Has Trump Opened the Door to the Mexican Left?

Has Trump Opened the Door to the Mexican Left?

Has Trump Opened the Door to the Mexican Left?

Resistance to his bigotry and deportations is converging with growing opposition to NAFTA and neoliberalism.


Coyotepec, MexicoWhen it came to defending Mexico against the latest outrages of the US president, few harbored doubts in the town square in Coyotepec, a small industrial city 80 miles north of Mexico City. Andrés Manuel López Obrador, the indefatigable veteran of the Mexican left, taking the stage there recently as a brass band blasted a corrido across the plaza, would do a far better job than current head of state Enrique Peña Nieto.

“He’ll deal with TROMP,” said a churrero, who had already dispensed most of his sugared doughnuts, employing the sardonic Mexican intonation of the US president’s surname. AMLO, as López Obrador is known, “is a fighter; he never gives in,” said Marta Fuentes, who had taken time off to attend the meeting from a part-time job in a beauty parlor while her husband worked the day shift at a plastics plant on the outskirts of town for 840 pesos ($40) a week. “Peña Nieto lacks character; Trump has crushed him,” chimed in Martín Torres, another probable AMLO voter who was selling roasted corncobs powdered with chili.

López Obrador—leader of the left-wing MORENA party, which he formed in 2014 after being denied victory twice in presidential elections in which electoral fraud was more than a figment of his imagination—not only looks the part to take on Trump in the fight for national pride against a Mexican president more at home in Davos than Coyotepec. There are matters of survival at stake here, a town where one in two residents lives below the poverty line, and those not in precarious informal employment slave in foreign-owned factories for $6-8 a day.

Top on the list of complaints is an explosive inflation rate, triggered by the government’s decision to remove gasoline subsidies just when international oil prices are beginning to rise in the wake of Trump victory. “Everything is going up: mayonnaise, cheese, the cobs,” said the corn seller. “Cooking oil’s up,” chimed in the churrero. The collapse of the peso after Trump’s rise has also contributed to soaring prices of imported foodstuffs such as corn, wheat, and cheese. “I’m paying 60 percent more to feed my family than two months ago; prices rise, but what about wages?” said Marta Fuentes, holding her 4-year-old daughter aloft to see the candidate.

The gasolinazos have sparked protests and riots throughout Mexico, and MORENA—the only party in the Mexican parliament to oppose the removal of subsidies—seems well placed to channel the anger. Acclaimed by the now definitively shattered “Washington Consensus,” Peña Nieto’s energy reform centered on the breakup of state oil company Pemex’s monopoly, welcoming multinationals into exploration in the Gulf of Mexico as well as in distribution, where they would buy up Pemex’s gas stations. Chevron is already partnering with Pemex in the Gulf.

Therein lies the logic of the gasolinazo, says López Obrador. “Without higher gas prices, no one will buy the gas stations and the privatization will be in trouble,” he said to a round of applause and another burst from the brass band. Peña Nieto has been forced to ratchet down the pace of liberalization due to the protests, but the government is still committed to reaching market prices by December. This creates more potential support for AMLO, who has pledged to maintain Pemex’s state monopoly, boost public investment in the oil industry, and build more refineries to reduce reliance on the United States. As Jorge, a taxi driver standing at the fringes of the Coyotepec meeting, stated with a pundit’s sense of drama, “One more gasolinazo and we’ll have a popular rebellion here. The people can’t take it anymore, and if that happens, López Obrador wins for sure.”

On the centenary of the 1917 Mexican constitution, López Obrador hopes to be the president who ends 36 years of what he calls neoliberal-neoporfirismo. The phrase alludes to the cozy relations between a corrupt government and US and European multinationals that he says recalls the era of dictator Porfirio Díaz in the years before the revolution. “Just as in the Porfiriato, our governors have transferred public assets and companies to private interests both national and international,” he writes in his bestselling book 2018: La Salida (2018: The Way Out) which sold 30,000 copies just three weeks after its launch in January. “Corruption is now the main function of the state,” AMLO says in a chapter titled “Privatize Is to Steal,” a perfect debunking of the neoliberal bluff first tried out on the Mexican people by presidents Miguel de la Madrid (1982-88) and Carlos Salinas de Gortari (1988-94), signatory of NAFTA along with Bill Clinton, a trade agreement that has been unquestioned in the presidential palace since then. Far from cleansing Mexico’s clientelist state, removing obstacles to the multinationals has fed the beast.

AMLO singles out Spanish multinationals, from oil company Repsol to public contractors Dragados and OHL, accusing them all of being involved in dodgy deals thanks to their inside relations with former president Felipe Calderón and with Peña Nieto. In his book, AMLO says that OHL, “the favorite of Peña Nieto,” won the tender for the Mexico-Puebla highway, which guarantees toll revenue for 25 years yet has “charged almost the entire cost [to Mexico’s] public budget.” He also cites Germany’s Siemens, Korea’s Sunkyoung (SK Group), Citigroup, and Gulf Oil as beneficiaries in the neoliberal Porfiriato.

