Andrés Manuel López Obrador (AMLO) won the Mexican presidency this past Sunday July 1 with almost 53 per cent of the vote. What are the implications of his win on the renegotiation of the North American Free Trade Agreement (NAFTA)? The signals following his election win are still difficult to discern.
Reuters now reports, "Lopez Obrador, a onetime NAFTA skeptic who moderated his views in his third run at the presidency, said in a Mexican TV interview on Monday that he wanted a NAFTA deal that was good for Mexico. 'We’re going to accompany the current government in this negotiation, we’re going to be very respectful, and we’re going to support the signing of the agreement'..."
That said, just prior to the election, former Mexican ambassador Jorge Guajardo commented in The Atlantic, "Even though he has spoken favorably about NAFTA, he is not a free-trader by heart. If Trump pulls out of NAFTA, AMLO likely won’t feel obligated to offer concessions in hopes of bringing him back."
Notably in this context, while outgoing Mexican president Enrique Pena Nieto wanted to entrench his market liberalization "energy reforms" in NAFTA, AMLO has been been publicly critical of these reforms.
In January of this year, Reuters reported, "Pena Nieto enacted a wide-ranging reform in 2013-2014 to encourage foreign investment [by ending the Mexican state-owned petroleum company] Pemex’s 75-year monopoly over the energy sector [and opening] oil and gas exploration and production to foreign investors... Though he has moderated his rhetoric about the oil reform somewhat the leftist Lopez Obrador has said he would review the contracts issued by the current government. Industry executives worry that a Lopez Obrador government could at least slow the pace of the energy reform."
That said, Guajardo also noted in his article in The Atlantic, "No one knows if and how AMLO might follow through on his most radical campaign promises, like ending Peña Nieto’s energy reforms... In a Mexican version of 'take him seriously, not literally', his aides insist that he doesn’t really mean any of this."
A first signal may be who AMLO appoints as his energy minister. In April, the New York Times reported, "López Obrador and his top energy adviser, Rocío Nahle, a former legislator who is in line to become energy minister, have also called for a freeze on future deepwater drilling auctions and a review of contracts with international oil companies."
Next steps, timeline?
The Globe and Mail reports, "Foreign Affairs Minister Chrystia Freeland has promised that an 'intensive phase' of talks in the NAFTA renegotiation would start after Sunday’s election in Mexico." The New York Times adds, "[Freeland says] that talks would 'really be moving into high gear' now that the Mexican election was concluded."
Reuters reports, "The victory of Lopez Obrador will jumpstart talks to renegotiate NAFTA, a top adviser to the presidential winner said Monday, stressing that an agreement is possible before the next government takes power in December. Jesus Seade, Lopez Obrador’s chief negotiator for NAFTA, said in an interview that the talks to revamp the 24-year-old pact had been hindered by uncertainty over the outcome of the Mexican election. After Lopez Obrador’s decisive win on Sunday, the negotiations will accelerate, Seade predicted."
And the Canadian Press now reports, "After the election, Lopez Obrador said he'll propose that his own team of experts be included in the trade talks. [He said] he will make that proposal in a meeting Tuesday with Pena Nieto. Lopez Obrador told the Televisa network Monday that he will respect the current team of negotiators, and let them continue representing Mexico until he takes office Dec. 1, noting that he wants to have information on what's being discussed and 'to help as much as we can'."
But The Globe and Mail has also reported, "[On Sunday, US President Donald Trump stated he would] not sign a new North American free-trade agreement ahead of the midterm elections in November." There has been some uncertainty in the media reports on this about whether Trump was referring to the July 1 election in Mexico or the upcoming November 6 midterm elections in the United States.
For Council of Canadians analysis on the NAFTA talks, please click here.