Mexico Today –  June 15, 2021
Luis Rubio

  Citizens spoke loud and clear during Mexico’s midterm election. Now, the entire political system will have to adapt to a new reality. In a show of great wisdom, Mexicans ratified its trust in the the country’s independent elections authority (INE), rejected President Andrés Manuel López Obrador’s excesses, demanded good sense from political actors, and continued its quest for “a change.” By claiming sweeping victories, party leaders demonstrated a total lack of understanding of the moment, unlike president López Obrador, who undertook an attempt to moderate his approach (though it did not last long), in his own peculiar way and without acknowledging the electorate’s message in the polls. It would have been hard to find a better scenario for Mexico, given the country’s polarized and furious climate threatening to reach fever-pitch by the second.

Since 2018, López Obrador outrageously and immoderately milked the election where he was elected president. Surmising an unassailable endorsement by the polls to do and undo at will, he proceeded to turn the Mexico’s clock back 40 years. López Obrador’s persistence and single-mindedness led him to decisively alter the country’s circumstances, to the point of widespread rejection by the middle classes and investors. This was, in fact, a middle-class rebellion in Mexico’s urban areas against the president’s party MORENA.

The electoral result leaves president López Obrador enough elbow room to save face and to be able to argue that his (huge) losses were not so major. He can contrast the 20 percent decrease in members of his party in Mexico’s Lower House of Congress against the growth in the number of state governorships in MORENA’s hands. However, both the election results and the moment in the presidential cycle herald fundamental changes for Mexico.

First, ever since Vicente Fox announced his candidacy to the presidency immediately after the midterm election in 1997, Mexican presidents lost their old instruments to control and postpone the succession process. This will be especially hard for MORENA given its lack of institutional structures and internal discipline which promises constant intra-party clashes. This fact in itself will amplify the already MORENA’s existing fractures, which will inevitably weaken the López Obrador ability to control the succession process or promote new political or legislative initiatives.

Second, although MORENA will govern more than half of Mexico’s states, the potential for intimidation -the president’s main instrument for keeping the state governors in check- will be diminished. Regardless of their party, the 15 new governors -out of Mexico’s 32 states- will enjoy freedoms vastly superior to those of their predecessors.

Third, MORENA will no longer have the supermajority that it had in the Lower House of Congress, nor will it be easy for it to find a “swing” party to push through constitutional amendments. That changes the Mexican legislative dynamic in several ways. Most of all, it introduces an element of instability to the coalition formed by MORENA, the Green Party and the Labour Party (PT). The results encourage these eccentric allies, especially the Green Party -which never misses an opportunity to profit from the political moment- to contemplate different alliances for the future. No less important, the Lower House will become Mexico’s space for political interaction and negotiation that the supermajority previously held by MORENA made impossible.

All of this creates a new environment for Mexico in which visions and proposals that sketch a less contentious and bitter political future could -indeed, should- flourish. To date, Mexican politics has focused on the past: for some, the 1970s, for others pre-2018, despite the fact that not many Mexicans would like to return to those times. The contrast between the 2018 presidential election and the 2021 midterm election makes it clear that Mexicans want to move forward, towards a more cordial future, with greater progress, and a better distribution of benefits. Early in his term, president López Obrador should have undertaken such effort but he was lost in the confrontational strategy that has not yielded Mexicans results, and even less for him as the midterm election result evidenced. In fact, López Obrador’s political future is now in a difficult position: unless he rectifies course, his ambition to go down as one of the great transformers of Mexican history will have vanished.

President López Obrador has been falling into a not unusual paradox, frequent among those who accumulate power without a vision that can attract and marshal the citizenry. The more power he amasses, the less power he can exert. More power could tempt him to follow a more radical route risking crises, thus destroying his whole project. Perhaps there is no better example of this than the risk that Mexico devalues its currency, something López Obrador has said won’t happen. Something similar happens with the idea of extending his six-year term in office. The consequences of trying to break a centuries-old Mexican political taboo would be devastating for the promoter and detrimental for the country.

Three tricky years lie ahead. These could become an exceptional opportunity for reconciliation to lay the framework for a better future. Unfortunately, it is not obvious that there are statesmen -in the López Obrador administration or in the Mexican opposition parties- capable of leading and advancing it. But the opportunity is still there.

* Luis Rubio is chairman of México Evalúa-CIDAC and former chairman of the Mexican Council on Foreign Relations (COMEXI).  A Spanish version of this Op-Ed appeared first in Reforma’s newspaper print edition. 

Twitter: @lrubio

https://mexicotoday.com/2021/06/15/opinion-mexicos-next-three-years/

www.mexicoevalua.org
@lrubiof

 Luis Rubio

Today’s the day, the day of the citizenry. The day on which, with their vote, the citizens will individually express their feel for the government and their expectation for the future. There have been few times that a midterm election has been so transcendental, and that is because the President has defined the moment as a dilemma: for him or against him. Rather than a clean and respectful democratic process, he is demanding a response from the citizens that is unequivocal, definitive and one that is obviously in favor of him and him alone.

The responsibility that each of us assumes as citizens is extraordinary: with a single vote each of us must choose our popular representatives and local governors. But, more than that, our vote entails a judgement of the moment in which we are living, our hopes for the future and the best way to attain them. The problem with, and the virtue of, democracy is that these must be expressed in an instant, with a mark on each of the respective ballots. What is interesting in this is that we Mexicans will find ourselves on pins and needles regarding how everyone else votes.

As we near the time to vote, it is essential for us to consider where we are, where we are going, what is next and who offers a greater degree of certainty for advancing toward the desired direction. It is evident that each citizen will evaluate distinct factors when deciding concerning their vote, but there is doubtlessly an array of elements that affect all of us, directly or indirectly, albeit in different ways.

What is exceptional about election day is not the enormous number of posts that will be settled by the citizen vote (the most extensive number to date of this young democracy), but that a midterm in itself commands such great transcendence. In a country of divided government with the president in charge of the Executive Branch, definitory elections tend to be presidential. However, given the personalistic, aggressive, and exclusionary fashion that has typified the government of President López Obrador in its first three years, the question before each voter is whether carte blanche should be conferred on its upcoming, and final, three years, or whether its way of being merits strengthening of the legislative branch to ensure the existence of an effective counterweight contributing to a more balanced country and to a president more committed to the entire citizenry.

Nobody can predict what the future holds. Notwithstanding this, there is not the least doubt that during the last decades the country has had bad governments and some that were mediocre, all promising grand solutions only to end up with shattered expectations and a sea of corruption. President López Obrador made it to the presidency due to an electorate that was fed up, to a greater degree than to the quality of his proposal of government that, in practice, has consisted of nothing other than the concentration of the power in his person.

His program of government is reduced to three infrastructure projects of doubtful relevance and a mechanism of cash transfers to his clienteles. Instead of seeking the way to generate an economic platform that permits the production of wealth and good and permanent jobs for balanced development and better income distribution, his vision is limited to handing out money without producing anything. The rhetoric can disguise many governmental acts, but does not engender incomes or permanent jobs, the latter the only means of emerging from the current paralysis, poverty, and inequality.

At the beginning of this President’s six-year term, I published a book in which I began by saying that the President had correctly identified the three principal problems confronting the country: the low economic growth rate (on average), the poverty and the inequality. However, I wrote, his proposal for tackling these was erroneous and it would fail because he would not recognize nor accept that the problem lies in the conditions under which a huge part of the population lives and that it is those conditions and circumstances that should be attacked. In place of that, the President has devoted himself to attempting to recreate the fantasy of an idyllic world that came to a halt, not by the design of those whom he calls adversaries, but because of the lack of vision of his predecessors who ended up in the doldrums, as he will, because they refused to address the problems of the reality of today.

The sharp contrasts that are the trait of Mexico today can be resolved and President López Obrador possesses the legitimacy to face up to them, but his project is blind to the political and economic reality, as well as the enormous complexity, of Mexico in the 21^st century and the tremendous potential of the citizenry in all corners of the country. Returning to the impoverishing authoritarianism of the past will achieve nothing more than destroying what little advancement there has been, without building anything better along the way. But the President is not willing to consider alternatives, even those that fortify his probability of effectively eliminating those ancestral ills.

