Evan Smith: You were the U.S. ambassador to Mexico for more than six years—

Tony Garza: Actually, only two ambassadors have ever stayed in the job longer. It was an extraordinary period of time. I found it very satisfying.

ES: How would you characterize the relationship of the two countries at the end of your service?

TG: The thing I’m most proud of is the tone. We had to deal with some difficult issues, and we managed to be more respectful and more mature—we embraced the notion of shared responsibility. I’d like to say that it was born out of friendship and history and culture, but the tone changed out of necessity. We recognized that we were dealing with transnational issues, so we needed transnational solutions. We had to pony up to the table and be more constructive about the way we talked to each other.

ES: How much of that was a result of the fact that the president of the United States during that time was from Texas?

TG: I don’t think you can underestimate the importance of having had George Bush as president. He had a personal appreciation and a keen instinct for all that is Mexico, and he gave me great latitude to be as proactive as I could be in developing the relationship. I will tell you, though, that as important as the personalities were, you can’t underestimate the importance of the times. Whenever a new officer arrived at the embassy, I would tell him, “What you do here has an urgency. It impacts not only this country but our home country immediately. You’ve not been posted to some sort of remote ship at sea. We’re a ship near the harbor.” We existed in a moment when we were talking about security issues, border issues, post-9/11 terrorist issues. If you took a step back and looked at the longer view of things, you recognized that everything you were doing was going to be relevant ten, fifteen, twenty years down the road. On the economic front, we truly appreciated the need to have a fluid and efficient border. There is a real market convergence—labor moving north, capital moving south—but there has yet to be a complete embrace of that reality at the political level.

ES: Explain that last part.

TG: If you looked at the United States today and you were honest about not only the evolving demographic but the role of the undocumented worker within our economic mainstream, you would have to say that our policy has not kept pace with the removal of obstacles for the efficient flow of labor into the marketplace—the efficient flow that is being driven by a legitimate market demand. Conversely, if you looked at Mexico, you’d say we need to remove obstacles to the efficient flow of capital into the marketplace, so we can have the sort of development that would minimize some of the pressures for immigration.

ES: In other words, create an economy that would give people an incentive to stay in Mexico.

TG: It’s not just that. I look at it broadly: within Canada, the United States, and Mexico. Create a region where you can have an efficient flow of labor to where it will best be utilized, and address comprehensive immigration reform from the standpoint of the application of human capital. With that said, you also have to look at the security dynamic, which I think has been the very real concern of most Americans in terms of immigration reform.

ES: The need for labor runs smack into concerns about security.

TG: Until you address border security, I don’t think you’re going to create an environment in the United States where comprehensive immigration reform is possible. You have to do them at the same time. The challenge is finding a moment when there’s sufficient political will in Washington.

ES: Glad you said that, because a couple summers ago we had a divisive debate over immigration reform in which the president found himself to the left of many members of his party—of your party—and nothing happened. You could argue that that was a failure of will. So what do we do? And what should our policy be?

TG: Listen, I’m very traditional in terms of my respect for the market. That defines me very much in the conservative camps. I do think [our policy] has to be market sensitive and market driven—it has to address the demand in our economy for skilled and unskilled labor. Some of the biggest proponents of immigration reform have been out in Silicon Valley, saying, “We need to be the country that draws the best and the brightest if we’re going to maintain our competitiveness.” At the other end of the spectrum, you have the construction-services industry saying, “Okay, if we’re going to continue to grow, we have needs too.” The next round of reforms should be a snapshot of demand that day, but there has to be some natural sort of trigger that allows for uptick as the economy is expanding.

ES: What do you do about the 12 million people who are in this country illegally? Some members of your party argued that all illegals should be shipped back to the countries they came from.

TG: It got to the point that, regardless of what criteria you put in place for the transition of that community into the system, many still characterized it as amnesty. There’s that old line in politics: “If you’re explaining, you’re losing.” As soon as our opponents said, “That’s amnesty,” we were losing. So we have to move away from that environment to one where cooler heads are saying, “How are we going to address this?” There are many ways, short of amnesty, that we could do it, including allowing them to apply for citizenship without sending them to the front of the line.

ES: How did you view the conduct of your fellow Republicans on the immigration issue?

TG: There are individuals I would single out as great leaders—certainly I would point to President Bush and [senators] John McCain and Lindsey Graham. There are others who had honest reservations about immigration reform and perhaps about the bill itself. But there were times when it was hard for me to listen to the debate without thinking that there was no distinction being made between me and anyone else. It was borderline anti-Latino, and that’s where the Republican party hurt itself. There are many Latinos with legitimate concerns about immigration reform, who want to take a close look at how you address the [status of the] 12 million, who want to have a system with integrity in place. But the tone was such that all nuance was lost. To some of the people who were doing it the loudest, I wanted to say, “I thought I knew you better than that.”

ES: What about the border-security issue? Do you favor a wall or fence or some other sort of barrier?

TG: I grew up along the border, where we’ve had physical obstacles as long as I can remember, so I’m not an opponent of physical obstacles. You go to Nogales, for example, and you’ve got one right there. You go to Brownsville, Matamoros, and right around downtown you’ve got the same thing. But a fence is a very expensive and not terribly efficient means of border security.

ES: Those communities seem to agree.

TG: I think the Department of Homeland Security has been, at times, a little insensitive—you’ll note the understatement there—in terms of how they’ve dealt with some of the property-rights issues. Texans feel strongly about their property rights. Let’s listen to those communities and let’s be respectful of those farmers and ranchers who may not want physical barriers dividing their property.

