Mexico has a new president, but will it bring a new NAFTA?


July 1, 2018 has been referred to as a pivotal day in the NAFTA 2.0 drama for months, and the implementation of the $16.6 billion retaliatory tariffs were not the biggest story. Instead, the date marks the Mexican election where favourite Andres Manuel Lopez Obrador (AMLO) was victorious as the next president of Mexico. How will this former mayor of Mexico City and left wing populist boost the Mexican economy and fit into the NAFTA personality chess game? We are going to find out relatively quickly even though he does not take office until December.

There has been concern that AMLO is not compatible with U.S. President Donald Trump. He is definitely not a free trader, but over the course of the campaign his own rhetoric has softened.

Within 24 hours of the victory Trump and AMLO talked on the phone and Trump was very positive on the potential of the relationship. According to Trump, they discussed the border and a potential of a bilateral trade deal.

AMLO tweeted the following about the meeting, “I received a call from Donald Trump and we talked for half an hour. I proposed to explore a comprehensive agreement; of development projects that generate jobs in Mexico, and with that, reduce migration and improve security. There was respectful treatment and our representatives will talk.”

Tuesday on RealAg Radio, Jose Diaz-Briseno, of Reforma, mentioned AMLO’s Tuesday’s statement to 100% support the current Mexican government position on NAFTA talks until the end. Diaz-Briseno stated emphatically that, “this is certainly news. Many people expected that AMLO would be a disruptor. He has knowledge on the importance to be unified and versus the threat of the Trump administration to break an accord that has been a benefit to all three countries.”

“Up until this point on the NAFTA talks, Canada and Mexico have held together making this trilateral essentially a bilateral deal which has somewhat frustrated the U.S. trade team,” says Shaun Haney, RealAgriculture. Haney continues, “it has clearly been Trump’s plan to divide and conquer the Canadian and Mexican trade teams.”

Diaz-Briseno clarified the media reports that Mexico was entertaining a bilateral trade deal with the U.S. based on Trump’s comments after the phone call between the two leaders, “even though President Trump has been pushing to make this two accords, the readout from the AMLO office was completely different in that sense, AMLO said they talked about a separate deal on immigration and not one related to trade.”

Farmers and ranchers in Canada and the U.S. have been very vocal on the benefits of NAFTA but what about Mexican farmers? Diaz-Briseno describes a similar position in Mexico, “We know that the large farm orgs have been apart of the trade advisors and closely aligned to the negotiating position. They are waiting for signals from AMLO on what he meant about being disruptive.  Based on what they heard today they will feel some comfort.”

Hear all about the Mexican election from Jose Diaz-Briseno, U.S. / Mexico Affairs with Reforma

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