Tuesday’s “ presidential debate ” between Donald Trump and Joe Biden confirmed that Mexico is still absent from the United States electoral campaign and that is good news for our country.
Amidst the comedy of shouting and insults that the Republican and Democrat sustained in Cleveland , Mexico’s name was barely heard once, when Biden wanted to stress that the U.S. trade deficit with China and its southern neighbor is higher than ever.
However, that does not mean that Mexico is out of the plans of both candidates for the White House . The difference is that so far it has not been used by Trump's populist discourse to highlight his meager foreign policy achievements, such as the border wall , the curb on immigration , and the renegotiation of the North American trade agreement .
Historically, the bipartisan consensus in Washington regarding Mexico revolved around trade and the fight against drug trafficking and illegal immigration . The variations were the weight that each candidate gave to each of these issues, as occurred in 1996 with Republican Bob Dole and his hard-line blaming Mexico for the insatiable consumption of narcotics in the United States.
At the time, the priority of PRI governments in Mexico City was to prevent the country from being submitted to “ Mexico bashing ” in U.S. election campaigns , affecting migrant communities and bilateral collaboration, as also happened in 1994 with Governor Pete Wilson and his xenophobic Proposition 187 in California.
The now sick COVID-19 Trump was the exception, turning Mexico into what some observers have rightly called the “ electoral piñata ” of 2016. He built his platform around the border wall and the racist tendencies that had been consolidating for years ( George W. Bush started the barrier in his first term) and strengthened it with indiscriminate attacks on immigrants and drug issues.
The excesses of Trump and the Republicans— Ben Carson , another presidential hopeful and now Secretary of Housing, called for “ bombing the caves ” where undocumented immigrants “hide”—were also the setting for broader protectionist threats. Hillary Clinton , her failed Democratic rival, also raised the need to renegotiate the North American Free Trade Agreement ( NAFTA ).
In the logic of NAFTA and the globalized neoliberal economy, the fluctuation of the Mexican peso became a campaign thermometer. Thus, on October 19, 2016, during the third and last debate between Trump and Clinton in Las Vegas, our national currency depreciated while Trump achieved one of his best performances by emphasizing his plans to deport “ bad hombres ” and alluding to his rival as a “nasty woman”. It then ended up with a rally, as opinion spread that Clinton had won the match.
A month earlier, the peso had collapsed to its lowest level versus the U.S. dollar at nearly 20 to one since Clinton fell ill, yet also because of the state of Mexico's public finances, low oil prices, Brexit, and the possibility of a rise in U.S. interest rates. Even speculators predicted that Trump’s victory would sink the peso up to 29 to the dollar.
Things were similar in Canada, which directed 75% of its exports to the U.S. As expert Gordon Laxer summarized in a University of Alberta study, protectionism was not only promoted by Trump. “Populist pressures from ordinary Americans feeling the pain of globalization and deindustrialization demand it,” he underlined.
The peso story repeats itself
Four years later, at least on the financial side, history repeats itself. EL UNIVERSAL reported Wednesday that at the end of the clash between Trump and Biden the peso stood at 22.35 to the dollar, with a gain of 11 cents that would be “related to the perception of market participants that the Democrat won.”
Given the volatility of Trump, it is possible that the issue of Mexico will jump up at any time in the remaining discussions with his opponent scheduled before the Republican’s infection was announced yesterday for October 15 in Miami , and October 22 in Nashville . Beyond the conjuncture , nevertheless, the government of President Andrés Manuel López Obrador ( AMLO ) should prepare for a series of complicated scenarios in 2021 due to the beginning of a Democratic administration or the second Trump period that will have as priorities to control the coronavirus pandemic and start economic recovery.
After the renegotiation of NAFTA , the now called United States-Mexico-Canada Agreement ( USMCA ) includes provisions by which dispute panels can be established for alleged labor law violations that can become a tool of pressure and protectionism for Washington.
Earlier last month, the AFL-CIO announced that it is working with the U.S. Trade Representative to file labor complaints against Mexico using in one case the Facility-Specific Rapid Response Labor Mechanism that could halt exports from factories found in violation of labor rights provisions.
Richard Trumka, leader of the U.S. trade union federation, told The Christian Science Monitor the case is related to the detention of Mexican labor attorney and activist Susana Prieto Terrazas in the state of Tamaulipas , as well as the harassment over other labor organizers.
Prieto, who helped organize unprecedented strikes at dozens of manufacturing plants in 2019, was arrested in the border city of Matamoros in June and charged with threats, inciting a riot, coercion, and crimes against public servants. She denied the charges and was released on July 1, the day the USMCA took effect, yet a judge banned her from entering Tamaulipas, home to numerous factories in the U.S.-Mexico supply chain.
“We have tremendous concerns with Mexico’s ability to enforce their laws,” Trumka underscored. The AFL-CIO is concerned, he said, that the U.S. Labor Department has been slow to disburse funds agreed upon in the USMCA deal to help Mexico strengthen its labor enforcement capacity.
In this context, the question arises: How would the White House in turn react to the possibility of an energy counter-reform that would limit private capital in the oil and electric sectors as AMLO has already raised?
If it can be viewed as a first sign, the Investment Climate report issued by the Department of State in September indicated that “recent regulatory changes have created doubts about the investment climate, particularly in the energy sector.”
Mexico’s government “has made some regulatory and policy changes that favor [ state-run oil company ] Pemex and [ Federal Electricity Commission ] CFE over private participants.” The changes, it detailed, have led private companies to file lawsuits in Mexican courts and several are considering international arbitration.
Regarding the legal regime, the document says that the Mexican administration “has eroded autonomy and publicly questioned the value” of antitrust and energy regulators. Analysts opined that the Federal Economic Competition Commission “has lost influence as the current administration enacted regulatory changes in the electricity sector that favor state-owned enterprises over maintaining competitive prices for the consumer.”
On the other side of the U.S. political spectrum, AMLO's reformism has long since ceased to raise positive expectations. “AMLO and his Morena party has come to power falsely, claiming themselves to be friends of the working class yet in reality what are the conditions in Mexico ; some 50% of the population is reliant upon the gig economy,” affirmed Norissa Santa Cruz, Vice-Presidential candidate of the Socialist Equality Party (SEP).
Responding to a question from EL UNIVERSAL in English during a video broadcast discussion, Santa Cruz expressed that the Mexican federal government’s stance on immigration has been “upholding the line and the policies of the Trump administration .” It is acting as a “sort of layer of defense to prevent desperate immigrants who are fleeing and seeking asylum in the United States from crossing the U.S.-Mexico border.”
While SEP’s Presidential candidate Joseph Kishore pointed out that AMLO declared his friendship with Trump after visiting him in Washington this year, Santa Cruz remarked that some of the largest Mexican workforces are located in border towns such as Tijuana , Matamoros , and Juárez ; there are thousands of maquiladoras (in-bond plants) as part of the cheap labor platform of North America.
The plants have continued to work through the COVID-19 pandemic “not just because AMLO wanted them to, but because of international pressure from finance capital,” she added.
The SEP maintains that the working class throughout the world shares the same fundamental interests and requires unification; among its programmatic demands, the party calls for the immediate closure of detention centers with the basic belief that there should be full citizenship rights to all immigrants .
Editing by Sofía Danis
More by Gabriel Moyssen
