Will Marijuana Become Mexico's Latest Export to the United States? Adam Thomson - The Financial Times
go to original November 12, 2012

Mexico enjoys a long and deep trade relationship with the US, with products ranging from automobile parts and flat-screen televisions to tomatoes and chicken breasts flowing north across the border to the world’s biggest consumer nation.

But last week, Mexican politicians began talking about another potential export to the US market, which has so far only entered the country illegally: marijuana.

The decision on Tuesday by voters in the states of Colorado and Washington to legalise the drug has provoked a near storm of reaction south of the border, in particular from members of the centrist Institutional Revolutionary Party (PRI), the party that is about to return to power for the first time in 12 years.

Luis Videgaray, one of the party’s sharpest minds and a person sure to occupy a top job in the incoming administration of Enrique Peña Nieto, Mexico’s president-elect, told a local radio station that legalisation “changes somewhat the rules of the game in the relationship with the US…it obliges us to undertake a review of our joint policies regarding drug trafficking and security”.

César Duarte, PRI governor of Chihuahua state, which borders Texas, went further. In an interview with Reuters, he said that the legalisation issue should force a radical rethink and perhaps even the start of a business opportunity.

“It seems to me that we should move to authorise exports,” he told the news agency this week. “We would therefore propose organising production for export, and with it no longer being illegal, we would have control over a business which today is run by criminals.”

The reaction is understandable enough. The outgoing Mexican administration has spent billions of dollars during the last six years trying to combat the lucrative trade in illicit drugs. About 60,000 lives have been lost in the process, and security in Mexico has risen to the top of many people’s priorities.

And weed forms a sizeable chunk of the problem. According to a fascinating Rand Corporation report from 2010, marijuana smuggling into the US could account for up to 26 per cent of Mexican drugs cartels’ gross drug export revenues.

There are still a lot of unknowns in all of this. First on the list is how the US federal government will react if and when the two states move to implement the changes from Tuesday’s popular vote. (Under federal law, the importation of marijuana remains illegal).

Second is the extent to which local entrepreneurs and marijuana consumers in those states will simply do their own thing and grow locally. Just take a look at California where the widespread consumption of medical marijuana in recent years has spawned a sizeable farming industry.

Third, and perhaps most fundamentally, the fact that two US states voted to legalise the drug hardly constitutes the entire country.

But while all that suggests no quick start of a flourishing and legal marijuana trade between Mexico and its northern neighbour, the issue is certain to come up during Peña Nieto’s forthcoming trip, scheduled for November 27, to Washington to meet with US President Barack Obama.

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