ES: What’s happening with the violence down there? How should Texans regard it?

TG: You’re talking to a guy who’s nearly fifty years old. If I sound a little nostalgic for the border I grew up with, it shouldn’t surprise you. Let’s face it: A part of that generation was never too far from the Cadillac Bar. And yet what I see today is very different. There’s far more violence, but it’s not just the numbers. The nature of the violence has changed, and it’s a by-product of [Mexican president Felipe] Calderón’s administration taking on the cartels. This is a lucrative business they’re in; they’re not going to cede anything to the government. Yet most of [the drug trade] is driven by demand in the United States, and the guns that are in the hands of those cartels have flowed south from the United States. There again you get back to why there’s such urgency in addressing this issue and in being partners. We can’t sit back and point the finger at Mexico and say, “Boy, you have a hell of a problem.”

ES: What can Texas do to live up to its end of the shared responsibility?

TG: Actually, we’ve done a pretty good job. Texas border communities and those within our state manage the tone well. I would include the governor in that. I saw a speech he made a couple weeks ago in which he said, “Listen, there is definitely violence there, and Calderón is doing his part. We’ve got to do our part. Those out there who are saying that Mexico is a failed state simply do not know Mexico. Failed states do not do nearly one billion dollars in trade a day with the U.S. Failed states are not among the twelve largest economies in the world.” On some instinctive level we recognize the importance of the relationship with Mexico, whether it’s because we have an economic or a familial relationship or we simply appreciate our history.

ES: Practically speaking, you agree that people living in El Paso and Laredo have cause to be careful in Juárez and Nuevo Laredo?

TG: You bet. The same with Brownsville and Matamoros. If you went on the State Department Web site, you’d see alerts—there’s a reason for that. There was a time when people on the border would say, “Well, there’s violence, but it’s drug on drug.” Now you can be a completely innocent bystander. You can be in one of the nice restaurants in Juárez and something can go down. It’s more random, it’s more aggressive, and it’s not limited to certain neighborhoods. It doesn’t mean you shouldn’t travel—it just means you need to travel a lot smarter. Like the old country lawyer used to say, don’t leave your common sense in the jury box when you go back to defend your case. I tell parents of spring breakers, make sure your kids don’t leave their common sense at the border when they clear Customs.

ES: I want to talk about politics back home, particularly about the civil war that is dividing the Republican party—nationally and in Texas. Where do you come down on all that?

TG: I’ve probably given this less thought than you might imagine, since I’ve been so focused on what I’ve been doing down here for the last six years, but I think this is the ebb and flow of cycles. The Republican party has had a great deal of success, going on thirty years now—all the way back to Ronald Reagan’s election in 1980. We’ve just come off two terms in the White House. The Democrats are in control of the executive branch and Congress, and the factions within our party are having a natural sort of inward-looking discussion. They’re doing what has to happen: debating the future. I don’t see it as unhealthy. I think the Republican party will come out of this pretty strong. I don’t want to sound too sanguine, but this ain’t my first rodeo.

ES: What do you think about Republicans who have said loudly and proudly that they hope the president fails?

TG: I’m not in that camp. I might disagree with President Obama on any number of issues, but at the end of the day I want my president to succeed, because I believe strongly that if my president succeeds, my country succeeds. I know that might sound kind of old-fashioned, kind of throwbacky and not partisan enough. But, you know, that’s the way I feel.

ES: Texas is now a minority-majority state and will soon be a majority Hispanic state. Do you think that the Republican party has done enough to reach out to this emerging community?

TG: I’m not sure either party has done a good job of reaching out to Latinos. I think the Democrats have been the default winner by virtue of the fact that people historically aligned themselves with that party. As Texas moves toward majority Hispanic status, the Republicans are going to have to do less shouting, less shorthand, and less sloganeering and court the Latino community in a way that’s relevant to Latino individuals—whether on education, taxes, or job creation. The Latino community is independent and intelligent. It wants to be talked to thoughtfully, and it wants to be persuaded, not just moved by emotion.

ES: Which of the two Republicans running for governor of Texas will have a better chance of reaching Hispanics?

TG: I think Rick [Perry] has done a good job of reaching out to the Latino community. He’s been smart on border issues, temperate on immigration, and sensitive to communities along the border. If you look at the state today, I think the biggest challenge he has is overcoming his incumbency. There’s an anti-incumbent movement out there, not only in Texas but across the country. But from where I sit—when I pick up the paper and see that we now have, what, 57, 58 Fortune 500 companies that have chosen to headquarter in Texas—he’s weathered the storm pretty well.

ES: Is that an endorsement?

TG: It’s an observation. I’m not sure that my endorsement much matters, but I’m voting for Rick Perry, if that’s what you’re asking.

ES: What are your short-term plans? I stumbled across tonygarza.com, which looks like a Web site for a private-sector endeavor as opposed to a coming political campaign.

TG: Look, you’re not going to see my name on a ballot again.

ES: Ever?

TG: Here’s what I’d like to do: I’m talking to a lot of people and moving toward a platform where I can be involved in a handful of special projects. I want to promote a business-to-business dialogue. Whether it’s Texas business looking south or Mexican business looking north, you’ll see me right in the middle of that.

ES: So if Governor Perry called you and said, “Kay Bailey Hutchison is stepping down to run against me, and I need you to slide into her seat,” what would your response be?

TG: My response would be, “Rick, I live in Mexico City. It seems like an odd place to choose a U.S. senator from.”