A year ago it seemed almost impossible to see a trade agreement with Mexico that would facilitate the interests of both countries. However, with the successful election of Mexican President(AMLO), a remarkable populist shift dramatically changed the landscape within the Mexican economic outlook and policy.
President Trump’s tweet today hints toward a much bigger picture we have recently been discussing. Against the likelihood Canada will not join the U.S-Mexico trade agreement. The Mexican government is affirming their intent to go forward with a bilateral trade deal if needed because the U.S-Mexico joint agreement is in their best interests. According to Mexico’s Chief Negotiator, Kenneth Smith-Ramos:
“We hope the U.S. and Canada will conclude their bilateral negotiation shortly. If that is not possible we are ready to advance bilaterally with the U.S … the agreement in principle that we closed with the U.S. is positive for Mexico because it preserves free trade and modernizes our trade agreement …”
Outgoing Mexican President Peña Nieto, structured his economic policy around accepting multinational corporate investment, facilitating the requests of Wall Street investment banks, and the predictable parasitic outcomes that follow. Exfiltration of wealth and exploitation of resources/labor are an outcropping of predatory multinational trade exploitation, ie. “globalism”.
Retention of the multinational schemes generally leads to massive corruption. In the U.S. this corruption is known as “lobbying”, in Mexico the process is called ‘bribery’; however, the activity is the same.
The incoming Mexican President, Lopez-Obrador (AMLO), is more of an economic nationalist; and quite remarkably his economic outlook, at least as his team has described the objectives so far, is quite Trumpian.
You might even say: “Make Mexico Great Again”.
Both U.S. President Trump and Mexican President-elect AMLO have similar outlooks toward predatory multinational corporations and economic exploitation. If you think about how Mexico was used by the multinationals in the past twenty years; and then think about a very real possibility of a U.S President and Mexican President having an economic friendship; well,… holy cats, those multinationals could be remarkably nervous right now.
AMLO supports labor and has an actual agenda to create a strong working-class or middle-class. The wealth disparity within Mexico has always been a foundational issue that has led to a tremendous amount of corruption.
Similarly, President Trump supports labor. Likely because of his positive relationships with labor unions as a private sector builder, Trump was the only republican candidate who advanced pragmatic opinion toward organized labor in 2015, 2016 and, as president, in White House meetings where he invited labor officials. President Trump’s economic agenda is laser focused on a strong middle-class.
AMLO views Wall Street multinationals as predatory by disposition; Mexico has suffered from industrial exploitation, especially in the agriculture sector. President Trump also views those same multinationals as tending toward predatory behavior, and he has targeted many specific corporations for attention due to their participation in the erosion of the American middle-class and the U.S. manufacturing base.
AMLO is a strong Mexican Nationalist. President Trump is a strong American Nationalist. Within almost all of President Trump’s foreign policy speeches on economics, he openly accepts that all nations should make decisions based on their individual and nationalistic needs. Trump does not see economic nationalism as adversarial; he points out that trade agreements based on both interests are entirely possible, and actually easy to construct.
As long as AMLO stays away from the authoritarian tendencies of power, ie. government ownership of private industry – and the slippery slope of soft-Marxism, surprisingly he and President Trump are likely to have a great deal more in common than most would think. Both populists; both nationalists; both rebuke the elitist trappings of globalism and intend on executing economic policies for the majority of their citizens.
Because they have more in common on the economics of policy, this explains why the framework of the U.S-Mexico trade agreement between Robert Lighthizer (representing Trump) and Jesus Seade (representing AMLO) was possible to construct.
Lighthizer and Seade held long meetings after formal U.S-Mexico daily negotiations, and together this relationship appears to have been very important in how the deal framework was structured. Right now both teams are filling in the details based on common objectives.
With AMLO and President Trump, Mexico and the U.S. have joint-interests in an economic trade bloc. It is actually quite stunning when you think about the economic power that both nations can hold if their mutual and individual interests remain at the forefront.
President Trump and President Lopez-Obrador have common objectives; and with the economic approach outlined by AMLO toward using Mexico’s energy resources as leverage for expanded investment, the U.S. is well positioned to help. Mexico needs independent collateral to break the cycle of dependency on overseas money (investment). Mexico needs policies and partners that can make Mexico, and the Mexican people, independently wealthy. Guess who the bestest partner would be? Yup, President Trump.
President Trump is well positioned to assist Mexico via a united trade bloc with expanded cross-border investment for economic development.
AMLO wants a higher standard of living for Mexican workers; President Trump wants greater parity between Mexican workers and their U.S. counterparts. Heck, it was U.S. Commerce Secretary Wilbur Ross and USTR Robert Lighthizer who first proposed raising the Mexican minimum wage. Now both countries have agreed to an incremental Mexican minimum wage aspect of $16/hr within the auto sector.
Combining the wage aspect with the content and origination agreement, this has become a win/win for both AMLO and President Trump. The multinationals within the auto-sector might not like it, but they’ve already put a massive amount of money into plant and manufacturing investment in their existing Mexican footprint. They have no choice.
In an generally overlooked outcome the nationalist interests of Mexico, specific to AMLO, are very close to alignment with the nationalist MAGA agenda of President Trump.
Unfortunately, Canada is the ‘globalist’ oddball in this tri-fecta; which makes a trilateral deal almost impossible, and explains why Mexico is so willing to sign a bilateral agreement. The U.S. economy is expanding at an unprecedented rate, and Mexico prepares to surf the MAGAnomic tsunami known as Donald Trump.
President Trump can see that independent economic future for Mexico based on a partnership that protects the interests of both nations. It certainly appears that AMLO can see the same vision.