Faced with this, the citizenry must opt today, with its vote, between ratifying the path adopted by the President or constructing another way out in the form of effective counterweights that compel the population to assume its own responsibility implicit in that definition of the country’s future. Let us vote!

www.mexicoevalua.org
@lrubiof

WILSON CENTER, Mexico Institute
6/1/2021

  By Luis Rubio

An old aphorism holds that nostalgia is not what it used to be. However, it constitutes a heavy burden that never quite disappears. Two sources of nostalgia cloud Tyrians and Trojans in current Mexican politics. AMLO leads with his nostalgia for the 70s, the idyllic moment in his memory when everything was marching wonderfully and, in his words, where people “lived well.” Recreating that idyllic past became his mantra and the raison d’être of his government. But other nostalgic people want to return to 2018 when everything was fine in their own mythical image. For this other group, everything worked immaculately until today’s President López Obrador arrived to spoil it. Like all myths and all nostalgia, both are false archetypes that will never produce a better future.

The presidential project is leading Mexico to a caricature of the PRI past, albeit a dangerous caricature. The presidency of yesteryear was most powerful since it had instruments at its disposal, beginning with the PRI itself, which conferred upon it a structure of political control that facilitated the effective implementation of governmental decisions. But the PRI was not a mere malleable mechanism that simply responded to the president: it was a bargaining apparatus that, in some sense, could limit the worst excesses of the presidents. There is no such mechanism today, and the president acts as if there is no limit to his power. Of course, reality is an inescapable counterweight, but its impact is often delayed. The question is how severe the damage inflicted by a hyperactive president will be, particularly as he believes that he can dismantle what has been built by an entire society over time without consequence.

The group of nostalgic people about the near past is scattered and shapeless. Although some of those who seek to organize the political parties and groups opposing the current government to form a common front raise the notion that all that has to happen is a return to 2018, many long for that idea and harbor the hope that on election day the return to the much-desired stadium will begin. Among these are activists from the various opposition parties, people in business, and not a few opinion-makers. The problem is that there is nowhere to return to: first of all, that past was not as commendable as these advocates now want Mexicans to believe; and second, the mere pretense of returning entails contempt for the millions of voters who in 2018 spoke out clearly against the status quo ante. For me, there is not the slightest doubt that the vote that elevated López Obrador to the presidency was much more a rejection of what already existed than an endorsement of a project that had no structure or plan beyond nostalgia.

The country was not going well. The two moments of great expectations -first with President Fox (2000) and then with Peña Nieto (2012)- ended in a huge disappointment that translated into democratic disenchantment. Precisely the values ​​that López Obrador knew how to capitalize with enormous skill, partly because of his biography, but much because he managed to convince an electorate fed up with promises without positive results that the problem was the person: AMLO would be different because he was not corrupt, not because he had a better plan to move ahead.

 There is nowhere to return to, but, as of yet, there is no alternative project that is positive, hopeful, and viable in the current Mexican scene for the electorate to envision a better future. The highest cost of the failures of the reforms in recent decades and, especially, of the unfulfilled promises so far this century is that the willingness to visualize opportunities, debate proposals, and reach solutions without attacking and disqualifying other people or views has disappeared.

It remains to be seen how the current government will end. As in all administrations, the first couple of years fly without too many setbacks because the hope persists that their plans and decisions will translate into positive results. Soon, however, things change, as it is already beginning to happen to the current government. Hopefully, the damage that this government will cause will not be worse than what has already been, but there is no way of knowing since the destructive capacity of the president and his activist groups is vast.

After the 1982 debacle, in which another failed president tried to repair (or hide) his mistakes by expropriating the banks, it took more than a decade for the country to return to the path of growth and trust. This was achieved thanks to some reforms, but above all to the willingness of the United States to support the Mexican process of change through NAFTA. That option no longer exists today because it was exhausted due to the lack of deep reforms and results, the very same that discouraged the electorate and led to today’s government.

The future lies looking ahead, not in the past. The coming election of June 6 is critical for there to be a future because without counterweights Mexico will end up in the doldrums. But a promising future will only result from a hopeful and realistic new vision, the opposite of the nostalgia that today reigns in the government and the opposition. The “nostalgia trap,” García Márquez wrote, takes away the bitter moments and paints them in another color. But it is still a trap.

Luis Rubio
Mexico Institute Advisory Board Member; Chairman, México Evalúa; Former President, Consejo Mexicano de Asuntos Internacionales (COMEXI); Chairman, Center for Research for Development (CIDAC), Mexico

https://mexicoelections.weebly.com/op-eds/mexican-nostalgia

Luis Rubio

Next Sunday will be a key day for the future of Mexico. It is the day on which the electorate will decide whether it will vote for the existence of counterweights to power or whether it will ratify the course that, step by step, the president has been leading Mexico toward the total concentration of power on a sole person who, in a single instant, could convert it into tyranny. For Karl Popper, one of the great philosophers of the XX century, what is essential for democracy is that the government not abuse the citizenry, thus the existence of checks to power. The nodal question for the voters is whether it will be possible to render this minimal definition of democracy effective.

What is at play next Sunday has nothing to do with President López Obrador, his attributes or style of government. The essential principle of democracy rests on the existence of checks on power son that nobody could abuse, regardless of his or her values or objectives. The issue has everything to do with the type of country that Mexicans want to experience and with the sources of certainty that are necessary for guaranteeing political stability and economic viability. The decision-making manner of the president, his constant warning to his party’s benchwarmers regarding not “changing even a comma” of his legislative bills, and his threatening discourse against the Supreme Court justices depict a leader who wants all the power for himself without relinquishing any space to the cardinal function corresponding to each of those branches of government, as counterweights and as protectors of last resort of the essential rights of the citizenry.

Voting for the Morena party or its acolytes implies advancing toward the risk of tyranny. Neither more nor less. On ratifying the Morena majority, the world changes because nothing that existed prior to that will continue to be valid. Throughout the last two and a half years, Mexicans have been observing that, one step at a time, liberties have come to be restricted or jeopardized, the arbitrariness of the government’s acts increases, legislation is modified without the slightest attempt to court the opposition toward arriving at a consensus, or widespread support for the presidential initiatives and decisions are made that directly affect the creation of new enterprises, sources of employment or opportunities for the country’s development. In a word, the country has been losing the few sources of certainty that there were, as keenly reflected in the meager performance of the economy across the board and in the current unemployment levels.

The president has done everything possible to convert this election into a referendum of himself. He does this because he wants to exploit his personal popularity as a calling card so that voters arrive at a decision at the ballot box, with no meditation whatsoever, in favor of the candidates of the party that does not “change even a comma” of the presidential initiatives. Each citizen should ask themselves where the logic is in electing representatives whose sole undertaking would be to occupy their seat in the House to raise a finger when instructed by the Head-of-State. As citizens, the key lies in there being the conditions that impede excessive or absurd decisions that negatively affect the people’s and the country’s well-being and for which the only thing that works is the existence of effective counterweights. There is no other way.

His decisions, above all his way of arriving at them, explains why it is so important for counterweights to exist. Each of his initiatives and actions have acquired a personalistic logic, a desire to recover an elusive past, and an implacable fancy for nurturing his clienteles. Every time I think about his mode of acting and coming to decisions, I imagine merchants who promise miracles impossible to come true.

So suggests the following anecdote:

In his comedy “The Knights”, Aristophanes presents the Athenians as a fundamentally good but bewildered old man who was tricked by the demagogue Cleon. The wise men of the epoch opted to postulate a sausage maker (the most repugnant profession imaginable) to run against Cleon in the popular vote. The two candidates sustain a public debate, in which the sausage stuffer shows himself to be even more vulgar, swaggering, egotistical and loutish than Cleon, accusing the latter of preposterous crimes and finally winning the debate by pledging free gifts that could never be defrayed by public funds.

