Slow-Moving NAFTA Talks Could Be Further Hampered by Mexico's Next President
With NAFTA negotiations finally progressing a bit, now would be the perfect time for something to bring up another potential hurdle and ruffle everyone’s feathers. This time, the prospective cataclysm stems from Mexico, and has manifested itself as one man — presidential frontrunner Andres Manuel Lopez Obrador, known colloquially as “AMLO.”
Business interests and NAFTA advocates are fearful the leftist candidate could chuck a wrench into the trade policy by adopting a hardline stance opposing the White House’s plan to redefine the agreement to favor the United States. Lopez Obrador is a long-time proponent of social programs that help vulnerable members of society. However, many criticize him for being a populist with socialist ideals that do not serve the financial well-being of the country at large.
While this is debatable, winning Mexico’s July 1st election could see him push back hard against U.S. trade proposals, stalling progress.
Thus far, Lopez Obrador has made a few promises after accepting the nomination by the Morena party last week. These include implementing widespread austerity measures for Mexico, subsidizing its farmers, and ending gasoline and diesel imports from the United States. The hope is to make the country more self-sufficient in terms of food and energy, but critics have accused the promises of being the tip of a protectionist-shaped iceberg.
Further complicating things is a fairly consistent belief that Lopez Obrador has an anti-American bent and is strongly adverse to trade. There is certainly past evidence to support these claims, and there is also plenty that refutes it. That’s especially true of late. Since putting in his presidential bid, ALMO has said he wants to establish a harmonious relationship with the U.S.
“When we work together, everyone wins. But in confrontation, the United States and Mexico will both lose,” he explained last May. But he simultaneously accused the Trump administration of xenophobia and racism, casting some doubt over his ability to work with Washington pragmatically.
One thing is certain, however. If Lopez Obrador wins, he has said he’d like to negotiate NAFTA himself. This has North American businesses supremely concerned, as nobody knows exactly what he wants to see from it. Meanwhile, Ricardo Anaya of the National Action Party is seen as a safer bet — and far less likely to shake up trade. Currently, Anaya is polling just behind Lopez Obrado in the national election. Jose Antonio Meade, the former finance minister for the ruling Institutional Revolutionary Party, also supports free trade and plenty of foreign investment. He’s lost ground to both candidates since the start of this year.
Fortunately, Lopez Obrado seems to understand there is a lot riding on NAFTA. Placing Mexico’s automotive industry at risk doesn’t appear to be something he takes lightly. Last week, he said he wanted to meet with international business leaders to better understand how to adopt policies to help move the country forward.
“It’s becoming increasingly clear that he believes NAFTA has been positive for Mexico, or at the very least that a withdrawal from NAFTA would be incredibly harmful for him and the country,” Duncan Wood, director of the Mexico Institute at the Wilson Center in Washington, told Automotive News in an interview.
Wood also understands that Lopez Obrado is still a bit of a wild card, and that’s making plenty of people in the business community very nervous. “I think there’s an enormous amount of confusion out there about which is the real AMLO,” he said. “And I think he is being deliberately ambiguous on a lot of these issues.”
The potential threat Lopez Obrado poses to NAFTA is a long way off. Even if he does win the election, Mexico’s next president won’t be inaugurated until December. Negotiations could be done by then. Then again, the painfully slow progress of talks will certainly push things well past the initial March deadline. Experts now suggest real headway may not be made until the middle of summer at the earliest, claiming it would be absolutely feasible to see trade negotiations continuing into next year.
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