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With Elections to Win, One Nafta Team May Prefer to Keep Talking

February 23,2018 20:14

The governing party's claim to preside over economic stability -- one of the few PRI campaign themes that has traction -- would take a hit. Stretching the talks beyond the election would “diminish the risk of paying the costs for a failure in ...and more »

Few people are cheering the prospect of several more months of Nafta talks. Mexico’s ruling party may be among that small group.
The country is cranking into campaign mode at the same time as it prepares to host the latest round of trade wrangling next week. That means Mexican negotiators have a kind of dual mandate. They have to pursue the best outcome for the nation, while keeping one eye out for their bosses in the governing PRI, which is seeking to hang on to the presidency in July’s election.
And analysts say the party’s interests won’t be best served by a Nafta deal before the vote. Renegotiation was a U.S. idea in the first place, and President Donald Trump has framed the process as a zero-sum game. Anything he’s OK with is likely to be presented as a defeat for the others.
‘It Could Cost’
For that reason, “the best thing for the PRI is not to sign anything now,” said  Jorge Chabat, a political scientist at the Center for Economic Research and Teaching, or CIDE, in Mexico City. “If the deal is seen by the public as a concession, it could cost the party.”

Jose Antonio Meade

Photographer: Alejandro Cegarra/Bloomberg
PRI candidate Jose Antonio Meade is running a distant third in most opinion polls. Still, the party has ruled Mexico for about 90 of the past 100 years. It has deep pockets, and a financial
grip on the media. So Meade, who was finance minister until recently, can’t be ruled out.
But a collapse in Nafta talks before the election would deal a further blow to his prospects, according to Chabat and other analysts. If Trump follows through on his threats to pull out, it would likely plunge Mexican markets into turmoil. The governing party’s claim to preside over economic stability -- one of the few PRI campaign themes that has traction -- would take a hit.
Stretching the talks beyond the election would “diminish the risk of paying the costs for a failure in negotiations,” said Javier Martin Reyes, another analyst at the CIDE.
The Meade campaign said in response to questions that it “backs the Nafta negotiating team and hopes for a satisfactory conclusion that’s beneficial for the interests of Mexico and its citizens, regardless of the timing and political process.”
Lame Duck
To be sure, Mexico’s influence over the talks is limited. It’s the smallest of the three Nafta economies. But with plenty of sticking points from car-parts to food, negotiations could require more time anyway.
In a recent interview, Economy Minister Ildefonso Guajardo hinted as much. And he raised another calendar issue that makes the second half of 2018 problematic too.

Andres Manuel Lopez Obrador

Photographer: T.J. Kirkpatrick/Bloomberg
Guajardo said that negotiators on all sides agree that reaching a good deal is more important than the timing -- and that elections shouldn’t be allowed to get in the way. He also said that the goal is “to get something done within this Mexican administration.”
The administration will be around till December, because Mexico has a five-month lag between elections and inauguration. But after July’s vote, it’ll be a lame duck -- and the country will have a government-in-waiting, with a fresh mandate, that may take a different view on Nafta. Especially if it’s headed by Andres Manuel Lopez Obrador.
Rip It Up
The leftist known as Amlo, a clear front-runner in the polls, has toned down his past hostility and says he wants to keep the trade pact. But he still finds plenty not to like. He blames Nafta for displacing poor farmers, and has been calling on Mexicans -- who’ve gotten used to an
unhealthy diet of U.S. imports -- to eat more local food.

Ricardo Anaya

Photographer: Alejandro Cegarra/Bloomberg
For Lopez Obrador and his closest challenger, the business-friendly Ricardo Anaya from the PAN party, there’s little advantage in getting into specific details of the Nafta negotiations. What plays for them is blasting the PRI government for being too soft on Trump, a winning formula that can be applied to everything from trade talks to migration.
And that’s what they’re both doing -– sometimes in identical terms. Lopez Obrador would stop Trump from treating Mexico like a “doormat,’’ his campaign chief Tatiana Clouthier said in an interview. Anaya used the same word at a rally in Mexico City last weekend.
Anaya has called for closer cooperation between Mexico and Canada in designing a Nafta strategy. Showcasing his credentials as the best man for that job, campaign
ads have shown him addressing academic audiences in the other Nafta countries, speaking fluent English and French. (They triggered a backlash on Mexican social media, where critics painted the 38-year-old leader as an out-of-touch elitist.)
Approval of a Nafta overhaul should be left to whoever takes over as president in December, the Anaya camp argues. As for Amlo, he says that if he arrives in office and finds that a lame-duck predecessor has signed up to something that isn’t in Mexico’s interests, he’ll just
rip it up.
— With assistance by Eric Martin

Elections,Mexico,Donald John Trump,Economic Research,Mexico City,Social Media,Food,Imports,Canada,Americas,politics

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