Wednesday, November 9, 2016

Mexico's Trump nightmare comes true (Nov. 9, 2016)

Donald Trump's electoral victory in the U.S. is sending shockwaves around the world. But the effect is predicted to be particularly pronounced in Mexico, where the newly elected president has promised a tougher stance on free trade and whose migrants were characterized as criminals during the campaign.

Trump's election is Mexico's worst nightmare come true, according to El País. The New York Times also calls the scenario a nightmare for Mexico, arguing that "perhaps no country aside from the United States itself had as much at stake in the American presidential election as Mexico did."

While governments around the world are reacting with jitters, "there is perhaps no country besides Mexico where the results felt so personal," according to the Los Angeles Times.

President Enrique Peña Nieto reportedly called a sort of crisis cabinet meeting, has prepared for challenges to NAFTA, threats to cut back on remittances and impose tariffs on trade. 

Officials hope to diversify export markets to try to reduce the country's dependence on U.S. consumers, according to Reuters.

The question for observers now is whether the president-elect will follow through on promises to punish U.S. companies that relocate factories to Mexico, and to renegotiate NAFTA, according to the Wall Street Journal.

A trade fight could tip the country's economy into recession, reports Reuters.

The end of NAFTA, "would lead to a severe restriction of trade with the US, which, added to an expected increase in interest rates south of the border and a reduction in the remittances sent by Mexicans up north, will quite probably lead to a severe economic crisis," writes Salvador Vazquez del Mercado in the Conversation.

The victory is predicted to spur a 20 percent devaluation in the peso, a currency which has already lost 25 percent value against the dollar this year, reports El País. Already it suffered an 8.7 fall, the most abrupt since the so-called Tequila Crisis in 1994-95 when Mexico nearly went bankrupt, according to the Financial Times.

Earlier today Mexico's foreign minister said the country would seek dialogue with Trump, but reaffirmed that the government will not pay for a border wall Trump insisted on throughout the campaign, notes the Financial Times.

But the pain for Mexico is also related to the poor image of the country portrayed by Trump and his supporters, notes the NYT. "... The vote felt like a validation of Mr. Trump’s hostile remarks about Mexican immigrants and a broad statement of disrespect from their northern neighbors."

In light of the U.S. vote Mexicans must "prepare for a new war, certainly not military, but commercial, economic, ethnic, strategic and diplomatic," writes Enrique Krauze in the New York Times, this morning.

There is however hope that "Trump’s antitrade rhetoric will turn out to be more bark than bite," considering the relevance of Mexican investments in the U.S. business community, according to the WSJ. The level of integration between the two countries' economies is 

In the meantime, there's lots of press on how the Canadian immigration site collapsed in the wake of the results, but Google searches on how to move to Mexico from the U.S. also shot up (relatively speaking, of course) yesterday evening, reports Animal Político.

Trump in the rest of the region
  • More broadly, Trump's promises to cut back on free trade come as the rightward swing in Latin America has presidents from Argentina, Brazil and Peru promising to open borders and looking to the U.S. as a trade partner, notes El País.
  • "... the US is and continues to be the single most determining nation for Latin America," writes Rut Diamint in the Conversation. Trumps impact will be particularly felt in economic impact (especially for Mexico); a likely strong support of the defense and armaments industries, with their concomitant impact on the regions' high levels of violence; a step back from rapprochement efforts with Cuba, which will in turn affect regional diplomacy; and "xenophobic, discriminatory and alienating" policies towards migrants.
  • For Colombia, it's another electoral surprise, after voters narrowly rejected the FARC peace plebiscite. Trumps election puts in question extensive U.S. diplomatic support for the peace process, as well as a massive $450 million financial package --  dubbed Peace Colombia, reports El País
  • WOLA's Adam Isacson notes on his personal blog that Trump's campaign has been silent on the issue of Colombia, making predictions hard. But two possible scenarios could be a retraction in cooperation ("America First"), with impact to assistance for peace and possibly the free trade agreement between the two countries. Another alternative might be a handing off of foreign policy to the Republican old guard, which could mean a right-ward swing towards more militarized approaches, rather than peace negotiations.
  • Cuba announced five days of military exercises, designed to prepare troops to confront "a range of enemy actions." Though the government did not explicitly link the move to Trump's election, the announcement came soon after the U.S. results, notes the Associated Press.
  • For the past year, since President Mauricio Macri's election, Argentina has focused on tending bridges with the U.S. And the government openly bet on a Clinton win, leaving it somewhat off-balance for this next phase. Foreign Minister Susana Malcorra yesterday said Argentina would be "more comfortable with Clinton," and after the results came in, lamented on Twitter that she wasn't chosen, reports El País.

News Briefs
  • The U.S. government quietly resumed deportations of undocumented Haitian migrants, reports the Miami Herald. The repatriation flights had been temporarily suspended in the wake of the destruction of Hurricane Matthew. Activists were surprised at the deportations, considering the magnitude of the humanitarian crisis Haiti is facing. Deportations began shortly before last month's storm, after a long suspension in the wake of a 2010 earthquake. This year thousands of Haitians have arrived at the Mexico-U.S. border, after a treacherous journey from Brazil, where many moved to after the 2010 earthquake. (See Sept. 22's post.)
  • A long-form New Yorker piece by William Finnegan paints a dire picture of Venezuela as a failing state. He writes of hospitals where muggers prowl the stairs and security forces seize the very supplies they have sold desperate families on the black market. Off-duty police targeted by criminals who seek their weapons. Lines, of course lines, for food and basics. The die-hard support Chávez still inspires among many. And an opposition desperate to take power but split between its factions. The piece follows the many themes coming out of Venezuela today in rich, narrative detail. "Understanding Venezuela’s failing state as just another failure of socialism, and of statism generally, is ahistorical. Venezuela before Chávez was often extravagantly statist. Corruption has been a major problem in every era. Even dire food shortages are not new. These things happened under capitalism, too, as did intense political repression. Today’s crisis is for most people the worst in memory, but it is not all about socialism. The predatory state, the extreme insecurity, the sheer weakness of the rule of law—these are problems more profound, at this stage, than a traditional left-right analysis can clarify, let alone begin to solve."
  • Mexican leftist politician Andrés Manuel López Obrador said he is retiring a libel suit against the Wall Street Journal, after the newspaper rectified an October report alleging he excluded two Mexico City apartments from his sworn declaration of assets. The apartments in question have been legally transferred to his sons as donations in 2005, reports Animal Político. (See yesterday's briefs on the WSJ piece.)

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