Mexico in the Midst of Geopolitical Chess
By ANTONIO GARZA, former U.S. Ambassador to Mexico
With Labor Day behind us, more moderate weather temperatures are surely just around the corner.
The same cannot be said for U.S. relations with China and Russia, as both diplomatic and geopolitical concerns continue to simmer.
Beijing hosted US Commerce Secretary Gina Raimondo in mid-August following a series of high-level U.S. officials’ visits to China in recent months over ongoing disputes about technology, export controls and security. Xi Jinping did not attend the G20, but Russian President Vladimir Putin is expected to visit Beijing in October. As a result of political lobbying from India’s Narendra Modi, the African Union was made a permanent member of the G20.
Xi is still engaging with the United States, but Beijing is also looking elsewhere for economic and geopolitical opportunities amid concerns about China’s sputtering economic growth. In August, BRICS announced the invitation of Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates (UAE) to join the bloc. This is intended to expand the bloc’s influence, with President Xi calling the announcement “historic.” This initiative should not be taken lightly given its potential effect on Global South economies and its objective of serving as a counterweight to the West.
The BRICS expansion will also create even more heterogeneity within the bloc with U.S. traditional allies Saudi Arabia and the UAE representing distinct geopolitical interests from other members, including China and Russia. Similar to China, Russia may also be looking at this announcement as a much-needed geopolitical opportunity as the war with Ukraine lingers on. Beyond BRICS, another concern is Putin’s hosting of North Korean leader Kim Jong-un last week for weapons talks.
And amid all these geopolitical announcements, political changes are also coming in Mexico. With less than a year until Mexico’s presidential elections, we do not yet know who the president will be, but we do know that Mexico will likely elect its first woman president.
Senator Xochitl Gálvez, a businesswoman from the state of Hidalgo, gained popularity in recent weeks and has officially been selected to represent the opposition coalition of the conservative National Action Party (PAN), centralist Institutional Revolutionary Party (PRI) and the left-leaning Party of the Democratic Revolution (PRD).
Even with official candidate announcements behind us, unknowns still exist. Having lost his bid as the Morena candidate, former Foreign Relations (SRE) Secretary Marcelo Ebrard questioned the Morena polling process. Ebrard still enjoys a fair amount of support in the country, which could lead him to consider running as an independent, or as a candidate of a third party or movement. Additionally, Movimiento Ciudadano has not named a candidate, and whether and when they do will be important to monitor. As it stands now, polls currently show Morena ahead by a wide, but not insurmountable, margin.
As the candidates for the presidency come into focus, Mexico’s economic outlook through 2023 is encouraging. Mexico’s GDP grew by 0.9 percent in the second quarter, beating market expectations. On Aug. 30, Mexico’s central bank, Banxico, raised the growth forecast from 2.3 percent to 3.0 percent for 2023, though the bank opted not to cut interest rates.
Looking to 2024 and the upcoming presidential election, the strength of the peso, expectations for increasing nearshoring and the current economic forecast are all potential signs of a less risk averse economy than during the 2018 elections.
On trade, many of the prolonged disputes regarding the United States-Mexico-Canada Agreement (USMCA) continue. On Aug. 25, Canada announced that it would participate as a third party in the dispute settlement panel between the United States and Mexico on genetically modified corn. Mexico’s Economy Secretariat requested a review of antidumping quotas on steel exports to the United States. Finally, the United States requested a Rapid Response Labor Mechanism (RRLM) panel regarding a labor dispute of a mine in Zacatecas. And on the energy front the United States recently moved to escalate their concerns.
The ebb and flow of migration also continues unabated. In August, U.S. Border Patrol reported the apprehension of roughly 177,000 individuals. Border Patrol also reported the apprehension of a record number of families, rather than single adults, crossing the southern border. These dynamics suggest that the initial drop in migration post-Title 42 may be cooling off. In response, the United States is increasingly opting for expedited removals and detention processes for those crossing between ports of entry.
On Sept. 6, a judge ordered that Texas must remove the controversial floating barrier that the state had placed in the Rio Grande to thwart migration. This decision came two weeks after Governor Greg Abbott reportedly moved the barriers closer into Texas territory following a government survey which found that 80 percent of the buoys were in Mexican territory.
Mexican President Andrés Manuel López Obrador recently made controversial statements that the government considered the number of more than 100,000 disappeared persons in Mexico since 2006 as an overcount. The president’s statements and subsequent announcement of recounting policies led the head of Mexico’s National Search Committee, Karla Quintana, to abruptly resign. Several hundred mothers protested in Mexico City on Aug. 31, the International Day of the Disappeared.