The central characteristic of the government has been great and fallible promises focusing on grand projects (such as the Airport, the Train, and the Refinery) and his interminable thirst for increasing transfers to his clienteles which, as Aristophanes insinuated, cannot be fulfilled. The existence of counterweights would have thwarted those excesses.

An open and democratic society endures and is nourished by the existence of diverse positions and opinions, a principle that López Obrador rejects out of hand. He fights every day against what, as Garganella says, is a fundamental factor of development: the right to protest and to find fault because this has to do with basic rights that permit maintaining the society and its qualities alive. The President has been eroding citizen rights one by one.

This election will decide whether he will continue abusing the citizens’ rights or whether he will be required to negotiate, as in any democracy, his priorities and actions with the representatives of all Mexicans, rather than merely imposing them upon those of his own affiliation.

www.mexicoevalua.org
@lrubiof

Luis Rubio

An old aphorism holds that nostalgia is not what it used to be. However, it constitutes a heavy burden that never quite disappears. There are two sources of nostalgia that cloud Spartans and Trojans in current Mexican politics. The president leads with his nostalgia for the seventies, the idyllic moment in his memory when everything was marching wonderfully and when, in his words, the people “lived well.” Recreating that idyllic past became his mantra and the raison d’être of his government. But there are also other nostalgic people, those who want to return to 2018 when, in their own mythical image, everything was fine, everything worked immaculately until today’s President López Obrador arrived to spoil it. Like all myths and all nostalgia, both are false archetypes that will never produce a better future.

The presidential project is leading Mexico to a caricature of the PRI past, albeit a dangerous caricature. The presidency of yesteryear was most powerful, since it had instruments at its disposal, beginning with the PRI itself, which conferred upon it a structure of political control that facilitated the effective implementation of governmental decisions. But the PRI was not a mere malleable mechanism that simply responded to the president: it was a bargaining apparatus that, in some sense, could limit the worst excesses of the presidents. There is no such mechanism today and the president acts as if there is no limit to his power. Of course, reality is an inescapable counterweight, but its impact is often delayed. The question is how serious the damage inflicted by a hyperactive president will be, particularly as he believes that he can dismantle what has been built by an entire society over time without consequence.

The group of nostalgic people about the near past is scattered and shapeless. Although some of those who seek to organize the political parties and groups opposing the current government to form a common front raise the notion that all that has to happen is a return to 2018, there are many who long for that idea and harbor the hope that on June 6, election day, the return to the much-desired stadium will begin. Among these are activists from the various opposition parties, businessmen, and not a few opinion-makers. The problem is that there is nowhere to return to: first of all, that past was not as commendable as these advocates now want Mexicans to believe; and second, the mere pretense of returning entails contempt for the millions of voters who spoke out clearly against the status quo ante. For me there is not the slightest doubt that the vote that elevated López Obrador to the presidency was much more a rejection of what already existed than an endorsement of a person or a project that had no structure or plan beyond the nostalgia and its rhetoric.

The country was clearly not going well. The two moments of great expectations -first with Fox and then with Peña- ended in a huge disappointment and disenchantment that translated into frustration and discouragement. Precisely the values that López Obrador knew how to capitalize with enormous skill, partly because of his own biography, but much because he managed to convince an electorate fed up with promises without positive results that the problem was the person: he would be different because he was not corrupt, not because he had a better plan to move ahead.

There is nowhere to return to but, as of yet, there is no alternative project that is positive, hopeful and viable in the current Mexican scene for the electorate to envision a better future. The greatest cost of the failures of the reforms in recent decades and, especially, of the unfulfilled promises so far this century, is that the willingness to visualize opportunities, debate proposals and reach solutions without attacking and disqualifying other people or views has disappeared.

It remains to be seen how the current government will end. As in all administrations, the first couple of years fly without too many setbacks because the hope persists that their plans and decisions will translate into positive results. Soon, however, things change, as it is already beginning to happen to the current government. Hopefully, the damage that this government will cause will not be worse than what has already been, but there is no way of knowing, since the destructive capacity of the president and his activist groups is vast.

After the 1982 debacle, in which another failed president tried to repair (or hide) his mistakes by expropriating the banks, it took more than a decade for the country to return to the path of growth and trust. This was achieved thanks to some reforms, but above all to the willingness of the Americans to support the Mexican process of change through NAFTA. That option no longer exists today because it was exhausted due to the lack of deep reforms and results, the very same that discouraged the electorate and led to today’s government.

The future lies looking ahead, not in the past. The coming election of June 6 is key for there to be a future, because without counterweights Mexico will end up in the doldrums. But a promising future will only result from a hopeful and realistic new vision, the opposite of the nostalgia that today reigns in the government and the opposition. The “nostalgia trap,” García Márquez wrote, takes away the bitter moments and paints them in another color. But it is still a trap.

www.mexicoevalua.org
@lrubiof

Luis Rubio Ph.D.
Chairman, Mexico Evalua
Woodrow Wilson Center Global Fellow

The US-China-Mexico Triangle: a strategic assessment

 Testimony Before the U.S.-China Commission Economic and Security Review Commission
May 20, 2021

After four decades of extraordinary transformation, no one can doubt the enormous ambitions of China as a world power. This transformation was dramatically aided and abetted by the retreat launched by President Trump over the past four years, leaving it fertile ground for the political and strategic, as well as economic, expansion project it is building throughout Asia and Africa. Its aspiration to recoup its importance as a world power has further reached Latin America, where its presence has grown exponentially over the past two decades.

Mexico has been spared much of that process, and thus constitutes an odd character in this general picture. However, in a rapidly moving world dynamic, this picture has begun to change, and it is Mexico, not China, that is introducing new elements into the bilateral relationship. Yet more important, it was Trump’s threat to do away with NAFTA that triggered Mexico’s approach to China.

NAFTA’s importance for Mexico can hardly be overstated. More than a trade agreement, NAFTA was the main source of legal and political certainty for the country’s development ever since it came into force. In a country with a weak legal system and similarly frail institutions, and a propensity for every new government to attempt to reinvent the wheel, NAFTA became a bastion of legality and thus certainty for the future. Although not perfect and surely in need for an upgrade, the trilateral trade agreement that came into operation in 1994 was critical in compelling Mexico’s governments to stay the course in economic policy and pursue the gradual integration of the three North American economies. USMCA upgraded NAFTA but stripped the legal components inherent to the earlier trade agreement that made NAFTA so transcendent. In so doing, it opened up a Pandora’s box, which has a lot to do with how Mexico began rethinking its relationship with both the US and China.

Three elements were changed in the renegotiation of NAFTA. First, the new agreement was stripped of the legal protections to investors in the industrial sector, Mexico’s largest engine of growth; second, USMCA expires every six years, which means that it does not provide long term certainty. Much more important, the mere fact that the United States was willing to do away with the main source of stability and certainty for Mexico’s gradual evolution towards an open market economy and a thriving democracy, radically changed the political equation in Mexico. In one word, NAFTA was a straitjacket that forced Mexican governments not to stray away from the established course. By threatening NAFTA, President Trump unleashed a series of forces that had long wanted to distance Mexico from the US. For President López Obrador, Trump’s actions constituted the opportunity to rethink Mexico’s standing vis-à-vis the world as well as its long-term perspective without being blamed for it.

Mexico and China in a geopolitical context

Mexico is located in a geopolitical zone distant from that of China, which has conditioned much of the historical nature of the bilateral relationship. In plain terms, this has entailed a cordial diplomatic relationship but not close political or diplomatic ties. The paradox in recent years is that it was the attitude of the U.S. that began generating a mutual incentive to explore common alternatives. In addition, since 2018, a change in political vision in Mexico has helped advance a radically new perspective on what can be termed a new “geopolitical triangle,” namely: the US, China, and Mexico.

