Mexico’s marriage with the US on the rocks

Mexico’s marriage with the US on the rocks

By Luke Vargas   
Published
Mexican President Enrique Peña Nieto and U.S. President Donald Trump have clashed.
Mexican President Enrique Peña Nieto and U.S. President Donald Trump have clashed.

The following is the first article in a three-part series examining the United States-Mexico relationship.

MEXICO CITY – Mexico’s decades-long cozy relationship with the United States is on shaky ground.

In a matter of months, trusting allies became suspicious neighbors. Pressed by tense citizens on both sides of the border, American and Mexican politicians are saying and doing things that threaten to upset a financial lifeline upon which they both rely.

Anti-U.S. sentiment – near-record lows last year  now hovers close to 50 percent. Mexican newspapers are filled each day with editorials slamming President Donald Trump and calling on Mexican President Enrique Peña Nieto to grow a spine and respond aggressively to Washington’s attacks.

Even the Mexican Catholic Church penned a frantic letter calling for swift government action to react to Trump’s policies, lest a wave of deportees arrive in a country ill-equipped to absorb them.

Before considering the consequences of souring ties between the United States and Mexico, it’s worth reviewing the U.S.-Mexico relationship.

On the surface, things were heading in the right direction.

Decades of economic growth in Mexico had allowed millions to enter a burgeoning middle class. American corporations were beginning to take advantage of that consumer base, with brands as diverse as Walmart and Starbucks reaping the rewards of a dynamic, stable economy that integrated easily into existing supply chains.

Improved Mexican infrastructure, trade facilities and customs cooperation had made life easier for companies sending goods in both directions. Price savings were passed along to American consumers, who were enjoying cheaper, higher-quality Mexican products.

Mexican schools were adapting to teach new skills necessary to train technicians and engineers capable of overseeing a high-tech production economy. And in key economic hubs, private sector players had helped finance investment and clean up (or help bypass) corrupt or ineffective government structures.

In a normal political climate those positive trends would offer a strong foundation for further improvement.

The Mexican government released this Jan. 8, 2016 mugshot of drug lord Joaquin “El Chapo” Guzman. He had just been recaptured after escaping from prison again. He was extradicted to the United States Jan. 19, 2017.

Mexican law enforcement officials were eager to build on a string of successful cross-border operations and high-profile arrests, including that of cartel leader El Chapo, reportedly enabled by enhanced intelligence sharing. He soon escaped from a Mexican prison in February 2014 then again in July 2015 before being recaptured in January 2016 and subsequently extradited to the United States.  Even as cartel violence rages on in various Mexican states, with journalists frequently slaughtered or threatened and mass graves discovered on a regular basis, the tools appeared to be in place to tackle persistent and evolving challenges.

Businesses in both countries also looked forward to the prospect of an immigration reform push in Washington that would strengthen international supply chains by adding certainty to the labor market. The Trans-Pacific Partnership (TPP) trade deal was poised to bind the two economies even tighter.

But Trump’s words have cast doubt on whether any of that once-likely progress will occur, and the growing consensus in Mexico is that a U.S. retreat from Mexico, no matter how incremental, only spells bad news. 

‘The two most intertwined countries on earth’

Agustín Barrios Gómez is a former senator from Mexico City and a de facto spokesman to U.S. media and business audiences in recent years.

World Trade Center in Mexico City (Daniel Manrique/WikiMedia Commons)

“There’s no replacing U.S. as an exporter, or Mexico as an importer,” he told TMN over diet Cokes near his office in Mexico City’s swanky Lomas Virreyes financial district. “Mexico and the U.S. are the two most intertwined countries on earth. To make enemies of these countries for nothing makes no sense.”

Mexican elites, many of whom travel regularly between the two countries and have raised bilingual families, now question whether the United States may be cut out of their personal and financial futures. Though the majority of them admit the North American Free Trade Agreement (NAFTA) could use renegotiation, they’re at a loss to understand why Trump has led a crusade against a country whose cheap manufactures and waves of exported labor helped fuel decades of American growth.

