Tagged: U.S.-Mexico Relations
January 18, 2017 at 12:12 pm #1457Pamela StarrKeymaster
On Friday, January 20, Donald J. Trump will become the 45th president of the United States. The markets have already previewed the potential impact that his administration could have on US-Mexico relations – a plunging peso, firms reversing previous decisions to invest in Mexico, and general market uncertainty. Plus the uncertainty in the lives of undocumented Mexicans living and working in the United States.
The Mexican government has clearly decided the best initial approach to this potential threat to Mexican interests is a strategy of collaboration rather than confrontation. But signals from the Economy ministry suggest that Mexico is also preparing a more hard-edged “Plan B” should collaboration fail to protect core Mexican national interests.
What should be Mexico’s response be to the real threats to national interests posed by the policy promises of the in-coming Trump Administration? Does collaboration make sense or is confrontation a more promising strategy. Is confrontation the inevitable strategy? Can a cooperative approach hope to have success with an Administration that seems to value a negotiating strategy based on the Art of the Deal — to weaken an opponent as an essential first step to imposing conditions favorable to the Trump team? What is apt to be the future of US-Mexico relations?January 18, 2017 at 2:11 pm #1458Jeremy MartinGuest
When it comes to the bilateral energy relationship, there is a very positive narrative that can and should be set forth, particularly by industry in the United States. The bilateral relationship has developed into a very mature, robust and extensive one with huge amounts of natural gas being exported from the US to Mexico, as well as exchanges in both directions of oil and refined products. There is room to grow when it comes to the electric sector, but there are important interconnections along the California-Mexico and Texas-Mexico border. A focus on the flourishing and mutually beneficial commercial relationship — the new president is a deal-maker after all — and the amount of energy trade that is occurring between the two countries, not to mention the level of government-government interaction on a host of energy and environment issues underscores the opportunity to share a positive message for the newly installed policymakers in Washington, DC.January 19, 2017 at 7:56 pm #1465PaulinaGuest
Donald Trump has an anti-migration and anti-Mexico speech, full of protectionism, which has had results before his inauguration as President of the United States. This speech has caused that some companies like Ford and General Motors withdraw their investments in Mexico, also the peso has dropped to a record low against the dollar generating uncertainty about the future of the country, it´s economy and the bilateral relationship with the United States. However, it´s important to consider that Mexico has a bilateral relationship with the United States for years and it is essential to preserve it so the Mexican government must avoid falling into any provocations of Donald Trump and seek to maintain a healthy relationship with the American government. Mexico has to strengthen its domestic production and stop depending as much on the United States as it has been doing for years.January 19, 2017 at 10:07 pm #1472Tania MirandaGuest
As a young Mexican professional living in Washington D.C., five blocks away from the White House, these have certainly been interesting times for me. I am confident to say that I’m the epitome and representation of what the word bicultural means—and couldn’t be more lucky to be able to say so. And having experienced the best of both worlds (Mexico and the U.S.), but also knowing the ugly truths about both, I have come to understand the relevance of each to one another, and with or without NAFTA, with or without a Wall, I to my very guts believe this relevance is here to stay (whether the Trump administration likes it or not). Sentiments aside, however, some things will certainly change, whether I like it or not. And even though there is no reason to confront the new (and still uncertain) policies of the upcoming government head-on, before gauging whether the barking dog bites or not, I do think Mexico needs to be prepared with an offensive strategy.
