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Mi casa no es su casa

25 January 2017 By Martin Langfield

American President Donald Trump gave Mexican officials a less than classy welcome as they visited Washington to discuss reworking the North American Free Trade Agreement, announcing via Twitter that he plans to go ahead with construction of a wall along the U.S.-Mexican border.

Trump has called the trade deal linking Mexico, Canada and the United States his country’s worst ever, and threatened to tear it up if he can’t negotiate better terms. Mexico for its part says it could ditch NAFTA entirely if talks go badly. Extreme positions are common at the start of negotiations. A better relationship between the two countries, which are united by half a trillion dollars in annual trade, is possible. So too is disaster.

Mexico’s envoys – Economy Minister Ildefonso Guajardo and Foreign Minister Luis Videgaray, who helped orchestrate Trump’s bizarre campaign visit to Mexico last year – come armed with a diplomatic version of the “plata o plomo” (silver or lead) negotiating technique used by drug barons: a way to get richer, and a more painful alternative.

On the one hand, Reuters reports, Mexican leaders hope a deal with Trump might be possible based on tightening NAFTA’s rules of origin, which govern how much of a product is sourced in North America. Such a renegotiation, for example, might raise the current requirement that 62.5 percent of the material in a Mexico-made car be from North America if it is to enter the United States without paying a tariff. That could help U.S. industry against lower-cost Asian competitors.

On the other hand, the emissaries of President Enrique Peña Nieto, who meets Trump next week, are in town to talk about migration and security as well as trade. Understood bluntly, that means Mexican cooperation on stopping the flow of Central American and other migrants toward the United States, or its help in fighting drug traffickers such as Joaquin “El Chapo” Guzman, extradited to New York just last week, should not be taken for granted. If Mexico played hardball in those spheres, a wall wouldn’t help much.

Handled well, Trump’s Mexican standoff could end with both sides saving face. NAFTA even could be declared dead, to the applause of Trump’s nativist backers. Bilateral deals with Mexico and Canada, which if necessary looks set to throw Peña Nieto under the bus to safeguard its own privileges, could replace it. The southern-facing part could be called, say, the Treaty for U.S.-Mexican Prosperity, or TRUMP. That might go down well in the White House.

 

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