Fox's Game Plan

By Peter Katel/Mexico City

He is an impatient man. When Mexican President Vicente Fox Quesada wants to make a phone call, he's as likely to dial himself as to wait for a secretary to do it. When he needs to talk to an adviser, he discards the standard chief-executive drill of sending a flunky to summon the official. Instead, boot heels clacking on the wooden floors of Los Pinos--the Mexican White House--Fox strides down the hall to the adviser's office himself.

In the ancient seat of empire that is Mexico City, the man at the top of the pyramid traditionally lets the world come to him. Fox, 59, with his farmer's dislike of being cooped up and his salesman's instinct for staying mobile, exercises power on the move. If it's Tuesday, this must be Santiago, Chile; or Detroit; or the state of Chiapas; or downtown Mexico City. Constantly in the public eye, the former president of Coca-Cola Mexico has made himself Mexico's motivational speaker in chief.

That temperament is ill suited to the byplays, gambits and bluffs of negotiation and is one reason his big tax-reform plan and other domestic initiatives haven't got far. But no Mexican President--ever--has gone over in the U.S. the way Fox has. "I was watching the political elite going nutso for this guy. It was like Madonna had come to town," says Ana Maria Salazar, a former Clinton Administration official now teaching in Mexico, describing Fox's appearance one year ago at an Inter-American Development Bank event in Washington. And no Mexican President has ever had the chemistry with a U.S. President that Fox has with George W. Bush. The first foreign leader to play host to Bush as President, Fox will be Bush's first state visitor next week. Their agenda: a sequel to their talks at Fox's ranch house in San Cristobal last February. Topping the agenda is a proposed new U.S. immigration policy for Mexico.

Last week Bush said he had ruled out "blanket amnesty for illegals." But that was far from a rejection of the ideas that officials of the two countries have been negotiating. These include expanding a guest-worker plan, which Bush made a point of endorsing. And the Fox administration has always rejected the term amnesty.

The sight of the poorer, smaller neighbor proposing that the world's remaining superpower rewrite its immigration laws to give Mexicans preferential status is astounding enough. But Fox and his ambitious, visionary--and equally restless--Foreign Minister, Jorge G. Castaneda, consider immigration only a first step.

They're out to set an agenda for the U.S.-Mexico relationship that would leave in the dust of history 155 years marked, successively, by warfare, suspicion and wary tolerance. "We have to reduce the gap between Mexico and the United States--the wage gap, the technology gap, the infrastructure gap," Castaneda says. "It is quite clear that Mexico faces enormous difficulties over the next 15 years or so in finding ways to finance its infrastructure: highways, airports, telecommunications, electricity, refineries, fiber optics--the works. We think that it is in the United States' best interest to help on this. That's the type of discussion and negotiation which we think should begin to take place over the next few years."

That may happen, and it may not. In either case, economic "integration"--the new buzzword--has a momentum of its own. Thanks to the North American Free Trade Agreement, some 30% of Mexico's economy, which has a GDP of $865 billion, comes from exports to the U.S. So linked are the economies now that Mexico shares American bad times as well as good in real time. This year the looming U.S. recession has cost Mexico a 4.4% drop in shipments to U.S. consumers. Fox was worried enough two months ago to urge Mexicans to pray to the Virgin of Guadalupe for the U.S. economy. But faced with the bad economic numbers last week, Fox simply declared, "Panicking and talking about crisis is worthless, because that's not the reality."

And he is right. It's not a crisis--at least not yet. Foreign capital keeps pouring in--$2.8 billion for brand-new projects, 60% of it from U.S. companies, in the first six months of a tough year, an increase of 1.5% over the same period last year. U.S. business had been looking for a reason to boost its south-of-the-border presence. Fox, promising to end corruption and streamline bureaucracy, provided it. Says Steve Knaebel, president of engine manufacturer Cummins Inc. of Mexico: "There's been a lot of positive news on the opening of Mexico."

