Shifting Sands, and So Little Time


Photo: businessfinancialpost.com

By ANTONIO GARZA    

Over the past few weeks, the U.S. Congress has been focused on impeachment proceedings. With so much activity and the situation very much in flux, I recommend Axios for up to date coverage and Five Thirty Eight for polling on the ongoing constitutional process.

This week, the U.S. Congress narrowly avoided a government shutdown, as congressional leaders have yet to reach a compromise on comprehensive spending bills. House and Senate leaders were eventually able to pass a stopgap measure, which U.S. President Donald Trump signed on Thursday, Nov. 21, hours before the deadline, funding the U.S. government through Dec. 20. But Congress will have to keep negotiating to reach a compromise on thornier issues, such as the president’s desired border wall funding.

With the year’s end quickly drawing near, global trade agreements also appear to be increasingly out of reach. It it is looking unlikely that there will be a U.S.-China agreement by the end of the year, or even in early 2020. And, after more than two years, the U.S.-Mexico-Canada Trade Agreement (USMCA) is also not yet a done deal.

On Thursday, Nov. 21, Speaker of the House Nancy Pelosi noted that even if Congress was able to get a deal soon, there wouldn’t be enough time to finish the agreement by year’s end. Freshman democrats and U.S. labor organizations have continued to express skepticism that Mexico’s higher wage laws will be adequately enforced and reduce the differences among the salaries in the three countries. Without their support, it will be very difficult to move forward with the agreement.

For months, the United States’ trade battles have dragged down global growth. Yet, assuming that the trade deals eventually come to fruition, there could be a slight reversal of the recent negative trends. Earlier in the week, Morgan Stanley projected that global growth could shift upward from 3 percent to 3.2 percent, and Goldman Sachs published analysis suggesting that global growth should stabilize in 2020, as tariffs and monetary policy ease up.

Across Latin America, there has also been ongoing political uncertainty. In recent weeks, protestors have filled the streets and clanged pans to make their voices heard. Their discontent has been widespread and varied, taking shape against corruption, election tampering, economic malaise and unfulfilled promises to reduce economic inequality.The current wave of protests began in early October, as Ecuadorians paralyzed the federal government and country over a slashed fuel subsidy and austerity package. By mid-October, an uptick in the Santiago metro fare sparked protests and brought general discontent into the open and into the streets of Chile. On Nov.10, after several weeks of protests and an international auditor confirming electoral irregularities, the Bolivian military pushed President Evo Morales to resign and ushered in a power vacuum and even more protests. And on Nov. 16, Venezuelans took to the streets once again by the thousands to support Juan Guaidó and stand up to Nicolás Maduro’s grip on power.

In general, Mexico has largely stayed out of the protests rocking the region. However, on Nov. 12, Andrés Manuel López Obrador’s (AMLO) administration dove into the fray and offered Evo Morales political asylum one day after he was forced to resign. A few hours later, Morales had accepted the offer and was heading north on a Mexican plane, with a photo soon emerging of the former Bolivian president holding up a Mexican flag. However, the move has not gained the support of all Mexicans. According to a Reforma poll, 58 percent of surveyed Mexicans opposed Morales’ arrival to their country.

Amid this shifting international environment, López Obrador and his administration have had to contend with a wide range of other challenges. Most significant is the country’s ongoing security challenge. A month ago, armed groups killed 13 police officers in Michoacán and on Oct.18, Mexican armed forces captured and then were forced to release one of El Chapo’s sons, Ovidio Guzmán, in Culiacán, Sinaloa. The latter incident unfolded as tens if not hundreds of Sinaloa Drug Cartel members rushed to Ovidio’s rescue, outnumbering the government forces and forcing the government into a humiliating retreat.

Less than a month later, cartel members also gunned down nine women and children from the LeBarón family — members of a Mormon community that is based in the northern states of Sonora and Chihuahua. The gruesome case, along with others, highlighted once again the country’s inability to tackle impunity or lower its record-breaking number of homicides. The incidents have also taken a toll on López Obrador’s popularity. His approval rating remains above 50 percent approval, but it has begun to slip in the wake of these security incidents.

Things have also been shifting on the energy front. On Nov.10, a hacker targeted Mexico’s state-owned energy company Petróleos Mexicanos (Pemex), requesting $5 million in ransom payments by the end of November. The company has stated that it will not pay the ransom and, fortunately, Pemex has maintained normal operations throughout the attack. However, the incident highlights vulnerabilities with Mexico’s critical infrastructure around the country.

In other changes for Pemex, López Obrador’s administration is now reconsidering allowing Pemex to add partners for exploring Mexico’s oil and gas reserves, which would allow the company to expand into more areas and share the cost and risk with private sector companies.

Antonio Garza is a U.S. lawyer who served is as his country’s ambassador to Mexico between 2002 and 2009. In recognition of his work, in 2009, the Mexican government bestowed on him the Águila Azteca, the highest award granted to foreigners. Prior to his appointment as ambassador, Garza served as Texas’ secretary of State from January 1995 to November 1997 and was also chairman of the Texas Railroad Commission. He is currently a lawyer at White & Case, specializing in cross-border issues.

 

Categories: Mexico, Mexico-U.S. relations, Opinion, PoliticsTags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

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