“Mexico and the U.S. are like conjoined twins,” explained Carlos Ross, director of the Center for Global Innovation and Entrepreneurship in the northern manufacturing hub of Monterrey.

The benefits of closer ties are known best by those who’ve seen them firsthand. U.S. polls link people living nearest to the border with stronger opposition to Trump’s proposed border wall.

Everyone has their own phase to describe the U.S.-Mexico bond.

“In this marriage, the loyalty to protect the relationship is not there,” said Ricardo Homs, founder of the Ries & Ries Latinoamerica brand consulting group.

Mexico can respond to shifting U.S. policies, Homs contended, but it’s Trump’s tone that it can’t tolerate. 

“The attitude of Trump is offensive to us. Mexicans are a very sensitive people,” Homs said.

Trump wasted no time thumbing his nose at Mexico, using his June 2015 campaign launch in 2015 to accuse the country of exporting its drugs, crime and “rapists” to the United States.

“Some, I assume, are good people,” he added in a further burst of condescension.

Mexico ramps up deportations of Central Americans

In the run-up to the 2016 U.S. election, Mexico believed it was doing right by the United States, having dialed up deportations of Central American migrants using Mexico as a land bridge to the United States.

“Mexico has contributed a lot to the U.S. in terms of cooperation on security, terrorism, drug trafficking and recently, looking at Central American migration,” said Maureen Meyer, Senior Associate for Mexico at the Washington Office on Latin America.

Through the first half of 2016, Mexico deported some 90 percent of Central American migrants back to their home countries, with the total number of deportations in the hundreds of thousands.

“In a sense, Mexico did the U.S.’s bidding in stopping Central Americans from reaching our border,” Meyer said. “The government is hoping that that is recognized and they are able to establish a relationship that continues to be based on mutual respect and cooperation.”

Instead of blaming Central American violence – not the Mexican government  for immigration to the United States, Trump’s hostile rhetoric toward Mexico has added insult to injury.

By deporting Central Americans, Mexico soured relations with its neighbors and sparked protest from human rights experts who increasingly see Central American organized crime as such a grave risk that it qualifies many migrants as refugees.

Even after a face-to-face visit with Nieto – in which the Mexican leader presumably outlined Mexico’s efforts to Trump – the then-president-elect reportedly told him via phone that, “you have a bunch of bad hombres down there. You aren’t doing enough to stop them.”

Spurned by their erstwhile ally, some Mexicans see Trump’s rejection as a moment for the country to set its eyes beyond its immediate neighborhood.

“Trump did a favor for us. We understand now that we must look to the rest of the world,” Homs said. “Fortunately, the rest of the world sees Mexico as the victim.”

That may be true – Trump’s combative tone toward America’s longtime allies is raising eyebrows, to be sure – but Mexican hubris masks deep insecurities about its own future.

“I’m with Trump! I want the wall,” a leading columnist opined last week. “It’s clear that if we close the border tightly and Americans can not consume narcotics imported from Mexico and Colombia, they would be the first to try to tear down the wall in search of the damn white powder. Let’s build it with reinforced concrete!”

‘The Trump factor’ affects economy

Cut past the sarcasm and there’s little good news to speak of.

“The Trump factor is the principal cause of our worries,” the celebrated journalist José Cárdenas assessed in the wake of a grim economic outlook published by the Bank of Mexico earlier this month.

Growth figures this year have already been slashed, and the bank said U.S. policies had already shaken “consumer and business confidence, foreign direct investment and remittances to Mexico, as well as souring relations.”

Trump’s proposed Border Adjustment Tax on Mexican exports and executive orders to force American businesses to shut down their factories south of the border could worsen that outlook even more.

According to Wilson Center statistics, the jobs of as many as 5 million Americans depend on trade with Mexico, and the numbers are even greater south of the border.

“If some of these measures materialize the exit of capital invested in Mexico would be inevitable,” Cárdenas said, “and the impact – at least initially  would be devastating for the economy and the country.”

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