By Julio Espinoza, Staff Writer
President-elect Trump is taking office on January 20th. Are we fully aware of the negative impact of his inflammatory rhetoric on the international stature of the U.S. and the system of alliances our country has built with other liberal democracies? He has underestimated the most recent intelligence reports on the Russian intervention in American affairs. He has set a dangerous precedent of ignoring the one-China policy principle by speaking to Taiwanese President Tsai Ing-Wen. His cabinet expertise in national security and foreign policy is very questionable. When President-elect Trump ignores the intelligence community and the Department of State and conducts foreign and national security policies on Twitter, will he be able to fully understand the strategic value and potential hostile set of countermeasures that foreign powers could implement to deter and undermine the U.S.? His campaign was based on making America great again, but he might actually make America weaker and more isolated by ending the latest wave of globalization, which has been the glue for peace and stability between the major powers of the world post-Cold War.
This is a hypothetical worst-case scenario forecast of Mexican realpolitik countermeasures to a potentially aggressive Trump administration based on the analysis of recent developments in Mexico City. The forecast is unbiased and does not represent my opinion. My scenarios do not portray a moderate diplomatic approach of fostering dialogue and cooperation, which is the best-case scenario for both countries and the one many of us, as globally minded leaders, are committed to making happen. This forecast represents a warning, a worst-case scenario, that we need to prevent from happening. In coming articles, I will elaborate on conflict resolution (de-escalation) for the Mexico-U.S. relationship.
For many Americans, Mexico is still a tropical paradise and underdeveloped country, but not for the growing and increasingly powerful Mexican middle class. The Mexican middle class is growing in economic and political influence and is made up of about fifty percent of the Mexican population. Although in recent decades the country image of the U.S. has improved within the Mexican elites, mostly after the entry into the force of NAFTA, the historical lack of trust is coming back. The Mexican elite in politics, business, academia and entertainment are upset about the potential Trump Administration foreign policy for three reasons: A) As a candidate Trump campaigned using Mexico as a scapegoat for the lack of opportunities for disenfranchised Americans. B) Although highly cosmopolitan, Mexico is still a very nationalistic country, where anti-American feelings are part of the national identity. C) Mexico and the U.S. have learned to coexist under the assumption of asymmetrical power, but Mexico along with the BRIC is rising and the U.S. is declining and withdrawing from major geopolitical theaters of operation, such as the Middle East and Eastern Europe.
Mexico is no longer the weak and isolated country of the mid-nineteenth century that lost the Mexican-American war of 1846-1848, which was a U.S. violation of international law and a bloody fight over the now U.S. Southwest territories. The war has always been fresh in the memory of the Mexican elite and people, as much as Pearl Harbor and 9/11 are in the minds of Americans. A strong sense of nationalism and anti-Americanism have been the dormant pillars of the modern Mexican nation-state and the danger of seeing the incumbent unpopular Peña administration and the 2018 presidential candidates preaching an anti-American discourse to the middle class is a latent danger, especially if the Mexican economy slows down and the peso value drops. If Americans voted for making America great again, Mexicans could also join the international surge of nationalism and demand the next president of Mexico to make Mexico great again. The Mexican center-left, not the far left, has already suggested that the Senate withdraw from the Treaty of Peace, Friendship, Limits and Settlement between the United States of America and the Mexican Republic of 1848, which ended the war, and suggested to withdraw from other cross-border mechanisms of cooperation.
Scenario 1: President Trump decides to build a wall and pass the bill to Mexico by seizing remittances. The incumbent president Peña of Mexico, as well as the Mexican political elite, have been clear that Mexico will not pay for any U.S. border security initiative. Mexican remittances from the U.S. are about $25 billion per year and represent for Mexico the main source of revenue from abroad, even surpassing the oil revenue. If the Trump administration attempts to stop the flow of remittances, the Mexican government could retaliate by seizing the assets of American companies and nationals that operate and live in Mexico, and Mexican consumers could boycott American products and stop any travel to the U.S. for tourism and shopping purposes. Mexico already expropriated major U.S. and European oil companies in the early twentieth century when the U.S. was on the brink of World War II. Mexican consumers have already boycotted American companies when Arizona SB1017 entered into force. The loss of Mexican consumers would be significant for bordering states. For example, Mexican visitors to Arizona spend $7.3 million per day on average, and 5 million U.S. jobs depend on trade with Mexico. With escalating tensions between the U.S., Russia and China, a highly divided political elite in Washington D.C., and a growing income disparity in U.S. households, Mexico will have a position of strength to implement counter-measures, such as nationalizing any American assets in Mexican territory and downsizing the American diplomatic-consular network in Mexico by expelling U.S. diplomats. The U.S. embassy in Mexico City is one of the largest diplomatic posts of Washington D.C. in the world because of the symbiotic bilateral relationship. Now factor the reaction on U.S. soil of millions of American citizens of Mexican descent that still consider the Mexican civilization as part of their identity; many of them are a rising minority in bordering states like California, Texas and Arizona and have protested, claiming to “make America Mexico again.”