In many aspects, like in the auto sector situation, or the renewable energy one, I think that the commercial imperative will prevail. Just like Trump defends the coal communities and jobs and minimizes the “clean energy revolution”, it is a FACT that, at least today, coal in the United States cannot economically compete with natural gas or even some renewable technologies, and there is not much he can do to stop the decommissioning of coal plants. Likewise, MANY American corporations have core interests and reasons to defend the trade relationship and plenty of links the U.S. has with Mexico. Whether it is investment coming in, or parts they are importing for final assembly of a good, or goods they are exporting for final sale in Mexico, businesses in the U.S. will have to speak up. And whether they succeed in defending their interests or not, it means that Mexico, and our dealmakers, and our people, are not alone this time in our lobbying efforts. It means Congress representatives and American lobbyists and American state and local politicians have hundreds of reasons to speak up in favor of many of the things that the Mexican government will be advocating for as well. And it will not be as easy for the Trump administration to disregard the voice of its own people.
Of course, the Trump administration may STILL disregard whomever it wants, as many times as it wants. They can open NAFTA for renegotiation. They can start building the wall. And they can start the deportation of millions of undocumented immigrants. So, unfortunately, Mexico’s government needs to be prepared for this, and enter the ring with its head up and gloves on. Because, unlike before, even if smaller of an economy, and of a military force, we have a LOT to bring to the table. We all (or anyone decently informed, I believe) know the numbers: American jobs that depend on trade with Mexico; FDI flowing south to north; U.S. manufacturers that depend on Mexican parts to finish their goods; percentage of youth in Mexico and retiring American population… The U.S.—not only Mexico—has also plenty to mourn were it to lose Mexico as the faithful neighbor and partner that it has been for long, and I haven’t even mentioned the topic of national security slash Central American immigration. If Mexico’s government plays it right, it has a lot to bargain with, and it shouldn’t be afraid to show its hand.
Lastly, I think it shouldn’t be left unsaid, there is a lot of untapped potential at home that we sometimes forget, that should maybe give us a tad more confidence when thinking about that gloomy future that is only a few hours away. Mexico is now a manufacturing powerhouse, has a growing highly-skilled population, and recently liberalized key markets that should bring in a flow of tech innovation and investment in upcoming years. With the right policies and adjustments, many new sectors will explode and help the country grow regardless of what the innombrable decides to do. I’m thinking internet apps that connect suppliers and consumers, distributed energy generation and smart meters, ecotourism, organic-foo foo restaurant experiences the burgeoning middle class is interested in, tailor-made apparel from internet-only stores and so many other start-ups that we have seen succeed in the United States and other developed countries.
Regardless, I welcome everyone to raise a tequila shot, or maybe a mezcal or a Pacifico, tomorrow when you’re done with work, and take a deep breath, because there is no doubt, “hemos salido de peores”…January 24, 2017 at 12:36 pm #1479Sergio De la CalleKeymaster
It’s difficult to have an optimism perspective for the future of the US-Mexico relationship.
In his inaugural speech, Trump called for a unified “civilized world” of which, under Trump’s point of view, Mexico isn’t part of. The US president has put Mexico in a group of countries that have benefited and abused from the US “kindness” (false).
Despite the US being the biggest winner (in the world!) of globalization and open markets, Donald Trump finds it easier to blame foreigners for the current challenges. Jack Ma, CEO of Alibaba, reminded the entire world that American companies made enormous profits and the only person to blame for not well spending the takings is the US government. Because, “in the past 30 years, America had 13 wars spending $14.2 trillion” and Wall Street lost $19.2 trillion in housing. He is right in pointing out that “no matter how good your strategy is, you’re supposed to spend money on your people” (Jack Ma. Davos 2017).
It is difficult to imagine Mexican negotiators convincing a protectionist and anti-Mexican US cabinet of the benefits of a close partnership. The US government does not see its future with Mexico, mainly because of racial issues. A Trump supervisor said that Canada has a “very special” status and it won’t be as targeted as Mexico with the negotiations.
Mexico is going to have to negotiate with diligence, protecting its interests above everything else. As mentioned above, Mexico is no “new kid on the block”, it is an economic powerhouse, with competitive advantages, and multiple FTAs. The Mexican government should look elsewhere, seek other partnerships where Mexico will have the respect it deserves. Because, in the end, PAX Americana is history.
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