AMLO tests the relationship with the United States – El Financiero

On the one hand: uncontrolled migration, security threats and an increase in drug and weapons trafficking. On the other, rapid economic integration, political cooperation and deepening cultural and social ties.

The 200-year relationship between Mexico and the United States is evolving, like that of two brothers in an unstable but loving family, sometimes unable to solve their mutual problems, but also aware of their common history, their shared potential and their indivisible future.

The political impact caused by the recent general elections in Mexico, in which the ruling party captured what is in effect a supermajority in Congress, together with the upcoming November elections in the United States, will open a new phase in the link between these great business partners. And, as things stand, we are likely to see more fireworks and acrimony than the mutual understanding and conciliatory approach of recent years.

Yes, this has to do with the possible return of Donald Trump to the White House, but also with some changing dynamics within the United States, especially regarding migration. According to an April Gallup poll, Americans cited immigration as the country's most important issue for the third consecutive month; It also ranked as the most politically polarizing issue in the United States in the last 25 years.

The images of thousands of Cubans, Venezuelans, Central Americans and others crossing the border into the United States daily have intensified anti-immigration sentiment, reinforcing Trump's candidacy and putting pressure on President Joe Biden's government to control the border before the elections on 5 of November.

Under Biden, the United States has adopted a more constructive and patient approach toward the Mexican government, to the point that various commentators have raised an implicit quid pro quo: the White House will overlook the protectionist and antidemocratic tendencies of President Andrés Manuel López Obrador as long as Mexico does more to secure its borders and crack down on migrants coming north.

This construct has always seemed shortsighted to me. It does not take into account the complexity of a relationship between two countries that share a border of more than 3 thousand kilometers and bilateral trade of 800 billion dollars. In fact, the idea that Uncle Sam can simply order what Mexico has to do is a vestige of a past that will not return.

Nor does it reflect how diplomacy works in 2024. After Trump's threats against Mexico during the 2016 campaign and his decision, once in power, to link migration to economic issues, the US government's determination to treat your neighbor as an equal partner is refreshing. And given its own democratic shortcomings, Washington is currently in no position to pontificate to anyone about political norms and legality.

At the same time, it is true that in certain aspects—such as the United States' complaints about AMLO's nationalist energy policies—Biden sought a political negotiation rather than forcing a technical arbitration that could have ended in multibillion-dollar losses for Mexico. But, again, finding the right balance between putting pressure and avoiding destabilizing your neighbor is not very easy.

What should concern observers on both sides of the border now is how migration continues to overshadow the many positive aspects of the bilateral partnership. As my colleagues Maya Averbuch and Josh Wingrove pointed out, Claudia Sheinbaum had been president-elect of Mexico for just a few hours when the White House published an executive order limiting asylum applications at the southern border of the United States, the most drastic measure against immigration. adopted by the Biden Administration to date. Welcome, president!

The impact of AMLO's sweeping constitutional reforms adds another layer of complication. Although we likely won't know the final format and scope of these changes until his term ends in September, AMLO's current plan involves a significant reconfiguration of Mexico's legal framework.

This has to do not only with the ill-advised judicial reform, which is more of a power grab against Mexico's supreme court than an honest attempt to solve the country's long-standing problems with the judiciary. It also involves enshrining in the Constitution nationalist policies for industries such as mining, corn and electricity, and the closure of autonomous regulatory bodies.

As Diego Marroquín, North America researcher at the Wilson Center in Washington, told me, “this series of reforms could conflict with the USMCA treaty and make it more complicated to invest in Mexico. Once it is agreed to liberalize the market, there is no going back. “What the Government is doing with this is imposing more restrictions on trade and investment.”

Of course, Mexico has the sovereign right to decide on its policies, and Mexicans voted overwhelmingly for AMLO's ruling party during a fair election. But that does not mean that the new configuration of power will not have an impact on business and political decisions.

For now, the US government has only addressed the issue in mild terms, with Undersecretary of State for Western Hemisphere Affairs Brian Nichols saying that “judicial transparency is vital for all investors” and that his government “will continue to insisting” that the T-MEC partners “respect the protection of foreign investment provisions.” That rhetoric is set to intensify as we approach November.

The reality is that the Mexico that Sheinbaum will take office on October 1 will have an extreme concentration of power, and the Government will be able to control Congress through the legislative supermajority and the supreme court after the forced renewal next year, significantly reducing the checks and balances. .

I don't know to what extent, but in the calculations that any company makes on possible investments, the expected rate of return for any project in Mexico will have to take this added risk into account. And, fair or not, the idea in some circles in the United States that Mexico is becoming an autocracy will only gain strength, taking the relationship further down a dark path.

The review of the T-MEC trade agreement is scheduled for 2026, and you can see how Mexico could quickly lose its perceived advantage over the White House. It is a matter of time before the United States decides to pivot and make bilateral trade more dependent on fixing migration — which could hit Chinese investment in Mexico — or, in an extreme case, restrict access to supplies of American natural gas that Mexico needs so much.

During the campaign, Sheinbaum highlighted the importance of expanding Mexico's economic integration with the United States (taking advantage of the supply chain offshoring process known as nearshoring). But those gigantic investments necessary for Mexico to accelerate its growth rate will not materialize in the face of political uncertainty.

For both the United States and Mexico, it is crucial to focus on positive ends. A safe, prosperous and stable Mexico should be one of the United States' top national security priorities. But for this to happen, Mexico also needs to remember that it shares its North American home with two brothers.