Mexico changes its tune on Trump

The Hill

By Rafael Bernal

May 4, 2016

Mexico changes its tune on Trump 

Mexican officials are focusing on the positives in the U.S.-Mexico relationship, avoiding direct references to the presidential campaign.

In an interview with The Hill Monday, Secretary of the Economy Ildefonso Guajardo said "it's not very convenient for foreign officials" to comment on U.S. elections. He said they will instead focus on the massive economic potential of the U.S.-Mexico partnership.

"The mere fact that Mexico has become an item in the debate should be an opportunity to reinforce the U.S-Mexico relationship. In a way, underlying that reality is the fact that whatever happens in Mexico has an impact in the U.S. That in itself is good," said Guajardo.

The Mexican government has traditionally avoided commentary on foreign elections, but as Donald Trump heightened his rhetoric against immigrants and about building a border wall, several high officials took the bait.

The secretaries of Finance and Foreign Affairs called Trump "ignorant." in March, President Enrique Peña Nieto compared Trump's rhetoric to Mussolini and Hitler. And in April, Guajardo himself said Mexico would always be the United State's largest trading partner, unless "Trump wins the election."

But later that month, the Mexican federal government overhauled its diplomatic corps in the United States and unveiled a new strategy centered on improving the country's image with its northern neighbor.

"The Mexicans have mastered one narrative: economic modernization. They haven’t figured out how to master a narrative of political modernization in terms of democracy," said Michael McCarthy, a U.S.-Latin America relations expert at American University in Washington.

Guajardo, a career politician whose portfolio is at the center of said modernization, recognized the challenges, but said the Mexican government has a "full commitment" to human rights, adding that the administration's aggressive reforms "have not been only on the economic front" but also "on political rights and some areas of the judiciary that benefit human rights."

The country, reeling from the effects of a violent war against drug cartels, also suffers from massive inequality, with a heavily industrialized north and a rural, impoverished south.

Guajardo touted a Peña initiative recently approved by the country's congress to create special economic areas "to break the vicious cycle of poverty and underdevelopment in southern states that are part of this weak governance."

World Bank figures say that Mexico received $24 billion in foreign direct investment in 2014 — $100 billion "in the last two years," according to Guajardo — but security and rule of law issues could derail future plans.

"Investors around the world have the sufficient level of analysis to realize that all emerging economies face challenges, terrorism in some countries, religious issues in others. Mexico has proven that of the 32 federal states, 26-28 have proof of high level of governance," said Guajardo.

McCarthy argued that for the U.S. government, "it’s most important that there is an across-the-board culture of accountability and rule of law. Less important that there are 26 states that are good for investment."

But North American manufacturing integration has become a reality, regardless of political obstacles. Guajardo said every dollar of Mexican exports includes 40 cents of American input, comparing that to China's 4 cents per dollar.

"When you produce things together, you take advantage of each country’s strengths," said Guajardo.

Extolling the complementary nature of the U.S. and Mexican economies, Guajardo said that Mexico's competitive advantage is not in cheap labor, but "strong demographics" because half the population is under 27 years old, while other industrialized countries have older populations.

In response to claims that Mexico takes American jobs by offering cheap labor — an accusation often made by Trump — Guajardo said, "you cannot be a winner in the long term if the only policy you have is low wages."

On the campaign trail, both Trump and Democratic candidate Bernie Sanders have panned the North American Free Trade Agreement. But Guajardo doesn't believe the agreement is at risk because NAFTA countries are "strategic allies" and restricting trade with Mexico would make U.S. products less competitive.

"What you have to react to are actual policies, not promises," Guajardo said. "Campaigns are all about how to target what the polls are telling you in order to win a specific target on a specific date. There’s a speech required to become a candidate, and a speech required to become president."

"Assuming that they don’t want Trump in the White House, it’s probably better to stay on the sidelines," McCarthy said, "There’s a recognition that Mexico is a partner and that’s not going to change, and the Mexicans are aware of the leverage."

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