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July 9, 2020

MEXICO: Plenty to lose from AMLOve policy

BY Nicholas Watson

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President Andres Manuel Lopez Obrador (AMLO) returns to Mexico today, 9 July, following his meeting yesterday with US President Donald Trump in Washington DC. AMLO, who made the trip ostensibly to mark the new United States-Mexico-Canada trade agreement (USMCA, or T-MEC as it is known in Mexico) that came into effect on 1 July, was effusive in his praise for Trump. In their joint press conference, both leaders avoided the many hazards and controversies that punctuate bilateral relations and went out of their way to emphasize their friendship.

On the face of it and in the short-term, AMLO’s gamble may have paid off. AMLO apparently has Trump on his side. AMLO can also present the USMCA as a motor for economic recovery. The visit will also provide welcome distraction from domestic troubles: AMLO’s mismanagement of the Covid-19 pandemic; a hurting economy; and worsening security problems. The challenge is that all these apparent gains could prove to be fleeting and/or exaggerated.

  • There is no guarantee that Trump will remain so friendly towards either Mexico or AMLO given some of his 2016 campaign rhetoric. The bilateral agenda is a minefield of delicate issues, including the border wall, security cooperation, and migration enforcement – any of which could crop up in this year’s US election campaign. Migration-related controversy could be imminent if Trump resubmits paperwork to terminate the Deferred Action for Childhood Arrivals (DACA) program. Add to that possible new tensions arising from monitoring provisions contained in the USMCA.
  • The USMCA, while undoubtedly positive, is not that different to the old North American Free Trade Agreement (NAFTA), and is therefore unlikely to be a miracle cure for the ailing Mexican economy. According to the Central Bank (Banxico)’s most recent survey of local economists, carried out in late June, the economy will likely contract by 8.9% in 2020, with a rebound of only 2.79% next year – which is hardly indicative of a USMCA bounce.
  • It is unlikely that AMLO’s visit will provide a durable distraction from the economic situation, or from his other domestic difficulties, the most pressing of which is Covid-19. Mexico – where testing remains extremely limited – now has the eighth highest number of Covid-19 cases and fifth highest number of deaths in the world.

Above all, the visit once again raises questions about AMLO’s naivety in international affairs, while demonstrating the asymmetric nature of US-Mexico relations. By visiting Washington DC so close to its electoral season, AMLO has broken the so-called “golden rule” of Mexican diplomacy: to avoid being seen to take sides in US politics. This puts AMLO in an awkward position vis-à-vis US Democrats, which would necessitate some urgent bridge-building should Joe Biden end up defeating Trump in November.

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