A Trump Worst Case Scenario: Why Mexico Would Pay for the Wall

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On September 16th, Independence Day, the Mexican Air Force symbolically retired its few remaining F-5 fighters after over three decades of front-line service. The F-5 was a Vietnam-era budget aircraft, designed for export to US client states in the third world to compete with cheap Soviet models, and was already obsolete in 1982 when it entered service with the Mexican Air Force, let alone in 2016. The fact that Mexico is currently without a single combat aircraft as the US election nears is a microcosm of the country's general unpreparedness towards a possible Donald Trump presidency, the consequences which could be economically devastating and politically humiliating.

Bad neighbor

A Trump presidency north of the border would result in the most hostile US administration towards Mexican interests in a century. Not only has Trump campaigned on a platform of xenophobia towards Mexicans and Hispanics in general, he has vowed to renegotiate the North American Free Trade Agreement (NAFTA) which since the 1990s has been the centerpiece of the US-Mexican economic relationship - the US accounts for about 80% of Mexican exports and half of its imports, and in recent years Mexico has overtaken China as the US's second largest trade partner after Canada. Additionally, one of Trump's most outlandish policies has been to build a border wall with Mexico, with the expectation that Mexico would pay for it. Trump has hinted that he would be willing to use military force to make Mexico do so ("when I rejuvenate our military, Mexico's not going to be playing with us with war").

The US-Mexican relationship has had a turbulent history. Until Franklin D. Roosevelt (1933-1945) implemented a "good neighbor" policy towards Latin America in the context of the Great Depression and World War II, the threat of conflict with the US had been ever present. A disastrous war in 1846-48 resulted in Mexico ceding half its territory; the US also briefly occupied Veracruz and Tampico during the Mexican Revolution in the 1910s. The last invasion came in 1916, after the US launched an expeditionary force to find and capture revolutionary Pancho Villa following a border raid into the US (the last time a foreign army has stepped on US territory). The expedition failed, but highlighted Mexico's embarrassing weakness against its northern neighbor. After Roosevelt, however, a more pragmatic relationship emerged. The threat of armed conflict dissipated and although Mexico never fully sided with the US during the Cold War, it began receiving the benefits of proximity to the world's largest economy through increased trade and investment, both of which skyrocketed after NAFTA was implemented in 1994. Another benefit to Mexico is that is has largely escaped criticism from the US over its less than stellar record on the rule of law, human rights, and good governance. Good neighbors rarely point out their flaws.

Mutually assured recession?

If the prospect of a return to pre-Roosevelt hostility appears inconceivable, it is because we have now become so accustomed to a constructive and increasingly inter-dependent relationship between the two countries. But make no mistake: Trump's threats are potentially real, and Mexico would be powerless to prevent them. By far the worst would be the implementation of protectionist trade measures. Although NAFTA has effective dispute resolution mechanisms and allows for retaliatory actions, the resulting trade war would damage both economies but Mexico would be hit harder given its greater economic dependency on the US; a recession would be almost inevitable. The hope in this situation would be that the consequences to the US economy would be severe enough that the Trump administration realizes its mistake and backtracks on his trade policies. Backtracking is not something Trump is prone to so it's possible that Mexico would have to wait until 2020 before expecting a return to the economic status quo. Admittedly, this is still a worst case scenario within a worst case scenario; the US still retains strong checks and balances that we believe will prevent him from going through with his most extreme proposals. But it should not be a comforting thought to Mexico's government that it will have so little leverage over how much damage Trump could inflict.

More humiliating to the Mexican government would be that it be coerced into building the wall (if built). Even without resorting to military force, the US has numerous ways in which it could arm twist the Mexican government into acceding to such a demand, and the most effective could possibly be the threat of revealing the dirty laundry of Mexico's political establishment that US intelligence agencies are highly likely to possess, such as links to drug cartels or corruption (Mexico strongly depends on US intelligence for its drug war, conceivably the US only shares what it needs to share). The administration of Enrique Peña Nieto itself has already been hit by near chronic scandals since the "Casa Blanca" real estate case of 2014 and Peña Nieto currently has the lowest popularity of any standing Mexican president in recent memory, mostly because of his lax attitude towards corruption and the rule of law. The government and the ruling PRI can ill afford further scandals and a Trump administration would be keen on exploiting this. Whether Peña Nieto could survive the embarrassment of financing a border wall (after openly claiming he wouldn't) is another question; if the public outcry over his submission to Trump becomes so overwhelming, it is not far-fetched to imagine that he could go down as the first modern Mexican president to be forced out of office.

Soul searching

Although the polls have tightened, conventional wisdom suggests that Trump will not win (Hillary Clinton retains key advantages in the electoral college race). However, US politics will continue to suffer the fallout from the Trump campaign for years to come. Although Mexico's political establishment will breathe a huge sigh of relief on November 8th if the election goes Clinton's way, it cannot remain unprepared at the possibility of a hostile, populist right-wing government taking power in the US in the future. This could include rethinking the country's security strategy beyond police duties (which is essentially what the war against the drug cartels is) to taking territorial defense seriously, maximizing its ability to directly influence the huge Mexican-American community in the US (there are over 30 million people of Mexican descent in the US), and gradually diversifying its economy into other markets to reduce the damage of any threat to NAFTA.

These are long-term goals, beyond the scope of what Mexican administrations typically plan for (rarely beyond their six years in office). The risk is that even if Trump loses next Tuesday (still the most likely outcome), the country will remain equally passive and equally unprepared if radicalism ever takes root north of the Rio Grande.

Follow the author @raguileramx