, crime, drugs. And what we want to do is say, those conversations will go on, people will have to deal with them, but let's also look at the potential of where we want to get to. What is the vision of what we should have?

Ted Simons: As far as the vision is concerned, again, you had especially in Arizona, especially law makers in Arizona, they see cross border terrorism as a real threat. How do you get past that?

Kurt Volker: Right. That is a real threat. Let's not -- Let's not minimize that. It's very real. And security on the border is an issue. I think our leaders in Washington are going to have to be dealing with that for some time to come. Help to Mexico to secure and access an entry into Mexico would be a fruitful area to pursue so that we help them control their space better. And we're also going to have to look at basic factors. If you think about the influence that drug gangs have, or that criminals have in Mexico, how do you diminish that influence? Partly by having a stronger more robust basic national economy where their role is less significant.

Ted Simons: When you mention crime, just a few years ago we were seeing horrific body counts and all sorts of crime. Again, it's a serious issue, but how do you get past that if you're talking about trade issues?

Kurt Volker: Well, you can't ignore anything. Let's not pretend these things aren't there. But if you do only that, and you don't focus on the opportunities for trade and investment, you're not going to grow; you're not going to get the benefit for both countries. In the long run, that is the big story. As Mexico develops economically, as unemployment goes down, the population becomes better educated, as there is more interchange between the U.S. and Mexico the significance of immigration, the significance of these crime and drug issues are going to go down.

Ted Simons: Mexican government, I've read, I've heard there is more of an open policy, more transparency, more accountability. First of all is that accurate, and second, how far can that go?

Kurt Volker: I just visited Mexico earlier this year with President Crow from Arizona State University, it is better. So that was your question. Is it as good as you want it to be? No. So there's a long way to go. But that's where you put your investment. You don't wait for it to be Switzerland, you say there's a trend and we can build on this to both of our benefit.

Ted Simons: As far as the perception of Mexico, is much of America still looking at Mexico as 30, 40, 50 years ago?

Kurt Volker: Absolutely. It's hard to reset perceptions. But I think Mexico has changed a lot, even in the last decade.

Ted Simons: Part of the McCain institute and other efforts has changed that perception or used that perception to go into different --

Kurt Volker: It's getting an agenda for what we can do together that will be beneficial to the United States, and beneficial to Mexico.

Ted Simons: OK. Since we got you here, the forum is on Mexico and trade relations and that's very important, a lot of other stuff going around, so let's start with the Ukraine. What is happening as far as that is concerned is American foreign policy regarding the Ukraine effective as we speak?

Kurt Volker: It depends what we mean by effective. If you mean are the sanctions we've put in place stopping Putin from invading and dismembering Ukraine. No. That is not effective. Putin is determined to break up Ukraine to exercise decisive influence over the east, and to keep pressure on Kiev and the rest. He has expansionist agenda, he's put his troops inside Ukraine, tanks, artillery, been fighting inside. And now there's a ceasefire in place which is basically cementing a frozen conflict if that's where it ends. I believe what Putin is doing is buying a few weeks to consolidate, get through the European Union's next consideration of sanction and he'll go back on the offensive again. I think we need to ramp up a lot more.

Ted Simons: NATO's position, NATO's part in all this --

Kurt Volker: NATO had a summit meeting in early September, and there's one aspect of this which I think is very important and well done, which is reassuring all of our current allies, Poland, Baltic states, others in western Europe, Norway, if there is a threat against those countries, like there is against Ukraine, we will defend them. We will be there to protect our allies. By doing that and doing nothing about Russia's invasion of Ukraine, I'm afraid NATO will send a green light to Putin, you can do what you want because we're not going to stop you.

Ted Simons: Can he do what he wants in areas where there aren't so many Russian nationalists? Ukraine, you got so folks on the ground there who are welcoming Russia.

Kurt Volker: There are quite a few there, but there are also others, and we're talking hundreds of thousands of people and probably the majority in these two provinces who are not ethnic Russian or at least do not support adhering to Russia. Those people are probably going to end up as refugees, or exiles in their own country.

Ted Simons: Does it get better before it gets worse?

Kurt Volker: It gets worse before it gets better. I think Putin has played this masterfully in terms of information campaign, attacking a country without allowing it to be pinpointed as here's the attack doing it through subversion. Playing the diplomatic game so it appears he's trying to be reasonable. He's denied all along that Russian troops are inside Ukraine. We can see it with our own eyes, yet he denies that because that helps him deal with the diplomatic aspects of this in Europe.

Ted Simons: And to the Middle East, the threat that is Isis. How serious a threat to America, how serious to the Middle East?

Kurt Volker: Very, very serious. And on the anniversary of 9-11, we really do have to remember, we've seen this before. We've seen terrorist groups form, have access to territory where they can train and develop plans, and they can send people off to attack us or others as in London or Madrid. This is even worse. Because we have a group that is larger, better funded, controls territory, controls on energy experts, and they have made it perfectly clear in their videos, their social media, their statements, they intend to attack the United States. So we're at the situation now I think President Obama is saying we're going to hit them is exactly right. Because we ought to be hitting them before they really get the capacity any further to hit us. The question I think people are debating today after the president's speech last night is, is this enough? We'll do air strikes, we may even do air strikes in Syria, but are we going to be sure that we're -- We are eliminating this group quick enough before they hit us?

Ted Simons: Is ISIS a threat to just absolutely turning the Middle East upside down with the Sunni-Shia regional war -- Proxy war seems to be going on. The big boys and everyone else, are they ever closer to getting involved?

Kurt Volker: They're involved already. But they're involved in this proxy way. You have this great divide Islam between the Shia, led by Iran, and the Sunnis with a nominal leader in Saudi Arabia, and then they have these proxies, like Hezbollah is fighting Iran's wars in the Middle East, they're inside Syria, fighting with Assad, also -- Against the opposition inside Syria, which includes this crazy group ISIS, as well as the free Syrian army.

Ted Simons: You said they were very well funded. Who is funding these people?

Kurt Volker: It started I believe when they were in Syria, and they were the most effective of the opposition groups and I think they got funding from some of our allies in the Gulf States. As they have change in addition an even more brutal and expansive force, I think some of the Gulf States are not supporting them, but they now control territory, they have local support amongst Sunni tribes; they have energy exports they can do from there. They have done amazingly well at going from a small group to a well-funded quasi state.

Ted Simons: We have heard these -- this is 20,000, a bunch crazy people, criminals, a bunch of psycho paths you just get -- Wipe them out, get it over with, move on. Is that it easy?

Kurt Volker: It's not that easy. Because you have this war going on in Syria, where the population has become more radicalized themselves and they're looking for who is going to be the toughest, most bloodthirsty, brutal force to fight back against Assaad? Inside Iraq you have Sunni tribes that are very unhappy with what they see as a Shia domination of the government in Baghdad, and so they're looking at the worst of two evils, they think the government in Baghdad may be the worst. So uprooting this is going to be very difficult but essential.

Ted Simons: Before we let you go, the very quickly, are we -- 9-11, are we safer now than we were in 2001.

Kurt Volker: The threats are probably worse. And our preparedness is probably better. That's a tough balance. We are smarter about how to defend ourselves, our law enforcement, our intelligence, our first responders; they're more on top of things than they were in 2001. But these threats that are out there, like with Isis we were just talking about, that is warriors than Al Qaeda.

Ted Simons: Ambassador, it's good to have you here. Thank you for joining us.

Kurt Volker: Thank you.

Kurt Volker:Former Ambassador and Executive Director, McCain Institute and United States;

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