López Obrador: getting help from Trump. López Obrador: getting help from Trump.

If Trump kills NAFTA he aids leftist AMLO

The presidential candidate recognizes NAFTA's benefits; Trump does not

Mexico will be electing a new president in six months. Voting will occur days or weeks after we are likely to know if the 25-year-old North American Free Trade Agreement (NAFTA) survives ongoing negotiations between President Donald Trump, Mexico and Canada.

ADVERTISEMENT

Advice for President Trump: if you leave NAFTA the entire American midwest that you carried in November 2016 will lose. In 2016 Mexico ($17 billion) and Canada ($20 billion) bought $37 billion worth of agricultural products from the United States.

No NAFTA? Australia, Argentina and Brazil will step in and skim billions into their pockets while your voters in Iowa go bankrupt.

Iowa, Kansas, Missouri, Nebraska and both North Dakota and South Dakota might very well plunge in to economic chaos. Mexico’s economy and polity will also be affected because a Trump rejection of NAFTA will help the most extreme leftist in North America, Andrés Manuel López Obrador, win the July Mexican presidential election.

López Obrador, also known as AMLO, is even further to the left than Sen. Bernie Sanders, Sen. Elizabeth Warren and Sen. Kamala Harris.

Mexicans have twice rejected the former mayor of Mexico City for the country’s presidency.

López Obrador demanded a recount of the 2006 presidential election and refused to accept the result when 16,000 voting district recounted votes and cemented his 1% loss to Felipe Calderón. He did not concede; rather, he declared himself the legitimate president.

ADVERTISEMENT

His peasant followers shut down parts of Mexico City, the capital, for weeks. The move cost Mexicans millions of dollars in business and taxes. He traveled around the southern part of the country appointing “officials” of his presidency.

President Trump’s anti-NAFTA verbiage and calls for a wall on the Mexican border are two significant views that are helping López Obrador run for president in Mexico again — this time under the partisan umbrella of a political party he created to push his candidacy, Morena. (Morena means dark, like in dark skin.)

Last time he was the candidate of the official leftist party, the Democratic Revolution Party (PRD).

For July’s election, the leftist PRD has joined forces with the center right National Action Party (PAN) that won the presidency with Vicente Fox (2000) and Felipe Calderón (2006).

The PRI is running a career bureaucrat.

Considering the violence and corruption which Mexico has seen under PRI President Enrique Peña Nieto, the party shouldn’t have any chance of winning a no-run-off election which will likely be decided by a plurality (just as the Fox election of 2000 was won with 43%).

The drug cartel wars are stacking up bodies throughout Mexico; vigilante groups are forming in towns everywhere, organized to protect themselves from cartels and corrupt government agents and agencies. A new American-style justice system is slowly being implemented with trials by jury, etc.

But the 500-year-old system that Mexico has labored under is slow to change or modernize.

There is confusion in the legal system. There is corruption at the highest levels. There is raging drug cartel chaos.

Now comes Donald Trump who realistically has no clue where Mexico “is” or how much Mexicans and Mexican NAFTA industries contribute to the United States.

The kicker here is that while López Obrador is virulently anti-American, anti-free enterprise and anti-American participation in Mexico’s important oil industry, he is aware that the Mexican auto industry has created an economic miracle in central Mexico with thousands upon thousands of manufacturing jobs that never existed before as well as thousands more jobs in factories that feed the entire North American auto industry.

In fact, even López Obrador knows that the American auto industry has been saved by the nascent Mexican auto industry. The $12 billion worth of exports to Mexico alone from the otherwise depressed state of Michigan is not chopped liver, it’s auto parts that would otherwise not exist without Mexican and Canadian markets to sell to.

López Obrador recognizes the benefits of NAFTA. Unfortunately, it is President Donald Trump who doesn’t recognize NAFTA’s benefits. Any damage Trump does to the trade agreement in coming weeks will be reflected by more votes for López Obrador in Mexico.

Raoul Lowery Contreras is the author of “The Armenian Lobby & U.S. Foreign Policy,” (Berkeley Press 2017); “The Mexican Border: Immigration, War and a Trillion Dollars in Trade,” (Floricanto Press 2016). He formerly wrote for the New American News Service of the New York Times.

