President Donald Trump’s gunslinger stance towards Mexico is paving the way for populist Andrés Manuel López Obrador to take power in 2018. The danger is that rising tensions could not only boost his chances, but transform him into a more radical and economically ruinous leader like Venezuela’s Hugo Chávez.
Mexicans are universally infuriated by Trump’s insistence that Mexico pay for a border wall they don’t want, his provocative categorisations of illegal immigrants, and his impatience to overhaul—or scrap outright—the North American Free Trade Agreement, NAFTA.
So it’s no surprise that Trump’s use of the catchy term ‘bad hombres’ to label the drug barons and assorted bandits Mexico has been unable to capture and his apparent jokey yet menacing threat to deploy the US cavalry across the border is being flipped back at him: Mexicans now view Trump as the ‘bad hombre’.
A visible measure of the fear, loathing and nationalist fervour Trump has unleashed will be seen next Sunday, 12 February, when a broad civil movement called Vibra Mexico plans massive demonstrations.
Trump has triggered an unprecedented closing of ranks behind President Enrique Peña Nieto. In the short term, this is a boon for the incumbent. Prior to this, his popularity plunged to a record low of 12% following a string of corruption scandals, surging crime, and a fuel price hike that last month spurred a wave of protests.
No-one yet quite knows where Trump’s ‘America First’ mantra and abrasive style will lead. Mexico’s richest man, Carlos Slim, asserts that Trump’s grenade-hurling via Twitter is his way of raising the stakes to win a deal. Trump is ‘not a terminator, but a negotiator’, he says. Little different, then, to the late Chávez: the quintessential populist who relished a fight and used divisive, bellicose language as an effective political tool.
Yet that may be a generous view. It took Chávez four years to develop the same level of belligerence towards his perceived enemies and cause the same degree of political polarisation that Trump has managed to engender after barely a fortnight in office.
Amid this rude awakening, Peña Nieto has responded with restraint in the hope that Mexico can secure a reformed version of NAFTA. He’s wise to assume that an imminent, blanket 20% border tax is Trumpian hyperbole, and that an overnight collapse in the USD580bn worth of annual bilateral trade is unrealistic.
With cross-border supply chains and manufacturing processes so interwoven, scrapping NAFTA would not only be a fiendishly complex process, unwinding it might ultimately do more economic damage in California and Texas than in Mexico. A return to WTO rules and 3% tariffs could easily be absorbed by most businesses and have a minimal impact on consumption levels.
It also makes sense for Mexico to hedge its bets and seek to reduce its dependence on the US by lengthening its list of free trade deals with other countries, especially in Asia. In such a rarefied bilateral climate, it is difficult to envision a new, improved NAFTA that will be better both for Mexico and for the US.
But an emerging theme is the diverging interpretations of NAFTA’s legacy in Mexico. On the one hand, there is no doubt that NAFTA has drawn in billions in investment, fostered high-tech industries and spurred higher incomes in a number of cities and regions in the north. It goes way beyond the symbolic auto industry.
On the other hand, Mexico’s economy has grown at a snail’s pace over the past two decades, salaries remain a fraction of what they are in the US, and swathes of Mexico, especially in the south, remain mired in poverty.
The risk is that this latter negative narrative on NAFTA will rapidly gain the upper hand in Mexico, and Peña Nieto will appear increasingly behind the political style curve in a brave new world of populism by Twitter.
In an age of ‘alternative facts’, just as Trump insists—erroneously—that NAFTA has been a disaster for the US, in Mexico populists can argue that it has only deepened inequality and should therefore be ditched.
The surge in anti-Trump nationalism in Mexico, amplified doubts over NAFTA and Peña Nieto’s little alternative but to take a moderate line is a dream-come-true for Andrés Manuel López Obrador, popularly known as AMLO.
The July 2018 general elections may seem far off, but right now they look like AMLO’s to lose. A poll published by El Financiero newspaper on 1 February put him in pole position with 33% of preferences, six points ahead of his nearest rival. So the question becomes, who would AMLO resemble in power?
Luiz Inácio Lula da Silva is a possibility. Both are veteran leftist leaders. While the Brazilian rose from outsider labour unionist to president, AMLO is a career politician who has already twice come within a whisker of the presidency. In 2002, Lula won in his fourth bid for the presidency; next year will be AMLO’s third attempt.
But the similarities may end there. Crucially, Lula never had to deal with an external enemy. Chávez regularly imagined one, AMLO has a real one. This is the ingredient that can lead a populist to morph into a radical.
AMLO has already pledged some populist measures, such as allowing a presidential recall vote and putting the continuation of Peña Nieto’s energy reforms to a referendum. This last point alone puts at significant risk the legality of a host of oil exploration concessions awarded last year to Chevron, ExxonMobil, Total, BHP Billiton and several other energy firms.
The more Trump forges ahead with his plan for a wall and pursues an agenda of economic protectionism laced with a seemingly reckless treatment of international allies, the stronger nationalist fervour will become in Mexico. ‘Bad hombre’ Trump could soon find his mirror image on the other side of the border.