Mexico Under Trump

For Mexico, the possibility -- however unlikely -- of a Trump presidency presents itself as a nightmare scenario since it directly threatens the two most critical dimensions of the bilateral relationship: immigration and trade.
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Republican presidential candidate Donald Trump speaks during a rally at JetSmart Aviation Services on Sunday, April 10, 2016, in Rochester, N.Y. (AP Photo/Mike Groll)
Republican presidential candidate Donald Trump speaks during a rally at JetSmart Aviation Services on Sunday, April 10, 2016, in Rochester, N.Y. (AP Photo/Mike Groll)

With just over half a year left before the U.S. presidential election, Mexico faces the ominous prospect of dealing with the most hostile U.S. administration to Mexican interests in over a century should Donald Trump make it to the White House. Although at the EIU we expect the billionaire/reality TV star to fall short of his aspirations in November, the fact that such a virulently anti-Mexican candidate can amass such a sizable following among the U.S. electorate upends the notion that broadly positive bilateral relations since World War II plus a quarter century of NAFTA would gradually displace the country's most radical attitudes on Mexico into the fringes of U.S. politics rather than pull them into the mainstream.

For Mexico, the possibility -- however unlikely -- of a Trump presidency presents itself as a nightmare scenario since it directly threatens the two most critical dimensions of the bilateral relationship: immigration and trade. But would it be as catastrophic as conventional wisdom suggests? There's reason to believe that for all his tough talk, the actual impact of some of Trump's most extreme promises may not be nearly as bad for Mexico as many fear since Mexico would not be entirely powerless to deal with them.

The immigration issue

Despite consistently lowering the bar as the months go by, Trump's most appalling comments in the campaign have been reserved towards immigrants, particularly Mexicans. During his speech where he announced his presidential bid, Trump infamously compared Mexicans to criminals and rapists and the barrage of racist vitriol has not eased since. One of the cornerstones of his immigration policy is that a border wall should be built (he may not have noticed that one already exists) and that the Mexican government should pay for it. Trump's comments have been condemned both by the administration of Enrique Peña Nieto as well as various former Mexican presidents, none of which was more eloquent than Vicente Fox who in less-than-diplomatic terms reiterated in a televised interview that Mexico was "not going to pay for his [expletive] wall".

Assuming that Trump gets his way and closes the border to a large volume of illegal traffic, will it really matter? The Republican frontrunner has perhaps failed to look at the statistics on net migration compiled by the Pew Research Centre which has shown that nowadays there are actually more Mexicans going back than they are going north, to the tune of 140,000 between 2009 and 2014. Various factors have contributed to this phenomenon, including better economic conditions back home compared to the last two decades, a more dangerous route to the border (mass kidnappings of Central American migrants have been a major source of financing for the Gulf Cartel and the Zetas), as well as widespread deportations from the U.S. even under the relatively immigrant-friendly Obama administration.

A hostile Trump administration, however, could clearly bring the negative net migration figure down further if he steps up deportations but its painfully obvious that his anti-Mexican rhetoric is a few decades behind the times: Mexicans and other Latinos are no longer finding their way across the Rio Grande or the Arizona desert by the hundreds of thousands. And a lot of the ones who did recently have no intention of staying. In the unlikely event that he gets to build a bigger wall (surely with U.S. rather than Mexican money), there might even be an unintended positive outcome: to reduce the flow of U.S.-made guns that are arming Mexico's violent cartels and which are doing far more damage to the livelihood of Mexicans than Mexican immigrants are to the prosperity of the U.S.

Trump has also threatened to use the provision of the Patriot Act to block remittances unless Mexico pays for the wall. This too can be challenged in courts that Trump will not control. What is clear from all of this is that Trump has forgotten what country he is seeking the presidency for. This is not Putin's Russia where the executive has near-absolute control of every aspect of policymaking. This is a (flawed) democracy whose checks and balances have - if anything - led to more gridlock rather than more authoritarianism. Repeating endlessly that he can "get things done" will not change this, particularly if Republicans fail to take control of Congress in November and the Supreme Court does not have a conservative bias.

Is NAFTA doomed? Probably not

Perhaps the most difficult element of Trump's rhetoric to decipher are his economic views, particularly those on trade. On one hand there is the natural tendency among radical conservatives to promote a nationalist, globalophobic economic agenda (the Tories pushing for Brexit on this side of the pond are not too dissimilar). Trump has already stated that he believes NAFTA has been "a disaster" and that he would renegotiate it or break it altogether if was president. This is not new: both Hillary Clinton and Obama suggested that they too would renegotiate NAFTA back in the 2008 campaign in an effort to raise their profile among rust-belt voters, but renegotiation is a broad term and can mean anything from just tweaking a few elements to sabotaging it completely. Trump looks to be more of advocate of the latter. For example, in order to preserve U.S. jobs Trump says he will levy a 35% tax on U.S. companies that relocate to Mexico in order to export to the U.S. market.