Historically, Mexico always sought diversification away from the United States. However, since the mid-1980s, Mexican governments began to realize that it was closeness to the US that could help Mexico achieve its development goals. This despite the obvious cultural, economic, political, and historical differences and contrasts that characterize these two nations.

For three decades, both nations, the United States and Mexico, worked together to address the multiplicity of issues that characterize the mutual border and that inevitably are the source of potential conflict. In this vein, two mechanisms were agreed upon in 1988 that made it possible to address problems without generating diplomatic crises. One was a common vision about the future (one of eventual convergence), regardless of the differences in perception about the implied timeline to reach it. The other was an agreement on the principle of compartmentalization, which allowed managing this complex relationship without causing endless conflict and the publicity that this brought with it. This worked well until Donald Trump’s arrival to the White House in 2017.

President Andrés Manuel López Obrador has long been a critic of both the economic policies of the previous decades and of his nation’s closeness with the United States. In the absence of a change in America’s position on NAFTA, his options to shift course would have been limited. However, his coincidence of vision with President Trump gave him the opportunity to devise a potentially new course for Mexico.

To begin with, the two presidents had in common a stark disapproval of the two principles that had prevailed in the management of the bilateral relationship since the 1980s. They disagreed on both the common vision and the principle of compartmentalization. In fact, they implicitly agreed on the opposite: distancing the two nations from each other and, rather than addressing the inexorable manifestations of conflict that stem from such a complex border, they sought to avoid the conflict altogether by negating its existence.

For Mexico’s President, that was an ideal arrangement, for it matched with his objective to reenact the old, twentieth century Mexican principle of distancing the country from the United States. Implicit in that perspective is the objective to diversify relations with other nations, especially with China and Russia. This is not a power play or a strategic, geopolitical ploy, but a domestic-driven objective of maintaining internal unity through opposition to the neighbor to the north. This is an old tactic that, for many years, served a useful political purpose. It is doubtful that, given the depth of the bilateral relationship both at the economic and peoples’ level, such a strategy could deliver any visible benefits.

On China’s side, it is important to realize that, as clear in its objectives and policies as China might appear, its actual behavior is, in the words of Philip Orchard,[i] “an odd combination of rising confidence and a permanent crisis mentality.” This impacts its behavior on a permanent basis and, as it pertains to Mexico, is probably an important source of the ups and downs that the bilateral relationship shows. Obviously, it also impacts everything else it does on every issue and front. However, this does not alter the relatively modest objectives of the current Mexican government, which largely sees China as a vehicle for its domestic agenda.

China’s perspective on Mexico

China has long had a keen geopolitical perspective on Mexico. If one looks at the investment patterns of its companies or at its diplomatic overtures, what is noticeable is the fact that these are few. Compared to Brazil or Peru, to cite two obvious examples, China has understood Mexico as part of what could be termed the American sphere of influence, and thus not a country of prime interest, despite its relative size.

Two circumstances altered this picture: on the one hand, the new U.S. tone under the Trump administration, which re-opened discussion within Mexico concerning the elevated concentration of economic ties with the U.S.  It is important to state that this rethinking took place before President López Obrador came into office. The context was a series of protectionist actions by the Trump administration and, especially, the threat to cancel NAFTA, that triggered demands to review the country’s national priorities.

On the other, on China’s side, its new assertiveness stemmed from its drive to exploit what it perceives to be growing American weakness. Establishing new geopolitical realities thus became its own national priority. China’s clarity of vision contrasts with the lack thereof in the United States and, as it pertains to Mexico, has provided an opportunity for Mexico’s government to attempt to diversify. Yet, if one looks at the numbers, these diversification efforts are tiny, inconsistent, and much more symbolic than substantive. Also, they are probably not devoid of potential opportunities for corruption.

Mexico has had a long relationship with China: from the establishment of diplomatic ties in 1972, the political relationship has been profound, albeit not so the economic one. Despite Mexico being the second largest Latin American economy, its trade with China is one of the smallest with the Asian giant. In 2018, two-way trade between both nations amounted to US$90 billion. China was Mexico’s fourth biggest export market in 2014 and second biggest import trading partner. Mexico’s exports to China amount to US$5 billion each year while Mexico’s imports from China amount to US$66 billion with a difference of US$61 billion in China’s favor.[ii] Several Chinese multinational companies operate in Mexico such as Hisense, Huawei, JAC Motors, Lenovo and ZTE.[iii] At the same time, several Mexican multinational companies operate in China such as Gruma, Grupo Bimbo, Nemak and Softtek.[iv] At more than US$677 billion in yearly two-way trade across the US-Mexico border, these figures dwarf Mexico’s economic ties with China.[v]

China’s ambitions in the world include Mexico, but it is only lately that Mexico began courting Chinese investment. Although the numbers are small, their relevance is political. The Mexican government has contracted Chinese firms to participate in the construction of the flagship Maya train project and the Dos Bocas refinery, while China’s State Power Investment Corp. has acquired Mexico’s largest independent renewables company. In previous years, Mexico contracted a Chinese company to build a fast train between Mexico City and Queretaro, but the project failed, as did a trade center, Dragon Mart, in Cancun.

Beyond the stable, albeit shallow, political and diplomatic bilateral ties, the China-Mexico relationship ought to be understood within a US-China-Mexico triangle. It is the Unites States that, indirectly, implicitly, and usually without realizing it, drives the relationship. On the Chinese side, China benefits by challenging the American hegemony in the region, and, on the Mexican side, it fuels its drive to diversify away from the United States, though, so far, mostly in a symbolic way.

NAFTA -now USMCA- and China

Mexico’s composition of trade does not lend credence to the notion that China has been using Mexico’s duty-free access to the United States as a vehicle to sidestep existing restrictions imposed by the US to Chinese exports. In addition, not all of Mexico’s exports to the US enter as tax-free goods: major industrial companies, especially those involved in integrated supply chains, have become extremely deft at separating their intra-company exports that comply with the rules-of-origin required by USMCA from those that do not, the latter paying duty on entering the US. Some of those exports go through as items within the USMCA rules, others go through normal trade rules, paying their respective duty.

For its part, China was the United States’ main trade partner in 2018, accounting for 15.7 percent of the total US trade. It is the top supplier of the US economy, with a 21.1 percent share of all US imports, up from a share of less than 3 percent 30 years ago. However, China buys only 7 percent of that country’s exports. This difference resulted in a trade deficit of close to US$415 billion dollars in 2018.

During the first quarter of 2019, Mexico surpassed Canada and China to become the top trade partner of the US, with 15 percent of the total US trade. China’s share was down to 13.1 percent during the same period in 2019. The US allocated 6.4 percent of its exports to China during the first quarter of 2019, a number that is 1.6 percentage points below that of the same period in 2018.

In terms of imports, during the first quarter of 2019, 17.7 percent of US imports came from China, down from the 20.5 percent registered in 2018. The 2.8 percentage point’s variation in the demand for US imports equals 16.76 billion dollars, which is more than the total exports from Vietnam, the seventh largest US supplier, during the first quarter of 2019. In 2019 Mexico grew its share as a US supplier, reaffirming its position as the second largest supplier worldwide, with a 14.5 percent share of the total US imports.[vi]

The dynamic of North American trade over the past three decades has involved the rapid development of vertically integrated supply chains. These “strengthened the competitiveness of U.S. companies and helped Mexico accelerate its diversification of exports and imports. Vertical specialization was used in manufacturing production maquiladoras (Mexico’s export-oriented assembly plants) across the U.S.-Mexico border: maquiladoras use large amounts of imported materials produced in the United States and assemble them into the final product, and then export most of the final product back to the United States with duty-free status. Vertical specialization has allowed the United States and Mexico to leverage their economies by collaborating in the manufacturing and assembly of various products, including automobiles, computers, and electronics. Mexico is now one of the largest auto manufacturers in the world, producing almost 4 million cars per year.”[vii]

The original Transpacific Partnership (TPP) was meant to address two objectives: one was to upgrade NAFTA without focusing on a direct renegotiation among its three partners. The other was to effectively, create a free trade zone in the Pacific region to strengthen America’s ties with its Asian trading partners other than China. TPP entailed a strategic vision that matched the notion of an American-led world order of yesteryear. By abandoning it, the US wasted a major opportunity to achieve these two key objectives. Four years later, the political context has changed, but not the transcendence of the original goals, in both the Pacific region as well as in North America.

