LLORENTE & CUENCA 21 Oct 2016 // 6:57PM GMT
The United States’ elections seem to be chaotic, with highs and blows that no one would have expected a year ago and Mexico has no option but to follow this process closely.
Economically speaking, Mexico is not only the United States’ most important market, but the U.S.’s second largest international buyer when it comes to goods. The integration of both countries’ manufacturing sectors has provided the greatest impulse to the integration of intra-industrial commerce. Many key sectors in both countries are shared, these ranging from machinery, automotive, and electrical machines to mineral fuels.
Socially and culturally speaking, about 63 % of the U.S’s Latino population is Mexican and 876, 628 U.S. citizens live in Mexico, with Mexico positioning itself as the tenth country with most students in the U.S.
Politically speaking, the United States is Mexico’s main ally in terms of security, rule of law, and formality. Internationally speaking, Mexico has a large diplomatic deployment in the U.S., along with various legislative groups, summits and a large bilateral bureaucratic comprehension.
A large part of any bilateral relation’s success is a good understanding amongst the mechanism that represents the interests in each country and the way they are communicated.
Hillary and Trump
Although Donald Trump’s temperament and statements have made him a very controversial candidate, it is important to closely analyze Hillary Clinton as well. Three issues should be observed in detail in both candidates’ agenda: Trade, migration, and the bilateral comprehension in regards to cooperation mechanisms.
On Hillary Clinton’s side, her position on foreign trade is uncertain. Her decision-making record to ratify free trade agreements with other nations is mixed, and her position towards the North American Free Trade Agreement (NAFTA) has been ambiguous and has even spoken little about the few advantages that the U.S. has had in regards to Mexico. If the scenario of renegotiation were to present itself, Mexico could face a significant fall in regards to the country’s intermediate goods production and its exported amounts. In addition, the U.S. could face a toughening of fiscal measurements from Mexico which could affect both countries’ unemployment rates.
In regards to migration, although Clinton’s record is mixed, her stance is a bit more flexible than President Obama's, seeing that she is willing to authorize a temporary work visa plan and an office of migratory affairs, each more humane when it comes to migration cases that involve unaccompanied minors.
With Donald Trump as president, it is possible that Mexico faces a very difficult period in regards to trade and migration. The candidate’s discourse clearly reflects an anti-globalization and anti-trade rhetoric.
However, it is important to mention that not all related to bilateral cooperation and trade depends entirely on the possible winner, seeing as Congress has a large weight when it comes to decision making.
What can be almost assured is that in the case that the U.S. Congress and the Executive branch were from distinct parties, we could expect a certain paralysis in regards to decision-making.
The Mexican government’s challenge will be to demonstrate keen and sharp diplomatic skills when faced with understanding whichever bureaucratic framework is set in place in order to create a dialogue with the U.S. not as a neighbor, but as a partner, and do whatever possible nationally in order to minimize the possible political and economic affects that could occur.
There is no other option than to wait for the election’s results as of this November 8th.
By: Juan Rivera, Partner and Managing Director at LLORENTE & CUENCA Mexico
Mariana Campero, Senior Director at LLORENTE & CUENCA Mexico