Scenario 2: President Trump deports 11 million Mexican nationals living in the U.S. without immigration status and repeals the Deferred Action for Childhood Arrivals. Mexico already has the world’s strongest consular network in the U.S. and is implementing protective measures to help Mexican nationals in need. The Mexican Ministry of Foreign Affairs, along with the Mexican Ministry of Internal Affairs, in the event of a massive deportation, will take back Mexican nationals at the border only if the U.S. authorities can legally prove the identity and nationality of the alleged Mexican nationals. In the meantime, all the logistic expenses of deportations will be paid by the U.S. taxpayers. Moreover, Mexico might implement a civil rights watch campaign and lawyer up at U.S. and international courts to make sure all the Mexican nationals being deported are treated observing international human rights law and are able to keep and transfer their assets. The worst-case scenario would be if Mexico City retaliates by deporting about one million U.S. nationals who live in Mexico and impounding their assets as a proportional response along with imposing new immigration and taxation requirements to all U.S. nationals attempting to enter Mexico.
Scenario 3: President Trump renegotiates or leaves NAFTA. Mexico-U.S. trade stands for one million dollars every second and withdrawing or renegotiating NAFTA would backfire on both countries, mostly by slowing down the economies of California and Texas. However, Mexico is a highly diversified emerging economy with comprehensive FTA’s with more than 40 countries, including the major economies of the world. The Mexican elites have been implementing a slow diversification of their economic foreign policy. If cornered, Mexico City would not hesitate to renegotiate NAFTA, asking for free movement of labor in exchange for any American demands. If the U.S. withdraws from NAFTA, Mexico could foster a more cooperative relationship with China, the second largest economy, in addition to the ratification of the Trans-Pacific Partnership, the imposition of high tariffs and sanctions on American exports and the halt and repatriation of Mexican FDI in the U.S. in retaliation to a Trump administration’s trade war. Mexico City could also impose a high tax on American citizens that are looking for medical tourism and permanent residency in Mexico. This new tax could hurt the living conditions of thousands of Americans that already reside in Mexico, for healthcare and assisting living purposes, and the ones that will be looking for affordable healthcare in Mexico after the repeal of Obamacare.
Scenario 4: President Trump escalates tensions with Mexico. If Mexico no longer sees any advantage in an American-led world order, Mexico City will start promoting a new world order just as they did during the Cold War, but this time with more leverage being the 12th largest economy and with a better network of geopolitical alliances. It is true that the U.S. is a key element that Mexico factors in their decision-making process, but Mexico City would be able to bandwagon with rising anti-systemic powers for furthering South-South cooperation and counterbalancing Washington D.C. in all the dimensions of the global chessboard by increasing military, intelligence, political and economic cooperation with other BRICs and downsizing cooperation with Washington D.C. Mexico might also consider sending a message of strength by increasing military and intelligence cooperation with China and Russia (joint exercises, technology exchange, joint military facilities), withdrawing from the Mexico-U.S. peace treaty, voiding the Mexico-U.S. International Boundary and Water Commission and joint intelligence gathering mechanisms, repealing paragraph X of article 89 of the Mexican constitution (foundation for their pacifist foreign policy), leaving the nuclear non-proliferation treaty of 1968, increasing their military budget and militarizing the Mexico-U.S border. Mexico might not be a military superpower, but when their national interest has been in danger, Mexico City has always gone to war even against the major powers of modern history, including several armed conflicts with the U.S.
A decade ago Brazil killed the U.S. economic leadership in the Americas by rejecting the Free Trade Area of the Americas; Brasilia has been filling the void of U.S. leadership in the Americas by fostering the MERCOSUR integration. Currently, the Trans-Pacific Partnership is taking place with or without the United States (the third largest economy, Japan, already ratified it). In about 15 years, China will overpass the U.S. as the largest economy. Mexico is decreasing its dependency on the NAFTA area and will be the sixth largest economy in the coming decades. If forced by the Trump Administration, Mexico, along with other emerging economies, is increasingly in a better position to shift from a pro-status-quo foreign policy to a more anti-systemic stand.
Is President-elect Trump fully aware of the rising geopolitical power of Mexico and the rest of the emerging economies and the decreasing leadership of the U.S.? Is President-elect Trump aware of the fact that a trade war with Mexico would hurt Americans as well because of the economic interdependence between both countries? Someone pass him a memo that the U.S. is not an island and that we are no longer the indispensable superpower, at least not in the Western Hemisphere. Otherwise, while delivering his campaign promises, President-elect Trump will lead our country to a “huge” geopolitical disaster by eroding the stability, prosperity and alliances that the political elite of Washington D.C. has crafted carefully during the last century. Mexico City might have just sent a signal of dialogue and cooperation by appointing a new Minister of Foreign Affairs with international trade and finance background, the closest man to President Peña, and the one who orchestrated then-candidate Trump’s visit to Mexico City last August.