Trump’s threats and Mexican problems

Milenio 04/27/17
Carlos Puig

It was not difficult to imagine: insofar as Donald Trump’s promises, particularly those which, albeit exciting his supporters, faced the doubts—or even blatant rejection from the US political class—Trump would have to return to matters with a much broader social base among voters and legislators.

His stumbles in repealing and substituting Obama’s healthcare reform has led him to turn to other, much kinder, promises.

Now, NAFTA is in his sights.

This morning, according to information from the US media, Trump had chosen a strategy that would be much more complicated for Mexico in the short and long term.

Let me explain:  thanks to the US laws that give Congress the power over international trade, the best, and nearly the only way, in which the US can, in practical terms, negotiate an international agreement regarding trade is through a procedure that has gone under various names in the last years, but by which Congress allows the Executive branch to negotiate, and then Congress commits to vote yea or nay, but it may not modify anything. That is how it was done with NAFTA and several other agreements. The most recent authorization to the Executive branch, requested by Obama, will expire shortly.

The White House has run into resistance from its party’s legislators to renew that permit, among other matters, because they do not want to renegotiate NAFTA from Trump’s propositions.

Trump then leaked that he would leave NAFTA. If you don’t want me to leave, then allow me to negotiate; in any case, you will have the final vote, was the message.

Trump has raised the tone against the Treaty, and even taken unilateral measures against Canada in the last few days.

The peso dropped, as did the stock market, markets panicked.

At ten o’clock at night, Washington time, the White House said that Trump had spoken with Enrique Peña Nieto and Justin Trudeau and assured them that he didn’t want to exit the treaty and that he wanted to negotiate.

He bared his teeth. He displayed his power.

That is how he negotiates.

That only means that the affair could delay further, that real negotiations will not begin, which extends investors’ uncertainty, causes the peso to suffer, and as Jorge G. Castañeda has pointed out for some time, will overlap with our elections, which makes it terribly complicated to know how Mexico will meet this challenge.

 

Text translated by the Instituto VIF from the original published by Milenio.
Link: http://www.milenio.com/firmas/carlos_puig/amenazas-donald_trump-problemas_mexicanos-tlc-tratado-libre-comercio-milenio_18_946285379.html