The Chinese ambassador is meeting with Andres Manuel Lopez Obrador, Mexico’s president-elect. It would seem like just another one of the meetings that the president-elect has had in the past month. However, the consequences of this meeting will reach much further than the commercial future of two nations. Here in Mexico City, the next administration sketched the first outlines of their trade relationship with the Asian country. Meanwhile, in Washington, the Mexican delegation was stepping up renegotiations of the North American Free Trade Agreement with the United States. And the outlook could be optimistic: Mexico is firming up trade deals in the world, but there is danger in doing it on the same day and with two nations who oppose each other.
Donald Trump has devoted his term to drawing battle lines all over the place. Issues of immigration, the military, nuclear weapons, climate change and, of course, trade. Threats to local corporations that announce investment in other countries. Tariffs here and there under the argument of injustices done through treaties signed by previous administrations. With China, a country with accelerating economic growth, the U.S. has found a perfect target for their commercial pressure. Just yesterday, Trump requested that tariffs on Chinese products increase from 10 to 20 percent. This represents $200 billion. Although not an order, it is a way of threatening that country, especially when the 10 percent that’s already in force was announced less than a month ago. This is not only to “do justice” to the trade deficit that China has with the U.S., as the president alleges, but also because for several years our neighbor to the north has had its eyes fixed on the Asian country. That rapid growth has not made such a good impression.
Let’s not forget, for example, that before the fall of the Mexico-Queretaro high-speed rail project, the corruption scandals that resulted in the cancellation of this multibillion-dollar bidding process were first exposed in the U.S. media. Barack Obama was still president. The U.S. railroad industry reacted to a $58 billion investment in the hands of a foreign railroad industry, hands that would not be American. Since then, China and Mexico have slowed down a commercial engine that seemed to be running at maximum speed. But the Lopez Obrador administration has begun a reconciliation with China, which is not a bad idea. However, this is starting while NAFTA renegotiations continue.
We have been told that we could have a trilateral agreement on NAFTA by the end of August. Yesterday, Ildefonso Guajardo Villarreal, the incumbent secretary of the economy, affirmed that, in spite of what Trump has said, the trilateral nature of the treaty will continue. We will see when it’s all over.
However, it needs to be pointed out that Lopez Obrador signaled yesterday (Aug. 2) that he has not received an acknowledgment. Perhaps it is the flanking maneuver between the incoming and the outgoing administrations, the administrations of Lopez Obrador and Enrique Pena Nieto, the administration of Secretary of Foreign Affairs Luis Videgaray Caso and that of Jesus Seade, lead NAFTA negotiator for Mexico, which will finally twist Trump’s arm. We don’t know; we can only hope, at least, that this is the strategy. it is not that we expect an incendiary tweet, but it is clear in the negotiations in Washington, that, for Mexico, it is not only important to maintain a treaty with its principal trading partner, but also important to build bridges that point in other directions. Without conditions. The U.S. has the right to negotiate as best they please; Mexico has the right to do the same. It is a dangerous game that the current president and the president-elect seem to be running, yes, but also a necessary one. As the U.S. seeks to reduce its trade deficit with some countries such as ours, and certainly China, Mexico can, and must, also do this and take advantage of the U.S. government’s rush to get the treaty out before its midterm elections. Relations with both countries cannot be conditioned by anybody. These are business deals. Trump knows that better than anyone. However, what he does not know is how to make policy, and at times (even if only sometimes) that turns out well for Mexicans. Let’s hope that’s the case.