As it pertains to Mexico, no objective assessment of the trading and investment patterns of Mexico with the rest of the world could conclude anything other than its primary trading and investment relationship is with the United States. The aim of developing and expanding new markets is natural, but given today’s integrated supply chains, there is nothing that suggests that the essence of these facts will be altered anytime soon.

Despite what some Mexican politicians might claim in their rhetoric, the fact is that the US constitutes the main engine of growth of Mexico’s economy and its strongest source of stability, both economic as well as political. More important, the closer and deeper the level of integration, the more difficult it becomes to alter these patterns. Furthermore, USMCA would not have been concluded without the active participation of President López Obrador. This was the case both to conclude the negotiations themselves, when he had just been elected president, but before his inauguration, and later, during the process of its ratification by the US Congress. Hence, it is critical to separate rhetoric from substance and, no less important, preferences from realities.

China’s influence in Mexico

China and Mexico have increased cultural and political exchanges in the past two years. Although the leaders of both nations have paid visits to each other for many years and signed cooperation agreements of various types, it is only recently that Mexico has made a concerted effort to upgrade such ties. The driving force for these ties is twofold: one, as has been mentioned, is a belated response to Trump’s degrading of NAFTA; the other is a politically motivated attempt to distance Mexico from the US. The numbers show that this remains largely a symbolic relationship, but China is a long-game player and may be hoping to take advantage of the current nature of Mexico’s government to increase its influence over the long term.

Roman Ortiz argues that “A significant increase in Chinese influence over Mexico would have strong implications for U.S. security. Washington has, until now, maintained a ‘special relationship’ with its southern neighbor in terms of security cooperation.”[viii] Limited economic ties have meant weak political relations between the two countries, and while Chinese and Mexican leaders have exchanged visits periodically, diplomatic dialogue has lagged behind that of other Latin American countries. Although Mexican government officials have called for a strategic partnership with China, the foundations for such a venture are weak. However, they do signal the underlying intent and that is what ought to be considered relevant from a strategic perspective.

Much more important than trade or cultural penetration, China’s influence in Mexico is particularly significant on two fronts: as supplier of inputs to the illegal drug industry often based in Mexico, particularly fentanyl; and as an illegal point of entry by Chinese migrants into US territory.

Chinese migration to the US through Mexico has grown exponentially over the past decade. Detentions at the border increased from 48 to 752 from 2015 to 2016, while the estimated illegal Chinese population in the US, the third largest, was assumed to be of three hundred thousand in 2016.[ix] These numbers would appear to be minor when compared to other nationalities, but it is their link with organized crime that is relevant.

On the drug front, Mexico has long been the largest single avenue of entry into the United States. Starting with marijuana produced in Mexico, almost a century ago, the Colombian mafias introduced cocaine since the 1950s. In the 1990s, Mexican criminal organizations took over the distribution business of South American drugs into the American market. In response to changing US demand, they have moved to synthetic drugs in the past decade. In contrast with marijuana, which was grown in Mexico, the only thing Mexican about synthetic drugs is the fact that they are manufactured in Mexico with mostly foreign raw materials, most of them of Asian origin, China being an important supplier. The significance of this is that the laboratories that produce these drugs establish themselves in Mexico since they face less risk of police interdiction than they would in the US. The latter touches at the core of Mexico’s vulnerability in this and other areas: lack of governance.

China has long seen Mexico through a geopolitical lens and acted that way: understanding that this is a triangular relationship regardless of temporary swings in mood by any of the parties involved. However, should the structural factors that tie the US and Mexico continue to weaken, it is to be expected that China would continue responding to Mexican overtures and exploiting every opportunity that presents itself.

The structural factors in the triangular relationship

China’s attractiveness to Mexicans stems largely from its size and exceptional ability to transform itself into an economic powerhouse in a generation. Not being the United States, Mexico’s powerful neighbor, adds to the picture. Much more significant is that Mexicans see themselves in the Chinese mirror and see, with envy, the lost opportunity that it has become. Very few Mexicans understand China or its nature. Yet, it stands out as a successful nation, which many Mexicans would therefore want to imitate.

Mexico’s attractiveness to China is twofold: on the one hand, it is a large country and a significant consumer market. On the other, it is another road of access to the largest market in the world.

Whatever way one sees it, the biggest factor in this relationship is neither Mexico nor China, but the United States. For different reasons, both China and Mexico see opportunities in each other that stem from the fact that the US is a natural and inevitable vertex in this triangle. And yet, the structural factors in this triangle make it clear that the drivers of this relationship are and will remain weak for a long time:

• In contrast with the United States and other developed countries, China is a nation that competes with Mexican products in the most diverse sectors; in fact, it has displaced entire industries, such as footwear, clothing, textiles, toys, and electronics.
• Mexico and the US produce different products (or similar products at different stages of the production process), thus sustain a naturally complementary economic relationship.
• As China reorients its economy towards consumption, the competitive nature of the Mexico-China relationship might diminish, which might open up opportunities for Mexican exports to its market.
• The size of the Chinese market today is unmatched by any other. India’s might one day be larger but, as of today, expanding into the Chinese market represents a potentially unique business opportunity.
• In economic, political, and military terms, China is a rising power that, in the long run, could rival the United States.
• In its consolidation process, China is building what has been called a “logistics empire,” through the construction of the One Belt, One Road initiative, to which it plans to dedicate hundreds of billions of dollars in the coming decades. Beyond logistics, it is a strategic project that entails top-down decision-making ability which contrasts with the decentralized nature of the United States.
• Some Latin American countries have been important factors in China’s growth plans, both as originators of raw materials and as markets. The rise and fall of economies like the Brazilian one in the last three decades exemplify China’s modus operandi: the Chinese remain a transactional power.
• China, as an emerging power, is challenging the so-called “world order” established after World War II, generating fear and rejection in the Asian region. There too, the United States is the factor of power that is being challenged.
• China’s strengths are obvious, but so are its weaknesses. It is a nation that has grown rapidly, but still suffers from the contradictions inherent to a country with extraordinary internal contrasts, an ageing population, and an authoritarian political system. Its challenges facing the future remain vast, both in terms of political stability as well as in surpassing the so-called middle-income trap, but so far it has proven capable of surmounting them. Should it succeed without altering its political system, the lesson to the rest of the world would be extraordinary, to the detriment of democratic systems.
• In contrast with other Latin American nations, especially Argentina, Brazil, and Peru, Mexico has not been a significant exporter to China. The latter results, first and foremost, because Mexico’s economy is not a relevant producer of raw materials, grains, and foodstuffs. On the other hand, China operates under a clear geopolitical conception and does not deviate from it. From this perspective, its distance from Mexico (leaving aside failed projects such as the Querétaro-Mexico fast train and the Dragon Mart) is explained more by the closeness that Mexico has with the US economy -that is, a geopolitical logic- than a strictly pecuniary one.

China unleashes passions in Mexico. Some see it as a model to be imitated, others as a threat to their markets and the country’s wellbeing. Beyond emotions, the structural factors of this triangle explain why Mexico’s economy is so tightly aligned to the US. Politics, however, could distort the economic rationale.

The true challenge that Mexico faces has nothing to do with China or with the United States. It has to do with its own weak system of governance that produces frequent crises, those that NAFTA was meant to allay and did successfully for decades. In the absence of that anchor of stability, Mexico would have to develop its own sources of trust and stability. From this perspective, it is critical to understand that Mexico’s problem is not corruption, drugs, or violence, but the lack of governance duly anchored in the rule of law. NAFTA was meant to help advance and strengthen the rule of law, which it did, albeit for the modern economy only. The so-called “China card” is not more than a symptom of the absence of a proper structure of governance and legality.

