New Mexican President Shares Many NAFTA Goals With Outgoing Politicians

Mexico's President Elect Andres Manuel Lopez Obrador would prefer getting a new NAFTA concluded before he takes office December 1, observers said, but he has most of the same deal-breakers as the current Mexican negotiators. How Lopez Obrador's election will affect NAFTA was one of the focuses of an Atlantic Council panel that met July 12 in Washington. Paula Stern, a former chairwoman of the International Trade Commission, said while the ministers from Mexico and Canada are slated to meet with US Trade Representative Robert Lighthizer in late July, "I do not think there's going to be a lot of movement."

Antonio Ortiz-Mena, a former Mexican official in the NAFTA negotiation office, said a sunset clause is impossible for Mexico, and so is a weak dispute settlement mechanism. The main difference in position between the outgoing administration and AMLO, as he's called in Mexico, is on the question of wages. Lopez Obrador is just as concerned about wage stagnation in Mexico as Democrats who are NAFTA skeptics. Democrats who voted against NAFTA 25 years ago say that a lack of wage convergence means companies cannot resist the lure of far lower wages in Mexico, and so they open factories there instead of the US.

The director of the Atlantic Council's Latin American policy division, Jason Marczak, said the fact that Lopez Obrador is calling for doubling the wages in the border area should appeal to Donald Trump.

In an interview after the panel, Ortiz-Mena said a $16 an hour wage credit in auto rules of origin will still be unacceptable to Mexico. Aside from that proposal, he said, "on all the poison pills, [Canada and Mexico] are on the same page." Canada and Mexico are united against Lighthizer's sunset clause and his proposal to end investor-state dispute settlement, he noted. He believes if the U.S. finished a renewed NAFTA that retained ISDS and had modernized rules of origin for autos, along with stronger labor commitments, it could get through Congress and the Mexican Senate. Lighthizer is the bottleneck, he said.

Ortiz-Mena, now a senior vice president at the Albright Stonebridge Group, said he thinks even though NAFTA is a convenient whipping boy for American unions, he thinks many Democrats will vote for a new NAFTA. "It's easy to trash NAFTA completely," he said, but he said he thinks people are starting to realize that NAFTA is important for American production jobs, too, and said the specter of the end of NAFTA has made more politicians appreciate it.