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Cartel Wars and Trade Relations: An Impending Threat to US-Mexican Dynamics

Updated: Nov 29, 2023

International Affairs Analyst

Credit: Wikimedia Commons

Since the introduction of the North American Free Trade Agreement (NAFTA) in the 1990s, the trade relationship between the United States and Mexico has undergone significant growth and transformation. NAFTA, a landmark trade deal aimed at eliminating barriers and fostering economic integration among signatory countries, revolutionised the bilateral trade dynamics between the two nations. By removing tariffs and facilitating cross-border investment, NAFTA opened up new avenues of opportunity for businesses and consumers on both sides of the border. Over the past few decades, this agreement has spurred a remarkable surge in trade volumes, leading to unprecedented economic interdependence between the United States and Mexico.

Furthermore, the trade relationship between the United States and Mexico has flourished to become one of the most substantial and influential economic partnerships in the world. As

NAFTA took hold and its provisions solidified, trade between the two countries surged exponentially, transforming their commercial ties into a juggernaut of international trade.

In recent years, the U.S.-Mexico trade corridor has reached unprecedented levels, surpassing all other bilateral trade relationships globally. Both countries now heavily rely on each other's markets, with a myriad of goods and services flowing seamlessly across their shared border. As a result, Mexico has become a globally significant manufacturing hub, and the largest manufacturing hub in the Western Hemisphere. Unfortunately, this extremely successful relationship is being threatened by an ongoing internal war between competing Mexican drug cartels. If left unchecked, this war has the potential to do tremendous damage to the most productive trading relationship in the world.

Currently, the ongoing cartel war in Mexico has three main belligerents; the Sinaloa Cartel, the Cartel de Jalisco Nuevo Generación (CJNG) or Jalisco New Generation Cartel, and the Mexican Government itself. Each has its own unique role that is worth further exploration. The Sinaloa Cartel, made famous by its former leader, Joaquín “El Chapo” Guzmán, has been the wealthiest and most powerful cartel for the past 2 decades, following the dissolution of Félix Gallardo’s Guadalajara Cartel and the Arrellano Félíx-led Tijuana Cartel. What has stood out about the Sinaloa Cartel - and made it such a formidable trafficking operation - is its remarkable stability. In an era marked by instability throughout the 21st-century world of trafficking, with factions constantly shifting, rearranging, and falling apart, the Sinaloans have remained the exception. According to official sources, the Sinaloa Cartel is responsible for around 40-60% of Mexico’s drug trade, profiting around $3 billion annually.

Such success is far from an accident. While Sinaloa has never been particularly averse to violence as a means to an end, it traditionally has not been their go-to. To assure stability, the Sinaloa Cartel has created sophisticated mechanisms to peaceably resolve disputes, expand its territory, as well as secure access to foreign markets. For instance, as clarified in testimony from Colombian smuggler Juan “Chupeta” Carlos Ramírez Abadía, South American drug manufacturers commonly recompense the Sinaloa Cartel by furnishing cocaine to facilitate the transportation of their goods into the United States. In situations where a drug consignment is misplaced or confiscated within Mexico, the Sinaloa Cartel takes on the responsibility of fully reimbursing the total worth of the shipment to its counterparts in South America. In contrast, once the shipment crosses the U.S. border, the Sinaloa Cartel takes on a specified percentage of ownership in the merchandise. Consequently, if the shipment is lost or seized on U.S. territory while under the control of the Sinaloa Cartel, the criminal group is exclusively accountable for the losses pertaining to its share of the shipment.

Such sophisticated practices and traditions have allowed the Sinaloa Cartel the stability required to expand into a transnational drug trafficking enterprise, from establishing strong ties to the South American producers, to becoming well integrated with distributors in the United States, and increasingly, Europe. However, the previous instability has given way to a dangerous new threat to Sinaloan hegemony in the form of the Jalisco New Generation Cartel (CJNG). If the Sinaloa Cartel is the ExxonMobil of the narcotrafficking world, then CJNG would be ISIS.

CJNG, led by Nemesio “El Mencho” Oseguera Cervantes, made famous by their numerous massacres, and practice of cannibalising their victims, represents the most significant challenge to the Sinaloan dominance within the Mexican drug trafficking world. While the Sinaloans fancy themselves as high-level executives in the narcotics trade, CJNG operations are far more akin to a terror cell, or other militant group. For Jalisco New Generation, power and intimidation is the main goal, while drug dealing is merely a side business. While the Sinaloa Cartel certainly is not afraid of using violence to achieve their ends, killings tend to take the form of strategic assassinations, usually of individuals who are being particularly disruptive of the business.

Map of the CJNG’s territorial presence, 2020 |Credit:

CJNG takes a wholly different approach. For example, in April of 2015, the CJNG orchestrated an ambush in Jalisco state that resulted in the deaths of 15 Mexican police officers. This incident stands as one of the most lethal assaults on security forces in recent Mexican history. The group was also held accountable for an attack in March 2015, which claimed the lives of five federal police officers. Moreover, Mexican authorities had previously pointed out that the organisation possesses highly advanced weaponry, including machine guns and grenade launchers that were employed in the execution of the attack in March 2015. In May 2015, the group continued its spree of violence by bringing down a military helicopter, subsequently unleashing a wave of turmoil throughout Jalisco. In the time following CJNG’s emergence, there has been a spike in the reported number of kidnappings, homicides, and mass graves discovered within the Mexican state of Jalisco, CJNG’s “base.” Additionally, a judge in the Western state of Colima, who was

known for trying several cases against cartel members, was killed alongside his wife in June 2020.