Conclusion

Mexico’s aims in its overture to China are limited and more emotional than substantial. An objective assessment of the three bilateral relationships in this triangle reveals that both China and Mexico are exploiting an American vulnerability, albeit with different goals. There is no reason to conclude that there is, as of today, a concerted strategy to profoundly change existing patterns in this triangle anytime soon.

Mexico’s government is exploiting the current situation to distance Mexico from the United States, at least politically, to satisfy an ideological view as well as internal politico-electoral objectives. As such, it represents a small danger to the United States. However, should this turn into a pattern, the long-term implications could become important. Thus, the main conclusion is that it is the US-Mexico relationship that needs addressing, for China is not a challenge at this juncture.

Most important, in contrast with China’s keen geopolitical eye on every action it takes, Lopez Obrador has much more limited aims and those relate to being left alone by the Americans, not leading an earth-shattering break like Cuba or Venezuela did in their time. In fact, the only way a strategy meant to really transform the China-Mexico relationship would succeed is if were conceived within the relationship that Mexico currently has with the United States.

In other words, any future relationship would probably be within the US-China-Mexico triangle, which could easily be expanded depending on the way the US-China relationship itself evolves. By the same token, it is obvious that Mexico could be a natural beneficiary of disinvestments in China, but the Mexican government is doing absolutely nothing at this time to make this possible or help it along.

But the truly relevant strategic piece in the US-China-Mexico triangle is the United States itself, which has been absent for the last four years and shows no sign of realizing the challenges it faces in its southern border and is oblivious to the (relatively easy) alternatives at its disposal.

Recommendations for Congressional Action

Rationale

Two forces attract a Chinese presence in Mexico. One is the nature of the Mexican political system, where President López Obrador is looking to distance Mexico from the United States, even as he weakens internal checks and balances; the other is the transactional nature of the Chinese government. The connection between the two is an extremely weak system of government and governance which was designed, whether intentionally or not, to function through a network of corruption that made the government work. It is in this context that NAFTA was such an important factor in the gradual process of reform that the country was undergoing. The core of my recommendations has to do with the quality and strength of Mexican governance, for therein lies the key to a stronger southern neighbor and border, as well as a lesser participation of China in the region.

1. First and foremost, strengthen ties between the two countries

The strongest supporters of democracy in Mexico are also the most reliable friends of the United States. Many of them are former students of American universities. The virtuous circle never fails, and it must be deepened and expanded in every area of life and the economy. There is no better antidote to Chinese interference than a citizenry that feels comfortable with its neighbors, on both sides. Hence, getting Americans and Mexicans to know each other better and eliminating sources of conflict is in both nations’ long-term interest.

Support all and every effort to continue reducing and eliminating obstacles to trade, investment and overall economic integration. Reinforce the supply chains among American and Mexican companies on both sides of the border. Help all efforts to increase students studying in each other’s country and increase scholarships to that effect. In a word, help both societies appreciate the others’ virtues. Foster active exchanges among judges, justices, legislators, regulators, and mayors. Promote workshops among teachers of both nations and fund cultural exchanges among actors, cooks and academics.

1. Help strengthen Mexico’s institutions

Mexico’s traditional political system was based on a strong presidency and a powerful political party that served both as a mechanism to channel disputes and conflict as well as a counterweight to the executive. Over the past three decades, a new system began to develop without a preordained design, but with a strong institutional and transparency bias. Since the 1990s, a strong credible supreme court was developed with proper anchors of independence and autonomy. A similarly autonomous national electoral authority and its respective tribunal was consolidated. An entity to make functional the freedom of access to information was founded, as were human rights commissions, a competition commission, a telecommunications commission, and several regulatory entities for the energy sector. These institutions gained standing and credibility over time. As of two years ago, all of them are under attack. Some have been eliminated, others neutralized, and most have been packed with individuals who are loyal to the president and usually neither independent nor technically competent.

Help strengthen these institutions and entities by exposing their growing weaknesses and supporting independent non-government organizations that are in the business of assessing, exposing, and improving the quality of these institutions and provide them with strong political backing. Foster and fund the training, professionalization, and capacity building of analysts and activists in the anti-corruption and transparency fields, preferably by observing best practices and ethics in American public and private institutions.

1. Help the adoption of digital technologies that do not support authoritarian practices

China’s (and other) technologies are a perfect match for a government bent on exerting increasing control over the population. These technologies have been used to persecute political rivals, independent institutions, and reporters. Instead of persecuting and prosecuting criminals and organized crime in general, these technologies have been diverted to use against political rivals and independent entities.

Support local and international efforts to combat the use of these technologies, expose their existence and help the growth of a strong liberal-democratic citizenry. Support independent institutions in the human-rights arena, those advancing democracy, and, especially, those developing better governance practices.

1. Support the fight against corruption, authoritarian technologies, and insecurity

As I argued, Mexico’s true challenge is one of governance. The efforts of the past three decades to develop a modern system of government, accountable to the people, failed because the core of the old political system never changed, the nature of its pervasive corruption (from the bottom up) was never altered, and all efforts to improve security and the system of justice never took root as they did not address the needs of the population. Instead of anchoring security from the lowest municipal level to the federal government, all effort, many of these actively supported by the US, were imposed from above, using the army rather than investing in local police forces and the local justice system. In a word, as imaginative and well-meant as many of those efforts were, none recognized that the problem was the basic structure of governance of the country.

***

China is an active player because it supports the status quo: sells technologies that can be used to control the population; and is willing to employ corruption methods to advance its objectives (and, in that, matches the nature of Mexico’s political system and practices). It finds in Mexico a potentially rich environment for its expansion because of the country’s weaknesses.

Mexico is a weak link in the North American region. Supporting a rapid transition to a stronger democracy is in the United States’ best interest not only to limit the growth of China’s presence in the country, but also to reinforce the North American region and the US’s weakest border. A more democratic and open Mexico was at the core of the NAFTA project. It is high time to rethink it and develop a more forceful approach to reach the objectives that are today as valid and relevant as they were when that program was first conceived in the 1980s.

Bibliography

Agendasia and Comexi, Hacia una agenda estratégica entre México y China, Comexi, México 2019 http://consejomexicano.org/?s=seccion&id=58

De la Calle, Luis, Tensiones Comerciales EEUU-China: Impacto sobre México, Comexi, Mexico, 2020, http://consejomexicano.org/index.php?s=contenido&id=5700

Ortiz, Roman, Mexico, China & the US: A Changing Dynamic, https://www.americasquarterly.org/article/mexico-china-the-us-a-changing-dynamic/

Runde, Daniel F, Sandin, Linnea, Opportunities for the U.S.-Mexico Economic Partnership under the Biden and AMLO Administrations, https://www.csis.org/analysis/opportunities-us-mexico-economic-partnership-under-biden-and-amlo-administrations?gclid=CjwKCAjw7diEBhB-EiwAskVi1-70ZwPp-KSh80y7CeG7Yx1T92OjQb-qTQoc4KmmVGucnUyyFZFG1xoCfbkQAvD_BwE

Luis Rubio

The old Soviet Union maintained cohesiveness due to the ideological monopoly that the Communist Party exercised during an era in which access to information was totally controlled by the government. In fact, says David Satter,* “the imaginary world of Marxist–Leninist ideology never really went away because the issue was never its validity but rather its political effectiveness. Mentally subjugated individuals can be treated as raw material for the purposes of the state, the reason why an ideology is so useful.” The pretention of the Mexican President to return to revolutionary nationalism obeys the same rationality.

But it was Marx himself who stated that history repeats itself, first as tragedy and later as farse. In contemporary Russia, ideological control has returned, but, as Marx anticipated, this time without believers, unadulterated authoritarian accommodation: a farse. There are no grounds to think that something different will be the result of a government dedicated to permanent manipulation without producing a sole positive outcome.