Behind Trump's anti-NAFTA talk, however, is a zero-sum view of economics that just doesn't sit with reality. Just before his "criminals and rapists" comment, Trump implied that the only benefactor of NAFTA was Mexico: "They're laughing at us, at our stupidity. They are beating us economically. They are not our friend, believe me. But they're killing us economically". Ironically, views on NAFTA's benefits may actually be worse south of the border. Unfortunately, the only survey taken simultaneously in both countries which analyzed free trade sentiment is a decade old (2006) but it showed a considerably lower share of Mexicans (50%) than Americans (75%) who believed free trade with the U.S. was beneficial to both countries. It is likely that the gap has narrowed since but it is worth noting that even the most "radical" of Mexican presidential candidates in recent memory, Andrés Manuel López Obrador, never proposed disbanding NAFTA when he was campaigning in 2006 and 2012.

But for all his anti-NAFTA tough talk, Trump has called himself "a free trader". As an entrepreneur, and as someone who presumably would seek to cater to the country's business elite, it seems almost absurd that he would follow up on dismantling a treaty that clearly benefits U.S. businesses greatly. However, that does not mean that he couldn't find ways to make life hard for Mexico. Even more NAFTA-friendly U.S. administrations, for example, delayed a provision to allow Mexican trucks to cross the border for two decades due to pressure from unions like the Teamsters. Implementation of spurious sanitation controls and environmental standards could also be easily misused as trade weapons and it would be hard to imagine Trump not trying to use these relatively simple measures as a first resort. But most cases, Mexico will be able to legally fight back and obtain compensation (such as by applying retaliatory tariffs) while the disputes are settled, even if it takes years.

Will NAFTA disappear? Probably not. Even Trump is unlikely to muster the political leverage to dismantle a treaty of this scale altogether. But a Trump administration could threaten the treaty's spirit, if he pushes for U.S. companies and workers gaining undue advantages over their Mexican counterparts. Mexico is not powerless against this although all it can hope for is that Trump realizes that a lose-lose scenario is not good for either side. According to a recent scenario analysis by Moody's Analytics, Trump's trade policies would indeed plunge both China and Mexico into recession. Unfortunately for The Donald, the U.S. would join them.

Does Mexico have any leverage?

Against a Trump administration set on a warpath on trade and immigration among other issues, Mexico nevertheless looks like it will be entirely on the defensive. Given the disparities in economic size (US GDP is over 13 times larger), let alone military power (it's not even close), Mexico has near zero direct political leverage against its northern neighbor outside of the diplomatic sphere. On that front, however, it would not be particularly difficult for Mexico to gain the sympathy vote given the near-universal rejection of Trump and his views abroad. A particularly harsh stance against Mexico would generate strong hostility against the Trump administration even from key U.S. allies and if Mexico plays its cards right, it can use this sentiment as a buffer against the worst that Trump can dish out.

A riskier but possibly more effective strategy would be to mobilize the sizeable community of Mexicans living in the U.S. and Mexican-Americans which together amount to over 30 million people. Mexico's consular network in the U.S. is the largest of any country in another's territory (50 consulates from Alaska to Florida) and below official channels is a vast array of grassroots organizations that could play a part in mobilizing public opinion within the U.S. against Trump's most radical policies. The risk, of course, is that this would bring up accusations of political interference by Mexico in U.S. affairs, eliciting an even more hostile response by the Trump government. Given the history of U.S. meddling in Mexican policymaking this would be a somewhat hypocritical indictment, but not one that will likely matter to Trump especially given the disparity of power between the two countries.

Trump the bully or the pragmatist?

Can Mexico work with Trump? This will all depend on which one of the two Trumps ends up in the White House. An ideal scenario (but by no means the guaranteed one) sees the pragmatist businessman who was media savvy enough to know how to sway the masses of angry white working-class voters but who has no intention of seriously following through with his more asinine proposals. He will never be a friend of Mexico, but could yet escape the label of enemy. Trump the bully, however, will mean four (hopefully no more) very difficult years for Mexico, ones in which Mexican diplomacy will have its hands full against an overbearing giant which will have no intention of playing the "good neighbor".

But despite the risk, Trump's unpredictability may be Mexico's best fortune. The alternative, after all, is Ted Cruz who with softer words stands for many of the same policies as Trump but with religious zeal to back them up.

Here's hoping neither make it to the White House.

Al loco y al malo, dales la razón y quítales el palo.

Follow the author @raguileramx

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