Shortly before the US elections last November, then vice-presidential candidate Joe Biden was widely criticised for predicting that an Obama administration would almost certainly be tested by what he called a "generated" international crisis, in much the way that the Soviet Union "tested" John F Kennedy shortly after he assumed office. Biden did not point to a specific region of the world, but mentioned the Middle East, the Indian subcontinent and Russia as the likeliest sources of trouble for the new president.

Impolitic or not, Biden's anxieties seem to have informed several of the administration's early foreign policy decisions. These include his own extension of an olive branch to Russia at the recent Munich security conference, and Barack Obama's appointment of Richard Holbrooke as special envoy for Pakistan and Afghanistan – and of George Mitchell to a similar post for Israel-Palestine.

But, as pressing as the Middle East, south Asia, and Russia (as well as Iran and North Korea) are, another crisis far closer to home could create as much peril as a nuclear-armed Iran, an aggressively resurgent Russia, or even an Islamist-dominated Pakistan.

That crisis is located in Mexico, which is in free fall, its state institutions under threat as they have not been since at least the Cristero uprising of the late 1920s and possibly since the Mexican revolution of 1910. While the Obama administration is obviously aware of what is happening south of the Rio Grande, the threat simply does not command the attention that its gravity requires.

The crisis consists in nothing less than an effort by the major drug cartels to tame and suborn the Mexican state, and not just in the strip along the US border, though the epicentre of the crisis is there. Obviously, the cartels' leaders do not have designs on Mexico's presidential palace. But, through a policy of terror extending from Oaxaca in the south, through Acapulco on the Pacific coast, and up to the great border cities of Tijuana and Juarez (Mexico's sixth and seventh most populous cities, respectively), they have made it abundantly clear that they are trying to achieve impunity.

The only recent parallel in Latin America was a similar effort 15 years ago by the Colombian drug cartels. That disguised coup failed – barely – and there is no guarantee that the result will be similar this time around in Mexico.

Journalists with long experience of war zones report being more worried about their safety in Mexico border than when they were in Bosnia, Afghanistan, or Iraq, though much of the violence is internecine. Of the thousands who have been killed, often after being horribly tortured, many, if not most, have been members of the drug cartels and their families.

But it is the campaign of targeted assassination against any Mexican official who seems to pose a serious threat to the cartels' operations that makes the crisis so dire. First, in May 2007, the cartels killed Jose Nemesio Lugo Felix, the general co-ordinator of information at the national centre for planning and analysis to combat organised crime. Soon after, a hitman murdered Edgar Milan Gomez, Mexico's highest ranking federal police official.

In November, 2008, a plane carrying Juan Camilo Mourino, Mexico's national security adviser, crashed under mysterious circumstances. And very recently, the retired General Mauro Enrique Tello Quinones, one of the most decorated officers in the Mexican army, was abducted, tortured, and killed less than a week after assuming a new position as anti-drug chief in the resort city of Cancún.

For all the lip service paid to relations with Mexico (and, indeed, with Latin America more generally) from Franklin D Roosevelt to Obama, the truth is that developments in Mexico have always had short shrift from US presidents. Illegal immigration is a major issue, to be sure, as is the drug trade. But the US government has always regarded them as domestic American issues rather than as crucial foreign policy concerns.

It is emblematic that while Obama has received Mexican President Felipe Calderón, the White House only recently announced that one of his first foreign trips would be to Mexico. And incoming secretary of state Hillary Clinton was asked almost nothing about Mexico at her confirmation hearing, and she emphasised relations with Mexico neither in her own statement nor in those she has made since assuming her post.

Indeed, the conventional wisdom in the US is that Mexico policy regarding illegal immigration and drugs will be the province of the new homeland security secretary, Janet Napolitano (herself a former border state governor). Meanwhile, the treasury and commerce departments will be handle trade policy concerning Nafta, the North American Free Trade Agreement.

This is the way Mexico policy has been run for decades. And, offensive as this has been to Mexican sensibilities – and harmful to finding long-term solutions to America's immigration dilemma – these complacent arrangements have never presented so clear and present danger as they do today.

Copyright: Project Syndicate, 2009