Lopez Obrador’s plan consisted of restoring power to the outdated presidency of the XX century and employing it to implement economic rectorship. To that end, the President has committed himself to eliminating any vestige of counterweights that could curtail his power. In the economic arena, he has dismantled the strategy of the development of the oil and electric industry that the previous administration had put together, with the express purpose of converting two unproductive and overly indebted companies into the main demand sources in the economy.

The restorer project is nearly concluded, and the result is a tragedy. Rather than a thriving economy, Mexicans have a moribund country, much more dependent today on the U.S. economy through exports than was observed during the past four decades, which the president vilifies so much. Investment, public and private, conspicuous by its absence; the old trade unionism is being replaced by a “new” unionism that is the same as the old one: corrupt and cacique-ridden, but this one dependent on the current president. Same song, different tune.

Civil liberties deteriorate by the day; the Supreme Court is impeded in exercising its function as counterweight, its justices silent in the face of abuses as monumental as those of eminent domain, preventive imprisonment and the extrajudicial faculties granted to diverse Executive entities. The old bosses (caciques in Spanish) of the education system carry on untouched, working at the service of the political control, thus denying present-day and future generations the opportunity of incorporating themselves into the development. In a word, instead of improving the lives of the poor (campaign slogan, “First the Poor”), reactivating the economy or truncating corruption, the government has recreated a farse of the idyllic world of the seventies that was never remarkable to begin with.

Should these trends persist, the present government will deliver a worse than pathetic result: a retracted economy, incapable of satisfying the needs of the population or the opportunities that the international world entails (starting with the U.S.–China trade conflict), exacerbated levels of unemployment (which translate into hundreds of thousands of migrants traveling headlong toward the U.S.), and burgeoning political conflict. Marx would say that it is a tragedy. Few Mexicans would contradict him.

The sought-after return to revolutionary nationalism is a farse because it entails an illusion: the belief that the world can adapt to a governor’s deliria. That era ended in crisis not (solely) because it spent in excess, but because the economic (and political) model that the president so craves ceased being viable in an open world in which information is ubiquitous. The president is trying to put the toothpaste back into a tube of reverie: one cannot return to the past, but one can indeed destroy the capacity of the country to develop itself and generate conditions for each and every Mexican to prosper.

The world of the last decades was replete with imperfections from which one administration after another fled, giving rise to an ambiance ripe for the arrival to power of a president whose only purpose was to return to the past: something different from which Mexicans had experienced but undefined, imprecise, thus attractive to many.

Three years later the evidence is overwhelming: the president has no plan other than that of elevating himself to be the country’s most powerful person, a myth in the making. To achieve this, he has destroyed rather than created and built, obstructed instead of promoted, and polarized rather than united. Tragedy or farse? Both: tragedy because he has impoverished the country and, especially, the poorest and most vulnerable population; and farse because he never had an alternative plan. It was all a caricature.

The Russia that Satter describes passed from the ideological control of Stalinist totalitarianism to the failed opening of Gorbachev, to the lustfulness of nineties criminality and now to the authoritarianism of Putin. Mexico’s president has demonstrated an absolute disgust for learning, heightening the risk of replicating the old authoritarianism without any of its benefits. Mexicans need effective counterweights.

*Never Speak to Strangers

www.mexicoevalua.org
@lrubiof
a quick-translation of this article can be found at www.luisrubio.mx

Mexico Today –  May 11, 2021
Luis Rubio

Order and chaos are two extremes of the same continuum. There are countries where order is paramount. Singapore is unrivaled in validating the major correlation between economic success and order: the rules are clear and are followed and enforced; punishment is accordingly exemplary, and therefore infrequent. On the opposite end are countries where chaos seems to reign, law enforcement is rather lax (if not non-existent), and yet economic success is undeniable. There are also countries with order aplenty (Russia, North Korea, Cuba) and others that are chaotic (Africa, Latin America), most with dismal economic performance. Where lies the difference?

An online video made me reflect on what makes things work. The video compares how people drive in orderly countries with those of a disorderly country like India. It clearly illustrates the contrasts between countries with established rules and those who forge them on-the-go. The video begins with several examples of cars arriving at an intersection and, in the absence of a traffic light or signal, continue straight ahead, presumably assuming the others will brake. The video ends with an intersection in India where no formal rule exists, but the system works nevertheless. Chaos creates its own order.

In countries characterized by the existence of clear and enforced rules, the population builds within itself a series of assumptions that make things work naturally, except when those rules disappear. A Canadian who comes to an intersection knows that, in the absence of a traffic light or a “stop” sign, he can cross carefree, something that no Vietnamese or Indonesian would take for granted. As the video illustrates, the Canadian (or German or Frenchman) ends up crashing because the two drivers instinctively applied assumptions that are invalid when there are no rules. On the other hand, everything adapts naturally in a country accustomed to chaos.

What works for street traffic doesn’t work for the economy. A stable economy requires clear, unchanging rules. More than order per se (or the absence of corruption), such stability creates conditions for savings and investment -hence growth. What makes Indonesia like Singapore is not order, but consistent rules of the game. In Indonesia, private investment legislation is not modified with each changing administration, nor do officials change how they work because of a new boss.

In a comparative study on how Asian and Latin American governments work, the authors quote a businessman: “I lived in Brazil and Indonesia and was responsible for a very similar operation. But in Indonesia I devoted myself body and soul to production and didn’t have to worry about anything else. Regulations were clear and didn’t change. Everything was different in Brazil. There I would wake up every morning wondering if I still had a job because not a day went by that regulations didn’t change”.

Over the last century, the Mexican government has been prone to inventing the wheel every six years. This created the phenomenon of the six-year economic cycle and was directly linked to the duration of the Mexican president’s term. Mexican savers, businessmen, and investors waited for the new administration to “show its true colors” before committing and risking their resources. For almost a century, each incoming Mexican administration changed the rules of the game, which prevented long-term projects from consolidating. Everything had to fit in the president’s six-year term. New economic tools like the NAFTA trade deal in 1993 began to change the six-year tradition because they created mechanisms that granted certainty and legal protection to investors.

President Andrés Manuel López Obrador disdains the need for certainty, clarity of direction, and the checks and balances that underwrite both. Bent on ignoring the world around us, the president imagines he can impose his own rules with no fallout. He tries to ignore things like the corruption inside his own governing coalition (as the recent collapse of a subway overpass in Mexico City shows). That’s why López Obrador’s actions will not yield better results than his predecessors’.  He does not understand (nor will he understand) that no one is going to save or invest in Mexico without certainty and credible sources of trust.

* Luis Rubio is chairman of México Evalúa-CIDAC and former chairman of the Mexican Council on Foreign Relations (COMEXI).  A Spanish version of this Op-Ed appeared first in Reforma’s newspaper print edition.

 Twitter: @lrubio

https://mexicotoday.com/2021/05/11/opinion-order-and-chaos-lessons-for-mexico/

 www.mexicoevalua.org
@lrubiof

Mexico Today –  May 05, 2021
Luis Rubio

In an old Prussian tale, famous in the legal world, a king decides to expropriate a miller’s estate because it obstructs the view from his palace. The miller goes to the higher court in Berlin, who agrees with him and forces the king to pay him compensation. Hence the phrase: “There are still judges in Berlin”. In the current Mexican context, three recent decisions handed last week by the country’s top electoral tribunal (TEPJF by its Spanish acronym) can be described as historic. At the very least, the rulings halt what seemed like an inevitable slide into chaos.

Two of the rulings addressed the candidacies of two members of Mexico’s Morena governing party attempting to run for the state governorships of Guerrero and Michoacán, along the country’s Pacific coast. In both cases, the aspiring candidates did not comply with submitting their pre-campaign expense reports before Mexico’s National Electoral Institute (INE by its acronym in Spanish) by the established deadline. It might seem like a trivial matter, but filing expense reports is required by Mexico’s law. President Andrés Manuel López Obrador’s Morena party, however, refused to accept the INE decision rejecting both candidacies. After a weeks-long tug of war -and several presidential press conferences brimming with the usual insults- TEPJF ruled in favor of the INE’s decision. This was particularly notable due to the fact that the electoral tribunal seemed hopelessly intimidated and subdued by president López Obrador.