Stories from our archives that you might enjoy

  • Güerito

    “As a result of NAFTA, Mexican workers gained industrial jobs. In the auto industry, for example, employment in Mexico grew 620,000 between 1999 and 2016, while the US lost 360,000 jobs. Yet Mexican wages and working conditions remained suppressed. Although they produce for the same market, workers in the Mexican auto parts industry make 12% of the wages of US auto parts workers. Mexico’s labor costs, meanwhile, are now 40% below China’s, and its 2014 poverty rate was higher than it was when NAFTA began 20 years earlier. The massive surge in illegal immigration from Mexico to the US in the two decades after NAFTA was evidence of the failure of NAFTA to bring its promised prosperity and opportunity to the majority of that country’s workers.

    In both the US and Mexico, the gap between worker productivity and worker compensation widened relentlessly. Mexican manufacturing workers productivity rose 80% between 1994 and 2011, while their real wages actually fell about 20%—pulling down US wages, which rose less than half of the gain in worker productivity. The result was an upward redistribution of income from labor to capital in both countries.”

    https://qz.com/917175/trump-is-right-to-criticize-nafta-but-hes-totally-wrong-about-why-its-bad-for-american-workers/

    “But what about Mexico? Didn’t Mexico at least benefit from the agreement? Well if we look at the past 20 years, it’s not a pretty picture. The most basic measure of economic progress, especially for a developing country like Mexico, is the growth of income (or GDP) per person. Out of 20 Latin American countries (South and Central America plus Mexico), Mexico ranks 18, with growth of less than 1% annually since 1994. It is, of course, possible to argue that Mexico would have done even worse without NAFTA, but then the question would be, why?

    From 1960-80 Mexico’s GDP per capita nearly doubled. This amounted to huge increases in living standards for the vast majority of Mexicans. If the country had continued to grow at this rate, it would have European living standards today. This is what happened in South Korea, for example. But Mexico, like the rest of the region, began a long period of neoliberal policy changes that, beginning with its handling of the early 1980s debt crisis, got rid of industrial and development policies, gave a bigger role to de-regulated international trade and investment, and prioritized tighter fiscal and monetary policies (sometimes even in recessions). These policies put an end to the prior period of growth and development.”

    https://www.theguardian.com/commentisfree/2014/jan/04/nafta-20-years-mexico-regret

    • Mike S

      I find nothing offensive about his “peasant followers”. Maybe ALMO has a little Benito Juarez in him. From 2000 to 2018 Mexico’s population grew 25 million. Mexico would have been far worse off without NAFTA. Mexico’s problem is not NAFTA, it’s the horrific wealth inequality and “trickle down” conservative voodoo economics just like it is in the US. ALMO is no narcissistic, bigoted,unqualified conman and he did a great job as CDMX mayor. He might be just what Mexico needs in these trying times.

      • I agree

      • raoul contreras

        Benito Juarez was never elected by the people. AMLO has been rejected twice.

        • Mike S

          ALMO was elected “mayor” of Mexico City- did a great job, and left office with an 84% approval rating. His later loss in a presidential election was highly disputed. He will be elected president this year. Who is going to beat him?

    • raoul contreras

      Wrong, my family helped found the PAN in 1939. If I lived in Mexico I would be a Panista. You might want to check the level of poverty when Fox became President and when Calderon left it 12 years later. You ight also check agricultural production from when NAFTA went into effect and today, then compare that to pre-Nafta agriculture.

      • Güerito

        I have, generally, supported the PAN party. My Mexican girlfriend and most people I know down here are PAN supporters. But I’m a little concerned in the last few years about how many PAN members tend to support the current PRI government and how PAN hasn’t been very forceful in attacking corruption.

        If you can find economic data showing a real drop in poverty in Mexico between 2000 and 2012, I’d like to see it. Poverty has increased in Mexico during EPN’s term, but I believe the evidence shows that Mexico has been stuck at a 45-50% poverty level (and about 10% extreme poverty level) for well over 20 years now.