The Fox Effect transcends his considerable personal charisma. Mexicans realize that their vote to end the 71-year reign of the Institutional Revolutionary Party (P.R.I.) gave their country new clout north of the Rio Grande. "Mexico is now legitimized in the eyes of U.S. institutions," says economist Rogelio Ramirez de la O. And Los Pinos-White House currents are so warm that Bush has said he would veto legislation that would effectively ban most Mexican cargo trucks from hauling freight over the border and within the U.S. Law-enforcement relations are going so swimmingly that the Justice Department has passed confidential information about impending drug arrests to Mexico--unthinkable only a few years ago--and the two countries' top cops are even talking about expanding the flow of information.

The other side of the coin is that Fox is getting better treatment from the U.S. political establishment than from his own congress. Fox's proposals to reform Mexico's loophole-riddled tax system, open up the electricity sector to foreign investment and rewrite the Mexican constitution along U.S. lines--with congressional re-election, for one thing--are stalled or have not yet been formally introduced, nine months after he began his six-year term. Fox made Mexico's tax system the first major target in his campaign to rebuild the country's basic institutions. Mexico is one of the least-taxed societies on the planet. Tax revenue amounts to only 11% of GDP (compared with 30% in the U.S.), and the country's schools, roads and public hospitals could use some of the $12.8 billion that the proposal would produce. If Fox falls short of his goal, the estimation that the man who beat the P.R.I. can do anything would slip considerably. And as a sign that Mexico doesn't want to do its part to modernize itself, the failure to achieve tax reform would discourage the U.S. from upping its investment.

But even though nationalism, suspicion of the U.S. and fear of U.S. domination once seemed to be the DNA of Mexican politics, Fox's drive to deepen and intensify Mexico's relationship with what used to be called, unflatteringly, the Colossus of the North gets nearly unanimous applause from ordinary Mexicans and from political opponents. "In principle it's a great plan that we support," says Eddy Varon Levy, a green card-carrying, part-time resident of Los Angeles who is the deputy international-affairs coordinator for the once-ruling P.R.I. congressional delegation.

P.R.I. politicos and other Fox opponents are worried that his dream of a new relationship could wind up with Mexico's giving away all its mineral resources and business potential--including full ownership of big firms--in return for the U.S.'s allowing, say, a few thousand Mexicans to work legally north of the border. Recognizing that some forms of foreign investment are beyond the pale, Fox has vowed that the 1938 nationalization of Mexican oil resources is "untouchable." "If Fox screws up royally, that's when the nationalism will come in," says Manuel Garcia y Griego, director of the Center for Mexican-American Studies at the University of Texas at Arlington. "It's like anti-immigrant feeling in the U.S.--it's just waiting in the wings. All you have to have is unemployment going up." Though Mexican labor statistics are murky, Fox admits that the country lost 200,000 jobs this year when it should have been creating 1.5 million. The country thus needs the safety valve--and dollar remittances--of migrant labor.

With unemployment inching up in the U.S., Washington legislators may balk at any kind of guest-worker reform. But, Castaneda argues, "the economic downturn, for the moment at least, is not affecting the sectors of the [U.S.] economy where Mexican immigration is a factor. We are not hearing about layoffs in hotels or restaurants or the fields of California or the meatpacking plants of Iowa or the flower shops in New York. Companies where Mexican labor is employed are telling us there is no slackening of demand."

Mexico's northern-border commissioner, Ernesto Ruffo, argues that the time has come to end the "us-vs.-them" talk. Says he: "If we'd quit speaking in Spanish and in English and speak the language of economics, we'd end up understanding each other much better." Fox speaks that language (plus English) well. Only three months away from marking his first year in office, he is trying to cool expectations at home. "The country's fate doesn't rest on a President," he said last week as he urged Mexicans to go beyond their traditional fixation on the leader of all leaders. Still, Mexicans can't help seeing him as the man who knows how to talk to the people up north.

--With reporting by Lucy Conger and Dolly Mascarenas/Mexico City

To see the photographic essay On the Trail of Vicente Fox, go to time.com/fox

With reporting by Lucy Conger and Dolly Mascarenas/Mexico City