For those interested in Mexico’s current affairs, 2020 was anything but boring and 2021 will not likely disappoint either. Amid the current Covid-19 pandemic context, we can expect political social, and economic stress as the Mexican economy struggles to come out of recession and as the country enters the third year of President Andrés Manuel Lopez Obrador’s self-described “historic transformation. Here are some things to put on the watchlist for the next year:
Mexico will have a critical electoral process in June 2021 with 14 governorships and the control of the Lower House of Congress up for grabs. The election could be a turning point for AMLO’s “regime-change” strategy should his MORENA party lose control of the Lower House. It will also determine if the party can consolidate by itself without AMLO competing on the ballot (at least directly). Most analysts consider that the President’s strong popularity and approval rating (around 60 percent) help MORENA, but not the other way around. Not surprisingly, the President was successful in getting the Mexican Congress to pass a constitutional reform to allow a referendum to be held in 2022 on whether he remains in power or if he is removed. Finally, next year election will also help assess the state of opposition parties and their chances in challenging the incumbent party in the presidential election of 2024. This is even more clear now that PAN, PRI and PRD have agreed, in principle, to form a coalition and compete together in some districts and states.
USMCA first disagreements
During October, Mexican exports reached US $42 billion with around 80 percent of them going to the United States. Domestic consumption is weak and investment still negative and, thus, the external market is crucial. AMLO has made the U.S., Mexico, Canada Agreement (USMCA) a centerpiece of his economic policy and plans to take the economy out of recession. Imperfect as it is, USMCA provides certainty in a sea of economic uncertainty. Its predecessor, NAFTA, was criticized –particularly by Democrats in the U.S.– as being soft on enforcement of labor and environmental standards. USMCA has tighten provision in these areas and we can expect the first disputes to occur soon. The potential impact of these controversies should not be overestimated since Mexico and the U.S. trade almost 1.5 billion dollars every day without much problem. However, the way these disputes are handled will be important for economic players on both sides of the border.
The role of the military
AMLO has surprised many with his cozy ties with the Mexican armed forces. More importantly, he has assigned them to new areas, some of which, at a minimum, can be described as unusual. Military involvement in public security tasks has been under debate for decades in Mexico and, given the magnitude of the present security challenge, it could even be argued that there are no other feasible options for the time being. Yet, it is the participation of the Mexican military in tasks commonly assigned to civil authorities or even the private sector that raises more questions. These tasks include: building and operating the new national airport, managing the country’s ports and customs infrastructure, and even constructing branches for one of Mexico’s development banks. The military is one of the few institutions that still enjoys high levels of trust among Mexicans (over 70 percent on most polls) and, unlike their Latin American peers, it has remained at arms-length from politics since the Mexican Revolution of the early 20th century. This becomes more difficult if the military involves itself in the development of key projects/programs of any administration.
To its credit, the AMLO administration was able to establish a functional relationship with President Donald Trump. If dealing with the U.S. sometimes calls for a pragmatic foreign policy, even more so during the past few years. The expected collision between the two controversial leaders was not only averted, but they also actually established a rapport that was viewed as too close in Mexico and by Democrats. This became more evident with AMLO’s decision to hold on congratulating U.S. President Elect Joe Biden until he is formally declared the winner of the November election. The situation has generated all sorts of expectations about what could happen once Biden sits occupies the Oval Office. The importance and weight of the U.S.-Mexico bilateral relationship for both countries should be sufficient to keep things on track. However, there is some mending to do, specially with Biden’s team and some key Democrat legislators.
Tension between the federal and state governments has been present throughout Mexico’s slow transition to democracy. The distribution of tax revenues and expenditures has been at the core of the dispute. Nevertheless, during the past two years, tensions reached a new level. Problems started early on in AMLO’s administration with the appointment of 31 “super-delegates” to manage federal programs at the state level, challenging the authority and political influence of state governors. In addition, not unlike what happened during the past administrations, dealing with crime and insecurity further strains things. Coordination between governors and their security forces with those of the federal government is a constant source of intergovernmental tension. Finally, the Covid-19 pandemic resulted in an open confrontation and in a new inflection point in the relationship between the President and several state governments. The National Conference of Governors, which traditionally served as a meeting ground with the President, has essentially been dissolved and at least one new group of 10 Governors has formed in clear opposition to the President and his policies.
The Cienfuegos case
The arrest of General Salvador Cienfuegos, the former Mexican Defense Minister, by U.S. authorities captured front pages in Mexico and the U.S. and sent shockwaves through the bilateral relationship and in Mexico’s political circles. Cienfuegos was detained in Los Angeles, California on drug trafficking charges last October. The General was later released in November and returned to Mexican territory upon request of the Mexican Government, which offered to conduct an inquiry of its own regarding the allegations. The repercussions of the whole incident would seem to only have started and all eyes will now center on how the Cienfuegos investigation ends. AMLO has made the fight against corruption perhaps the single most important objective of his government. Likewise, it is unclear how the U.S.-Mexico bilateral cooperation on security and law enforcement will be affected by this. Already a bill to regulate the presence of foreign security officials in Mexican territory is making its way through Congress.
Gerónimo Gutiérrez Fernández is senior advisor at Covington and Burling, LLP and partner at BEEL Infrastructure. Twitter: @GERONIMO_GF