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Trade & Investment

Trump Begins to Reverberate in Mexico’s Presidential Elections

Activists and academics from Canada, the United States and Mexico called in March in Mexico for an end to the renegotiation of the North American Free Trade Agreement (NAFTA), because of its secrecy and because it fails to represent the interests of the people of the three nations. Credit: Emilio Godoy / IPS

Activists and academics from Canada, the United States and Mexico called in March in Mexico for an end to the renegotiation of the North American Free Trade Agreement (NAFTA), because of its secrecy and because it fails to represent the interests of the people of the three nations. Credit: Emilio Godoy / IPS

MEXICO CITY, Apr 4 2018 (IPS) - Statements by U.S. President Donald Trump against Mexico have begun to permeate the presidential election campaign in this Latin American country, forcing the candidates to pronounce themselves on the matter.

In his most recent angry tweet, Trump said Apr. 1 that he would withdraw from the North American Free Trade Agreement (NAFTA) if Mexico doesn’t work harder to stop illegal immigration and drug trafficking into the U.S.

The next few days will be crucial for the renegotiation of the trade deal between Mexico, the U.S. and Canada.

"After Trump's remarks, everything is up in the air. We will hear statements back and forth from the negotiating parties and the candidates. Any sign of having anything in common with Trump is political suicide for the candidates." -- Manuel Pérez Rocha

“After Trump’s remarks, everything is up in the air. We will hear statements back and forth from the negotiating parties and the candidates. Any sign of having anything in common with Trump is political suicide for the candidates,” said Manuel Pérez Rocha, Associate Fellow at the U.S. Washington-based Institute for Policy Studies.

The expert told IPS that “the important thing is to continue analysing the proposals of the candidates and see what positions they take with respect to NAFTA.”

The eighth, and presumably last, round of negotiations is scheduled to begin on Apr. 8 in Washington and end on Apr. 16.

After the seven previous rounds, the advances disclosed by the three partners have been scarce, in negotiations marked by rigid positions, tension and secrecy.

Of the 30 chapters that have been discussed, the negotiating teams have concluded the chapters on good regulatory practices, transparency, sanitary and phytosanitary measures, small and medium-sized businesses, competition and anti-corruption.

The priorities of the United States include new phytosanitary measures, greater protection of intellectual property, labour and environmental matters and the possible elimination of the dispute resolution chapter, which establishes special panels to address abusive trade practices.

Meanwhile, Mexico is focusing mainly on energy, electronic commerce and small and medium enterprises.

Canada, for its part, prioritises the inclusion of labour, environmental and gender standards, an increased migratory flow, indigenous rights, a revision of the dispute resolution mechanism, a more open government procurement market and higher wages.

The renegotiation of the treaty in force since 1994 also covers issues not included in the original text, such as energy, e-commerce and on-line activities.

The renegotiation of NAFTA was imposed by Trump, who included it in the campaign that took him to the White House in January 2017.

NAFTA and, above all, Trump’s outbursts about Mexico and Mexicans have begun to appear in the campaign for Mexico’s Jul. 1 presidential elections, although only the front-runner has addressed it explicitly.

Leftist candidate Andrés Manuel López Obrador, heading the “Together We Make History” coalition, said on Apr. 1 that “we are not going to rule out the possibility of convincing Donald Trump of his mistaken foreign policy and in particular of his contemptuous attitude towards Mexicans, we will be very respectful of the government of the United States, but we will also demand respect for Mexicans.”

The three-time candidate for the Mexican presidency expressed his support for NAFTA, but clarified that “it would be best to sign agreements after Jul. 1,” when he hopes to finally win the presidency with the support of an alliance between the leftist National Regeneration Movement and Workers’ Party, together with the conservative Social Encounter Party.

A protest against U.S. President Donald Trump outside the U.S. embassy in Mexico City. Trump’s verbal attacks against Mexico and Mexicans have increased since March and are beginning to reverberate in the campaign for the Jul. 1 presidential elections. Credit: Emilio Godoy/IPS

A protest against U.S. President Donald Trump outside the U.S. embassy in Mexico City. Trump’s verbal attacks against Mexico and Mexicans have increased since March and are beginning to reverberate in the campaign for the Jul. 1 presidential elections. Credit: Emilio Godoy/IPS

The second in the polls, Ricardo Anaya, candidate for the “Mexico al Frente” coalition, formed by the right-wing National Action Party, the centrist Party of the Democratic Revolution, and the centre-right Citizen’s Movement, has not referred to the renegotiation.

Nor has the ruling party candidate José Meade, representing the conservative Institutional Revolutionary Party, the Ecologist Green Party and the New Alliance, mentioned NAFTA or Trump so far in the campaign.

None of the candidates have discussed Trump’s promise to build a border wall between the two countries.

“Mexico has to withdraw from negotiations to reform the treaty and wait for a new government to take over the process. We can’t tolerate all of these insults and threats from Trump,” academic Alberto Arroyo, a member of the non-governmental coalition Mexico Better without FTAs, told IPS.

The car industry, “maquilas” or for-export assembly plants, agro-exports and financial services are among the sectors that have benefited from the 24 years of free trade between the three countries.

According to academics and activists from the affected sectors, the big losers under NAFTA have been small-scale farmers, including producers of the staple products corn and beans, and the food sector in general.

NAFTA strengthened Mexico’s trade dependency on the U.S., which purchases more than 80 percent of Mexico’s exports.

Imports from the United States, meanwhile, climbed from 151 billion dollars in 1993 to 614 billion dollars in 2017 – a 307 percent increase. Meanwhile, its exports grew from 142 billion to 525 billion, a 270 percent rise.

“Any disruption to the economic relationship could have adverse effects on investment, employment, productivity, and North American competitiveness,” says the study “NAFTA Renegotiation and Modernization,” prepared by the Congressional Research Service (CRS), a non-partisan legislative branch agency housed in the Library of Congress.

The report published in February adds that “Mexico and Canada could consider imposing retaliatory tariffs on U.S. exports if the United States were to withdraw” from NAFTA.

In 2017, the United States a trade deficit of 89.6 billion dollars with its two partners, compared with 9.1 billion in 1993.

“It is not clear how the (Trump) administration would expect to reduce the trade deficit through the renegotiation,” says the paper.

In another of his attacks, Trump threatened to impose extraordinary tariffs on steel and aluminum imports unless NAFTA were renegotiated to terms more favorable to the U.S

According to Pérez Rocha, Mexicans would celebrate the end of NAFTA as “a net job destroyer, and for allowing transnational corporations to devastate the environment.”

He added that, in his opinion, the majority of Mexico’s 123 million people would support an end to the treaty “for destroying the livelihoods of millions in rural areas, for being an instrument of corporations for reversing sanitary and environmental policies, and for making Mexico the Latin American country with the most obesity.”

He called for postponing the renegotiation until the new administration takes office, because “this government has been unable to ensure the interests of Mexicans. We need a change to society, a new way of interacting with all social sectors.”

For his part, Arroyo, who is writing a study on NAFTA’s impact on the Mexican economy, called for a treaty that respects “human, economic, social, cultural and environmental rights, the national sovereignty of each country and real economic development.”

The CRS report concludes that the outlook for the renegotiation is “uncertain”.

Today, the United States and Mexico are more and more similar to what English journalist Alan Riding once described as “distant neighbours.”

 
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