AMLO and Trump: Useful Scapegoats or Unlikely Allies?

Mexican president-elect Andrés Manuel López Obrador gives a news conference, October 31
Mexican president-elect Andrés Manuel López Obrador gives a news conference, October 31 (Sitio Oficial de Andrés Manuel López Obrador)

Mexico’s new president, Andrés Manuel López Obrador (AMLO), looks like the perfect adversary for Donald Trump. The American represents the financial elites and inequality AMLO has railed against his entire career whereas he himself embodies the hopes of Mexico’s poorest, many of whom have sought a better life in the United States — and who have been disparaged by Trump as criminals and rapists.

But the two leaders also share traits: a populist style, policy light on detail and nostalgia for a bygone era.

The two have avoided a confrontation on trade. Immigration and security provide more opportunities for compromise — but could just as easily cause the relationship to come unstuck. Read more “AMLO and Trump: Useful Scapegoats or Unlikely Allies?”

Modest Gains for Trump in NAFTA Renegotiation

Angela Merkel Donald Trump Justin Trudeau
German chancellor Angela Merkel, American president Donald Trump, Canadian prime minister Justin Trudeau and other G7 leaders meet in Charlevoix, June 8 (Flickr/Justin Trudeau)

On the heels of an arbitrary — and, it turns out, unnecessary — deadline, Canada, Mexico and the United States have finalized a renegotiation the North American Free Trade Agreement (NAFTA). The new deal is called the United States-Mexico-Canada Agreement (USMCA):

What’s in it? Read more “Modest Gains for Trump in NAFTA Renegotiation”

What You Need to Know About the Election in Mexico

Mexico’s general election on July 1 will involve roughly 3,400 new elected officials taking office and $2 billion in campaign finance. It has been dubbed the biggest election in Mexican history.

It is important not only in terms of scale, but in terms of its new rules. For the first time, the ban on reelection does not apply and independent candidates can run.

This heightened capacity for change coincides with an electorate moving from apathy toward anger. Last year, only 18 percent of Mexicans told pollsters they were satisfied with their democracy, down from 41 percent in 2016. Institutional confidence is at a nadir.

Concerns about violence and insecurity related to drug cartels and organized crime are now coupled with deep frustrations about corruption and impunity as well as lopsided relations with the United States. Read more “What You Need to Know About the Election in Mexico”

Allies Hope for the Best from Trump, Must Plan for the Worst

Presidents Recep Tayyip Erdoğan of Turkey and Donald Trump of the United States listen to Secretary General Jens Stoltenberg of NATO making a speech in Brussels, May 25
Presidents Recep Tayyip Erdoğan of Turkey and Donald Trump of the United States listen to Secretary General Jens Stoltenberg of NATO making a speech in Brussels, May 25 (NATO)

American allies are coping with Donald Trump’s disruptive presidency in similar ways, a collection of essays in the latest issue of Foreign Affairs magazine reveals:

  • All feel they need to step up and defend the liberal world order as Trump is determined to put “America first”.
  • They worry that a new era of American isolationism could make the world poorer and less safe.
  • Leaders are doing their best to rein in Trump’s worst impulses and most of their voters understand the need for pragmatism, although they have little faith in this president. Read more “Allies Hope for the Best from Trump, Must Plan for the Worst”

As America Turns Inward, Europe and Mexico Double Down on Trade

European Union flags
Flags of the European Union outside the Berlaymont building in Brussels, July 22, 2016 (European Commission)

The European Union and Mexico have committed to deepening their economies ties in the wake of Donald Trump’s inauguration as president of the United States.

In a statement released last week, EU trade commissioner Cecilia Malmström and Mexican economy secretary Ildefonso Guajardo announced that they would hold talks in April and June to renew a 2000 trade agreement between the two sides.

The EU hopes to expand the trade deal to broaden property rights protection, lower tariffs and include public tenders as well as trade in energy products and raw materials. Read more “As America Turns Inward, Europe and Mexico Double Down on Trade”

North American Energy Independence Achievable

An hydraulic fracturing station in Lycoming County, Pennsylvania, August 12
An hydraulic fracturing station in Lycoming County, Pennsylvania, August 12 (Nicholas A. Tonelli)

The Republican Party’s presidential candidate Mitt Romney last month unveiled a plan to achieve North American energy independence in 2020. “This is not some pie in the sky kind of thing,” Romney told voters in New Mexico. “This is a real achievable objective.”

He may be right. Read more “North American Energy Independence Achievable”

Economy, Not Drug War, Peña’s Main Challenge

Although some of the votes are being recounted to ensure that there were no irregularities, there is little question that Enrique Peña Nieto won the presidential election in Mexico this weekend. After twelve years, it marks the return to power of the country’s Institutional Revolutionary Party which ruled Mexico for more than seventy years in what was widely regarded as an authoritarian manner.