The third ruling is much more significant because López Obrador’s Morena party and its allies had successfully managed to maneuver a higher number of seats in Mexico’s Lower House after the 2018 presidential election. The trick involved swapping members of Congress among those parties that are part of Mexico’s governing coalition in the Lower House. Morena’s electoral coalition ended up officially having 334 seats in the Lower House when in reality, the Mexican Constitution sets an absolute limit of 300 and an overrepresentation of no more than 8 percent when allocating proportional representation members. If this rule, as set forth in Mexico’s law, had been upheld in 2018, the Morena party would not have had the supermajority that it currently enjoys. This maneuvering has yielded success to Morena by passing one reform to the Constitution after another without the slightest interest in consensus-building. Originally that was the law’s original intention. One can prompt negotiation among parties by limiting the number of representatives per political party.

Regardless of the odds that the governing Morena party along its allies could obtain in the coming June mid-term election, last week’s TEPJF decision was historic. The ruling went against López Obrador own desires. Beyond the substance of the ruling (unexceptional in itself), the TEPJF tribunal dared challenge the Mexican President, a milestone in his administration and hence its extraordinary significance.

The TEPJF tribunal’s ruling against overrepresentation in the Mexican Congress touches the core of much of the disagreement that has consumed Mexico in recent decades. To sum up, the country has been engrossed since the 1960s in a disagreement over its future. Some politicians want Mexico to return to an era of “revolutionary nationalism” while others want a modern Mexico, open to the world.

The Mexican government’s decision in 1982 to nationalize Mexico’s private banks, a visceral decision by  then president López Portillo divided the country, and placed two camps at odds. It also ushered in an era in which the Mexican Constitution repeatedly (and contrarily) underwent reform with no attempt at building a consensus to confer longevity to the reforms. During the 1990s, reforms were hammered out between the longtime hegemonic party PRI and the center right PAN, excluding the PRD. Mexico’s 1996 electoral reform was agreed on by the three main Mexican political parties. In the end however the PRD didn’t back the regulatory law at the time. The reforms that followed, particularly those of the former Peña Nieto Administration, alienated half of the voters, opening the door for the reversal that López Obrador has now carried out. The point is that political conflict is reflected in how legislating is conducted, especially in constitutional matters, intensifying differences and polarizing the country. Instead of adding, it imposes itself on forces and ends up subtracting. López Obrador did not pioneer this course of action, he is only inflaming it.

Under normal circumstances, last week’s TEPJF tribunal rulings would have been run-of-the-mill, for they are neither exceptional nor unprecedented. However, in the current context, the court’s decisions constitute true milestones that cannot be overlooked or minimized. In line with the professional and courageous manner in which Mexican federal district judges acted to halt AMLO’s electricity reform and recently, the collection of Mexicans’ biometric data just for using a cell phone. The electoral court prevailed over the preferences of a President who doesn’t skimp on threats or insults to try to get his way.

Now the ball is in Mexico’s Supreme Court’s court, which has scores of pending issues, all of them burning and of the greatest significance. Confidently, the justices that sit on the Supreme Court will read the writing on the wall of this week’s rulings. The high court has three key decisions pending that directly impact Mexicans’ freedoms, the validity of the Mexican Constitution, individual rights, and countless relief proceedings frozen by orders of whom shouldn’t hold sway over them. Perhaps this is shooting for the moon, given the way that Chief Justice Zaldivar responded to the recent controversial provision to extend his term and that of his friends. Regardless, the INE and the TEPJF acted independently at a key moment for Mexico. One win after many losses.

* Luis Rubio is chairman of México Evalúa-CIDAC and former chairman of the Mexican Council on Foreign Relations (COMEXI).  A Spanish version of this Op-Ed appeared first in Reforma’s newspaper print edition. 

Twitter: @lrubio

https://mexicotoday.com/2021/05/05/opinion-mexico-there-are-still-judges/

www.mexicoevalua.org
@lrubiof

Mexico Institute
4/28/2021
By  Luis Rubio

As the midterm elections draw closer, Mexico’s broken politics are beginning to take their toll. The independent electoral authority (INE), one of the country’s greatest institutional achievements after decades of fraudulent elections, is under fire by the AMLO and his party, which are also undermining the Supreme Court’s authority. The few remaining vestiges of the intentional, albeit still weak, institutional buildup that took place from the 1990s on is being subverted by a president who won a majority thanks to the existence of those institutions. The question is what the ongoing process of institutional destruction might bring with it, particularly if the president’s party ends up losing the coming June 6 contest.

Up to now, the Biden administration has done all it can to avoid addressing the increasingly chaotic situation in Mexico. Concerned with their own domestic priorities, the new US government appears to have taken for granted that López Obrador can and will maintain the lid on his country’s problems so that they do not spill onto the US, a dubious assumption at best as waves of mid-age Mexican migrants join with younger Central Americans, creating havoc along the border. Paraphrasing Trotsky, Biden may not be interested in Mexico, but Mexico’s troubles are likely to come back to haunt him.

In the 1980s, the United States and Mexico learned to cooperate and work together on the issues that inevitably spring from such a complex border between two nations as different as these two are. The foundation for that cooperation stemmed from an agreement on two basic principles: The first principle was a shared vision regarding the future of the relationship among the two neighbors. This included greater economic integration, an agreement not to let historical grievances be used to distance the U.S. and Mexico, and the opening of greater student exchange between the two countries.

López Obrador and Trump shared a vision of the bilateral relationship that had nothing to do with what was agreed to in 1988. Two inward-looking nationalists, both wanted to distance their nations from the other and, in this, they found common ground. López Obrador responded to Trump’s threats, in exchange for which he got Trump not to focus on López Obrador’s ever more destructive domestic policies causing domestic disarray and ever greater organized-crime-related violence.

The second principle was agreeing to solve the bilateral issues that afflicted the US-Mexico relationship without them contaminating each other. The countries adopted the principle of compartmentalization, which allowed managing this complex relationship without too much fuss. This worked well until Donald Trump’s arrival to the White House in 2017.

With both the shared vision and the agreement to compartmentalize gone, the two nations have little to anchor the relationship on and to address the daily issues that regularly emerge without advance notice. And yet, with about two billion dollars of daily trade between the two nations, and a border that becomes more complicated by the hour, the two governments will soon find they cannot avoid dealing with each other. But it’s not clear how they can address the looming issues in the absence of a basic set of rules of coexistence.

The midterms are likely to provide ample incentive for the US to change its approach. Odds are that the president’s party, Morena, will, at best, get a flimsy majority in the Chamber of Deputies, nothing to do with the artificial overrepresentation it garnered back in 2018. It is even conceivable that the opposition parties might steal the majority out of Morena’s jaws. Nothing is guaranteed at this stage but, whatever the outcome, the one certainty is that neither scenario -a big win nor a big loss, however, the latter is defined- will satisfy López Obrador, who sees himself as the nation’s savior.

López Obrador is certain that he will change the course of Mexican history and is thus willing to entertain any action or policy that might make that possible. Therefore, he is likely to radicalize his policies in both political and judicial terms: incarcerating emblematic people without proper judicial authority and regardless of whether there is merit for such an action; attacking the few remaining independent institutions, such as the National Electoral Institute (INE); further undermining the Supreme Court’s authority, and further dividing Mexicans. Inevitably, the spillover will hit the United States. What is coming will not be enticing for both countries, but it will demand their close attention, for Mexico is the US’s weakest border. Much more transcendent, the deeper the chaos in Mexico, the dearer the bill and consequences for the American people.

Luis Rubio
Mexico Institute Advisory Board Member; Chairman, México Evalúa; Former President, Consejo Mexicano de Asuntos Internacionales (COMEXI); Chairman, Center for Research for Development (CIDAC), Mexico

https://mexicoelections.weebly.com/op-eds/biden-and-the-mexican-midterms