    • Mike S

      Interesting article from the Financial Times- link below. The gist is that automation , robotics, 3-D printing, etc have been the principle factors in the millions of manufacturing job loses in US, not trade. The world is changing. This is why I am as firm believer in Bernie Sander’s call for free tuition at all public colleges. A college degree is what a high school degree used to be. The US needs to move up the food chain; we can not compete directly with the cheap assembly line labor of countries like Mexico and China even if their wages doubled. Somebody has to the innovation, design, engineering, maintain the robotics, write the software, invent stronger/lighter/cheaper manufacturing materials, etc etc. This is why Silicone Valley thrives and Michigan has struggled the last 18 years. Mexico’s obscene low wages are something that Mexico will have to figure out internally and politically. NAFTA can demand work-place safety and environmental standards, but they really can’t dictate wages.

      https://www.ft.com/content/dec677c0-b7e6-11e6-ba85-95d1533d9a62

      • Güerito

        In case you haven’t noticed, my comments tend to be directed at how policies, of any sort, affect Mexico and Mexicans – not the US. My post above illustrates that, contrary to popular belief, Mexico has not benefited, or at least has not experienced real economic growth, in the 20+ years since NAFTA was signed.

        I live in Mexico and this is a Mexican news site. I really don’t have much interest in US politics or what’s going on there, if you want to know the truth.

        • Mike S

          That’s fine, but if you are interested in trade and the Mexican economy, you need to pay attention to what’s happening up north- especially with Trump in office. The two countries are enormously integrated both economically and culturally even though Trump is blind to that. Total trade is over $560 billion a year. I personally think that the low wages and lack of growth in Mexico is an internal problem and not a problem directly caused by NAFTA. I wonder how much more investment and how much more tourism would be happening if there was no bloody drug war and all the corruption that massive amount of cash moving south causes. Mexico News Daily covers a lot about how US politics affects Mexicans. For sure, ordinary Mexicans deserve a more than what they are getting from their leaders and Trump is no help whatsoever.

          • Güerito

            Just sticking to Mexican, Spanish language news sources it’s impossible to not keep up with what’s going on in the US. Especially regarding Trump since, as you say, it can affect Mexico. I was kinda pissed when through most of the last year Trump stories would lead the news down here, but that’s dying down a little now.

            What I avoid is all the inside detailed politics and discussions of policy in the US. I got sick of that a long time ago. And I used to teach US Government at the college level….

          • Mike S

            When the biggest economy and most powerful country in the world elects a grossly unqualified, narcissistic, pathologically lying, bigoted conman to lead- everyone is affected- especially Mexico. Trump is very insecure and has a pathological need to be the constant center of attention. He can be very dangerous with his authoritarian tendencies and ignorance. I am guilty of starting out commenting on news articles and then getting off topic arguing against the Trumpeteers who post here. It is easy to ignore if you are tired of it. I appreciate your posts even when we disagree.

  • DreadFool

    and remember, The Russians are meddling with the price of tortillas

  • WestCoastHwy

    “Mexico will be electing a new president in six months,” Bull Sh*t, “PRI will be electing a new president.”

    AMLO will get the Machete!
    .
    .

  • Güerito

    U.S., Mexico unions file NAFTA labor complaint to influence talks:

    MONTREAL (Reuters) – U.S. and Mexican unions formally complained to the U.S. Labor Department on Thursday that Mexico continues to violate NAFTA’s weak labor standards, a move that they hope will persuade U.S. negotiators to push for stronger rules.

    A key complaint is that NAFTA has failed to lift chronically low Mexican wages that have steadily drawn U.S. and Canadian factories and jobs to Mexico by allowing companies there to thwart unionization. Lower health and safety standards also persist in Mexican factories.

    AFL-CIO President Richard Trumka said in a statement that Mexico’s non-compliance with even its 1994 labor obligations shows that NAFTA is ”a failure.”“Mexico’s low-wage, low-rights economy keeps wages down in all three countries and has failed to develop Mexico as a larger market for U.S. exports,” Trumka added.

    https://www.reuters.com/article/us-trade-nafta-labor-exclusive/u-s-mexico-unions-file-nafta-labor-complaint-to-influence-talks-idUSKBN1FE1ZE?il=0

FreeCurrencyRates.com
ADVERTISEMENT