Peña’s win is hardly a repudiation of Mexican democracy however. It rather signals a desire for change than a reminiscence for the days of single party rule. As the third place finish of the incumbent liberal National Action Party showed, Mexican voters overwhelmingly desire a different economic and a different security policy.

Drug related violence in Mexico has increased dramatically during the last twelve years while economic growth has been lackluster. During the worst of the 2008-2009 financial crisis, the Mexican economy contracted by almost 10 percent.

Of the two issues, security and the economy, the former has captivated the attention of international news media. Much has been made of the potential consequences of a PRI government for the war on drugs and Mexico’s relations with the United States. American officials worry that Peña will turn a blind eye to the cartels due to public pressure. This is unlikely. He faces several constraints to his actions. Read more “Economy, Not Drug War, Peña’s Main Challenge”

Oil Dependence Puts Mexico’s Energy Security at Risk

Despite having been favored with considerable hydrocarbon resources, Mexico’s energy security is in a dire state. Years of a corporatist and clientelist regime under the Institutional Revolutionary Party consolidated various structural flaws, preventing state-owned company Petróleos Mexicanos or Pemex from being able to adapt to changes in the energy market and the difficulties in upstream activities.

Four main challenges characterize Mexico’s current energy security situation. Read more “Oil Dependence Puts Mexico’s Energy Security at Risk”

Mexico’s Calderón Urges US to Enter Trade Talks

President Felipe Calderón of Mexico urged the United States on Tuesday to enter a Pacific free-trade agreement. “In this very difficult time in the world economy, the world needs more trade and not less trade,” he said in a speech at the United States Chamber of Commerce, a business lobbying group.

Calderón, whose conservative National Action Party is almost certain to lose the presidency in July, credited his nation’s participation in the North American Free Trade Agreement and more than forty other trade pacts with helping its economy grow 4 percent last year and create almost 600,000 net new jobs.

The Obama Administration has signaled an interest in joining the Trans Pacific Partnership to deepen American engagement in East Asia. The organization seeks to eliminate all tariffs on imports and exports between Pacific nations by the middle of this decade.

The partnership began in 2006 as a free-trade area including Brunei, Chile, New Zealand and Singapore. Australia, Malaysia, Peru and Vietnam are on track to join. Canada, the Philippines, South Korea and Taiwan also want to come aboard.

Canada, Japan and Mexico urged the United States to ascend to the organization in November but have yet to receive an answer.

Ahead of a summit of American states almost two weeks ago, Colombia’s president Juan Manuel Santos Calderón also pressed the United States to engage more actively with other countries in the Western Hemisphere.

“If the United States realizes its long-term strategic interests are not in Afghanistan or Pakistan but in Latin America, there will be great results,” Santos predicted.

Relations between Colombia and the United States were frayed by President Barack Obama’s two year delay of the implementation of a bilateral free-trade deal. A similar agreement with Panama was also upheld throughout the first half of his presidency.

The American leader faces his own reelection battle in November and will be hard pressed to convince his Democratic Party base that freer trade across the Pacific is in the interest of American workers.

Manufacturers that were once headquartered in the industrial heartland of the United States, parts of the Midwest and northeast of the country that are now known as the Rust Belt, have shifted production overseas, often to China or other low wage countries in East Asia as well as Mexico.

The president has blamed this outsourcing on other nations not playing by the rules. “Our workers are the most productive on Earth,” he said in January, “and if the playing field is level, I promise you, America will always win.”

Yet Obama is reluctant to lift trade barriers that would create a level playing field. Rather he has enacted protectionist measures that further distort free trade.

The United States prohibit foreign sales of high technology and weapons and subsidized domestic automakers, banks and insurance companies. Ethanol subsidies expired this year but many import and investment restrictions remain. “Buy American” procurement rules further add to the cost of trade.

Peña’s Election No Repudiation of Mexico’s Democracy

Mexico elects its next president in less than three months from now. The Institutional Revolutionary Party is poised to return to power with the popular Enrique Peña Nieto, the former governor of the central state of Mexico.

Among the remaining contenders is the nation’s second woman presidential candidate, Josefina Vázquez Mota, a former education secretary and businesswoman who represents the incumbent National Action Party. Andrés Manuel López Obrador, the former mayor of Mexico City, was nominated for the presidency for the second time by the left-wing Party of the Democratic Revolution. Gabriel Quadri de la Torre represents the New Alliance Party.

Peña maintains a comfortable lead over his competitors. Polls in March showed Peña ahead of his closest contender, Vázquez Mota, by more than 10 percentage points. López Obrador remains in third place and does not appear to be advancing. Quadri, for his part, has almost no support in the surveys.

As Mexican voters appear inclined to return the PRI to power, some argue that the country is losing its faith in democracy. PRI became infamous for its corporatis and clientalist style of government which allowed it to rule Mexico for more than seventy years in what author Jorge Mario Pedro Vargas Llosa, a Nobel laureate, once described the period as one of “perfect dictatorship.” Read more “Peña’s Election No Repudiation of Mexico’s Democracy”