Monday, February 13, 2017
Where will U.S.-Mexican Relations
Go in the Age of Trump?
By Allan Wall
Where will U.S.-Mexican relations go in the age of Donald
Trump, the newly-inaugurated President of the United States?
from his campaign statements and early actions as president, Trump’s policies on trade and immigration may differ greatly
from his predecessor, and there may be much friction between the U.S. and Mexico.
On the other hand, changes in these policies open new opportunities and ways of doing things that may actually be beneficial
The dizzying series of occurrences that has occurred since Trump became
president continues and makes it hard to keep up.
was the planned visit of Mexican President Enrique Peña Nieto to the White House on January 31st. This
trip was cancelled.
On the other hand, Mexican Foreign Minister Luis Videgaray
and Economics Minister Ildefonso Guajardo did visit Washington, and were reportedly in the White House in discussions when
Trump announced his wall project.
Trump is probably less popular than ever before in Mexico,
which is really saying something.
Peña Nieto is currently not too popular himself, but the conflict with Trump has probably given him a temporary lift.
It may not count for much in the long run however. Mexico
has presidential elections next year, so Peña Nieto may soon be a sort of lame duck.
Mexican presidents serve six-year terms, without reelection.
Although Peña Nieto is not running for reelection himself, his party wants to do well in 2018. So the president
is likely to try to keep a lid on things in the interests of his political party, the PRI (Partido Revolucionario Institucional).
Nevertheless, the winner of next year’s election, though it’s too early to tell, may be perennial leftist-populist
candidate Andres Manuel Lopez Obrador (known by his initial AMLO, nowadays coinage of a nickname).
As to the border wall, Trump’s insistence that Mexico should pay
for it is a little strange and unprecedented. It was an effective campaign chant, but really, why would
Mexico be required to pay for a wall put up by the United States?
Of course, there
are ways to get Mexico to pay, in a sense. One suggestion has been to garnish remittances sent by Mexican
undocumented aliens in the United States back to Mexico.
flow is a big one. CNN reports that, “Between January and November of 2016, US$24.6 billion flowed
back to the pockets of Mexicans from friends and relatives living overseas, according to Mexico's central bank.
That's even higher than what Mexico earns from its oil exports -- US$23.2 billion in 2015. And almost all of that
cash comes from the U.S.”
The latest estimate for Trump’s
border wall was about US$21 billion, which would mean that about a 10% deduction from the remittances for about twelve years
would pay for the wall.
However, if that occurred Mexicans might figure out other
ways to get their money back, like sending it with a person*.
Plus, if you think
about it, the remittance money is not Mexican-origin money anyway, it’s money paid by American employers which has been
paid to Mexicans.
So, in a way that would mean that American employers are paying for
the wall. On the other hand, it is money that now belongs to Mexicans, but it’s not Mexican government
The bottom line is that it’s not a good economic policy for
Mexico to depend so much on remittances.
Another proposal would be to charge more money (whether
you call it a tax or fee or tariff or whatever) on Mexican imports. That would affect American consumers
of those products.
Obviously, no Mexican president, of any party or persuasion, could
publicly commit to paying for a wall on the U.S. side of the border. That’s called political survival.
What about U.S.-Mexican trade and investment?
Trade is conducted under the rubric of the North American Free Trade Agreement. It’s a treaty
signed and approved by the governments of the U.S., Mexico and Canada.
Trump wants to renegotiate NAFTA, that opens a potential trilateral negotiation in which all three countries may push for
changes. Where will that end?
This is bigger, in other words,
than a campaign slogan.
So stay tuned, it should be interesting.
Note: On February 9th, I was a guest on
Silvio Canto, Jr.’s Canto Talk show and we discussed some of these issues. You can listen to the
note: Virtually all remittance amounts to Mexico cited in the media do not include money taken by individuals.
Allan Wall, an educator, resided in Mexico for many years. His website is located at http://www.allanwall.info.