Stalling Immigration
Procrastination won't make reform easier.

Friday, June 23, 2006

THE REPUBLICAN Party controls the White House, the Senate and the House of Representatives. All three bodies support some version of immigration reform, and bills have passed both chambers of Congress. But House Republican leaders have refused to open talks to bridge the gaps between the two versions; they have decided that ironing out the differences within their own party is too onerous. Instead, House leaders have branded the Senate package as a liberal "Kennedy bill" and promised to run against it in the coming midterm elections. Despite the fact that Congress has already held hearings on immigration for two years, lawmakers plan to hold yet more hearings around the country -- especially in the Southern border states where the House's draconian enforcement approach is electorally potent.

This is irresponsible. About 400,000 Mexicans move to the United States each year, so delay is costly. Moreover, that flow may well increase given trends in the Mexican economy. As Hale Advisers, a financial consultancy, points out, Mexico is losing out to China in the fight for the U.S. market: Most of Mexico's shoe industry has shifted to China, and firms such as Sony, NEC and Kodak have moved their Mexican operations to China also. Despite the strong U.S. economy, Mexico has only 6 percent more jobs today than it had in 2000. Previous economic recoveries typically produced employment growth of 30 percent or so, according to Hale Advisers.

Mexico might be able to compete better against China, and so stanch migration pressure, if China revalued its currency or if Mexico reformed its economy. But China's leadership has so far resisted U.S. pressure to take more than baby steps toward revaluation, and Mexico's political system has failed to deliver the needed deregulation of its labor market. Moreover, the business climate in Mexico may be about to get worse. The country's pro-market president, Vicente Fox, leaves office this year. His successor will be chosen in an election July 2. The leftist Andrés Manuel López Obrador is a strong contender.

If Mr. López Obrador wins and pursues the populist economic policies he's been associated with in the past, the flow of Mexican arrivals in the United States could accelerate. The consequences in Congress would not be pretty. The passions around immigration would grow fiercer than ever -- and the prospects for balanced legislation would get worse, not better.