The third major belligerent within this current cartel war is, of course, the Mexican government. Led by President Andrés Manuel López Obrador, or AMLO, the Mexican government has undertaken an...interesting strategy, to say the least. AMLO, a left-wing populist candidate, originally ran for president on a platform of Abrazos, no balazos (Hugs, not bullets). However, almost immediately upon assuming office in 2018, AMLO seemed to realise that such a strategy would not be effective against the cartels, so he began militarising the Mexican National Police. So far this strategy has had mixed results. A large amount of this has to do with AMLO himself. Making a parallel with American politics. AMLO has been compared to numerous divisive figures ranging from Donald Trump to Bernie Sanders, highlighting his controversial personality and polarising policies. In any case, AMLO is an eminently difficult individual to work for/with, which has greatly hampered the Mexican government’s ability to formulate a cohesive strategy to fight the Cartels.

For example, in the early portion of AMLO’s tenure, relations between the United States and Mexico were quite cordial. Then-president Donald Trump, himself a populist, was not nearly as invested as his predecessors were in the particulars of Mexican governance. In his mind, as long as the Mexican government took steps to limit migration from Central America, the Trump administration would be hands-off on just about everything. Following the 2020 U.S. Presidential election, when Joe Biden assumed office, relations quickly soured. Biden, himself being much more of an establishment president, has sought to restore the traditional U.S.-Mexico relationship, as had been the case in previous administrations. Both countries are well-integrated culturally, economically, and ethnically, being each other’s largest trading partners and both being the 1st and 2nd largest Spanish-speaking countries in the world. However, both governments tend to be very territorial when it comes to issues of governance. In the early months of the Biden administration, after it was made clear that the United States was planning on being far more involved in Mexico’s fight against the cartels, AMLO responded by shutting the door on U.S. officials. As a result, there has been very little intelligence sharing or military coordination, and no extradition requests made by the United States have been granted by the Mexican government.

The ongoing cartel war, as well as the breakdown in relations between the American and Mexican governments, could have severe ramifications going forward. Earlier this year, Mexican Security forces successfully arrested one of the Los Chapitos of the Sinaloa Cartel, Ovidio Guzmán, as well as 17 other high-ranking members of the Sinaloa Cartel, significantly weakening Sinaloan power throughout the trafficking world. Currently, while CJNG has been challenging Sinaloan access points across the U.S.-Mexico border, they have yet to make any meaningful gains. However, with the Sinaloa Cartel being the primary target of the Mexican government, and with a large portion of Sinaloa’s senior leadership weakened, CJNG has an opportunity to make significant gains, and possibly even push across the border, into the United States.

If CJNG can successfully wrest control over even one of these access points from the Sinaloa Cartel, this could spell major trouble for both the United States and Mexico. A successful CJNG penetration north of the U.S.-Mexico border would almost guarantee that they would bring their “business strategy” with them. Simply put, if CJNG can gain a foothold in the United States, the mass graves that follow will include White Americans. What undoubtedly will follow will be a tidal wave of anti-Mexican sentiment from the larger United States population, similar to the anti-Muslim sentiments that permeated the U.S. following the September 11th attacks. While nobody can predict the specific policy that would manifest from such a sentiment, I don’t think it is a stretch to believe that the U.S. government will begin to seriously rethink the trade relationship it has with Mexico at large. Already, one can point to signs of this potential breakdown. Given the ongoing violence in Mexico, there has been a push from America’s hard right to begin listing many of these drug trafficking organisations as terrorist organisations, and to authorise military force against them.

Objectively, this is a bad idea. Theoretically, it is an even worse one, for a couple of reasons. First, the United States has no military base in Mexico, meaning the furthest it could project military force would be the northernmost regions of Mexico. These also happen to be the regions within Mexico best integrated economically with the United States, providing the bulk of manufacturing for most American companies. In fact, recent polling shows that residents of these regions tend to hold more favourable views of the United States than many American states themselves. A perception sure to change if American military action hits their communities.

The second reason authorising military force could be a risky strategy is that while drug cartels, especially CJNG, absolutely do share qualities with terrorist organisations, there is one crucial difference: Cartels are multi-billion dollar organisations, even ones as violent as CJNG. So far, in Mexico, they have not yet interacted with an armed group of the state that they have not found a way to infiltrate and corrupt. While this is not a guarantee that such a thing would happen with the United States military, there has been a history in the past of cartels recruiting U.S. soldiers. In an environment with increased contact between the two groups, one should not be surprised if the cartels would not at least make a serious attempt at infiltrating the U.S. military, which could pose tremendous strategic risks to the United States.

In conclusion, the relentless conflict between the Sinaloa Cartel and CJNG presents not only a grave security concern for Mexico but also a potential threat to the intricate trade relationship shared between Mexico and the United States. The escalating violence, widespread corruption, and drug-related activities stemming from this cartel war have the potential to undermine the stability of both nations. As these criminal organisations continue to wage their battles, the economic ties that bind the two countries might suffer, potentially jeopardising the flow of goods and services across the border. It is imperative for both governments to address this issue collaboratively, focusing not only on law enforcement and security measures, but also on addressing the socio-economic factors that fuel the cartel's influence. Only through such concerted efforts can Mexico and the United States hope to preserve their relationship while combating the grave consequences of this ongoing cartel conflict.


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