There is no denying that September was a polarizing month in Mexico.
It was the long-anticipated (or dreaded, depending on your political affiliation) month in which the Morena party and its allies gained majority control in Congress. As President-elect Claudia Sheinbaum does not take power until Oct. 1, September has also been AMLO’s last month in power, and he used it to push through some of his constitutional reforms in a Morena-controlled legislature.
First up, the judicial reform was quickly passed. Next was a proposal to move the National Guard under military control. Both of these proposals received heavy criticism from the opposition as well as from many international observers and experts. I have had dozens of conversations with people on both of these issues, and it’s easy to understand why there has been so much polarization and high emotion.
At the risk of an oversimplified explanation, those against the judicial reform argued that the proposal to elect all federal judges nationwide would reduce the quality and integrity of the judicial branch. A weakened judicial system, they reasoned, affects the integrity of the rule of law. This, in turn, discourages investor confidence, which ultimately affects the amount of investment and hurts the economy and the country. Strong arguments were made that this would potentially kill the golden goose of the nearshoring opportunity.
Those in favor of the judicial reform reasoned that the current system was already far from perfect, with serious flaws and high levels of corruption. They argued that the direct election of judges would, in fact, give more “power to the people” and reduce the level of corruption.
On the issue of the National Guard, those against the move to put them under military control argue that the military has already gained far too much power under AMLO. The past six years have seen the military building airports, passenger railways, and hotels, as well as beginning to operate the commercial airline Mexicana.
They also argue that the military has been ineffective against the cartels and that putting the National Guard under their control could lead to an increased militarization of what is supposed to be a civilian force.
Those in favor of the move have argued that the National Guard under military control will professionalize the force and prevent the notorious corruption that afflicted the federal police.
Over the past month, the anxiety from the opposition has reached a fever pitch, with fears ranging from “missing the nearshoring opportunity” to “jeopardizing the USMCA agreement” to a “significant devaluation of the peso” to “a judicial system taken over by the cartels.”
If any of these come true, the consequences could be terribly damaging to the country. But in reality, only time will tell if the worst fears are realized. It is with that backdrop in mind that I think we need to step back and reflect on two important points.
First, we are in “crazy talk” time on both sides of the border. In Mexico, September is the month in which AMLO can do what he wants with the Morena mandate, as Sheinbaum awaits, perhaps hoping he doesn’t do anything too polarizing (which clearly didn’t happen).
In the United States, one presidential candidate is talking about “the end of America” if he doesn’t win, while the other candidate talks about “the end of democracy” if she doesn’t win.
Viewed from a Mexican point of view, neither one of these scenarios is reassuring when you hear your big brother to the north talking in such stark terms. But we need to remember that we are in the heat of the election season, the rhetoric is off the charts, and it will likely calm down in a few months.
The temperature is very high on both sides of the border. U.S. political and business leaders have been expressing significant concerns about whether Mexico is still a “business-friendly” country, given AMLO’s recent moves.
That’s a fair point, but imagine being a Mexican political or business leader looking north at a second failed assassination attempt of a presidential candidate in two months, threats of up to 200% tariffs against your products (in clear violation of the USMCA agreement), renewed talk of a border wall and a “round-up and return of illegal immigrants like the world has never seen before.”
I think it’s fair to say that both sides have some reasonable concerns.
As troubling as the above two points might be, it’s important to remember that the U.S.-Mexico relationship is actually stronger than ever by many metrics. Record amounts of U.S. foreign direct investment into Mexico. Record amounts of Mexican exports to the U.S. Record numbers of tourists coming to Mexico by airplane, cruise ship, and car. Record numbers of expats moving to Mexico. Increased cross-border train lines being built. A significant increase in new flights between the two countries. And on, and on, and on…
It’s also important to remember that, as complicated as the U.S.-Mexico relationship might be at this time, the risks and concerns pale in comparison to other parts of the world. Mexico isn’t building up its military and provoking its neighbors. Mexico isn’t conducting cyber-attacks on the U.S., Mexico isn’t using government subsidies to help its industries dump products into the U.S. and disrupt local suppliers.
Claudia Sheinbaum, in an attempt to quell some fears, is soon meeting with a group of business leaders to address concerns and share her vision for the next six years. After her win in June, I wrote my “wish list” of things I think she needs to do to increase investor and international confidence in her administration.
All things considered, and when viewed with a global geopolitical perspective, there is much reason for optimism for both the U.S. and Mexico.
Despite the current rough patch, I am confident that both countries will continue to grow ever closer and reliant on each other. And that, I would argue, is a very good thing for the citizens of both nations and the world.
Travis Bembenek is the CEO of Mexico News Daily and has been living, working or playing in Mexico for over 27 years.
Source: Mexico News Daily