All this, within the strictly legal framework of NAFTA and a media discourse that has held Mexico up as the ideal multinational platform, where foreign direct investment would boost wages and productivity south of the border. In fact, wages have stagnated, and in some areas of the economy they are lower than China’s. Even in the much-hyped auto plants, maximum daily wages are only 400 pesos ($20). In his book, AMLO promises to reverse the privatizations of energy and public services and adds that next year’s election will serve as a plebiscite. “Today we must remove the corrupt government just as Porfirio Díaz was deposed, not through violence but a revolution of conscience,” he writes. While other parties have yet to name candidates for the elections, AMLO is now leading the polls against potential rivals among most groups of working-class voters, including evangelicals; his lead has widened to five points since the US presidential election.

Like the menacing presence of Theodore Roosevelt in the years of the Porfiriato, Trump may prove a vehicle that López Obrador can ride to revolution. After three failed attempts at the presidency and mass mobilizations to protest widely alleged election rigging, AMLO is a master at dominating the news cycle. Just back from a trip to Los Angeles, he pledged in a conversation after meeting in Coyotepec to defend Mexicans threatened by the Trump deportations. “If the government doesn’t act, we’ll denounce Trump at the United Nations for racism and violation of human rights,” he declared. While his March visit to New York was cut short due to a snowstorm, he delivered a letter to this effect to the UN commissioner and threatened legal action against Trump during a talk at the Church of Our Lady of Guadalupe in Manhattan. This tough message struck a chord in Coyotepec, where thousands have immigrated to the United States. “What we do in Mexico is export cheap labor in the form of manufactured goods assembled here or in the form of immigrants,” said Julian Calderón, a photographer who lives in the border town of Ciudad Juárez, where workers at maquiladora plants earn an average of $4 a day.

Peña Nieto, so identified with the neoliberal model of globalization that he was named “Young Global Leader” by the business elite of the World Economic Forum in Davos even before announcing his presidential bid, is poorly placed to surf the wave of nationalist indignation. Not that he hasn’t tried—last month his Institutional Revolutionary Party (PRI), which monopolized power and the Mexican flag for 70 years, created the campaign “Vibra Mexico” to hold anti-Trump protests. But few support the initiative. “Peña Nieto wrapped in the national flag is hardly credible,” says John Mill Ackerman, law professor at the National Autonomous University of Mexico. Peña Nieto’s decision last year to invite Trump—in the midst of the US election campaign—to a humiliating press conference in Mexico City still has eyeballs rolling in this nation’s capital.

At other times, López Obrador’s portrayal of IMF-approved privatization as a return to the policies of a 19th-century dictator might have seemed excessive. But as history speeds up north of the border, Mexico is in the jet stream. NAFTA-driven integration with the giant to the north—preached as the only possible development strategy for the past quarter-century—suddenly seems preposterous. “López Obrador wants to base growth on domestic demand with higher wages, do more trade with Latin America, stop fetishizing NAFTA, and defend the dignity of the country,” says MORENA economist and deputy Irma Sandoval. Trump “might open the door,” she adds. AMLO has also pledged to restore Mexican agriculture, based on self-sufficient small farmers and not agribusiness transnationals, by boosting public investment and support for campesinos. Although AMLO does not specifically state this in his book, this would inevitably require rewriting NAFTA’s blank check for massive corn and wheat exports from US agribusiness.

Confronting the status quo on free-market globalization may upset those US Democrats who combine their protests at Trump’s anti-Mexican xenophobia with a passionate defense of NAFTA. Yet, for Mexico’s tens of millions of impoverished—at least half the population—opposing Trump does not mean supporting the trade agreement. It certainly did not to those present at the Coyotepec rally. Maybe they have read the data. According to the World Bank, the median income of the average Mexican family has increased by only 1.9 percent since 1994, compared to 2 percent in the United States. That is, the North-South gap has widened, not narrowed as the NAFTA-applauding textbooks insisted it would. Gerardo Esquivel, an economist at the National Autonomous University, estimates that Mexico’s minimum wage of 800 pesos a week buys a quarter of what it bought in 1976. No wonder Mexico has become a junkie hooked on external US demand.

Other economists in Mexico City also wonder whether Trump might be less a catastrophe than an opportunity to change a failed development model by reducing dependence on the United States and building a more robust internal market. “Our model was already collapsing; most of the stuff we export is made up of imported components, even in the car industry; it’s a maquiladora economy,” said José Luis de la Cruz Gallegos, an economist at the Institute of Industrial Development and Economic Growth (IDIC) in Mexico City. De la Cruz notes that, despite the eulogies to Mexico’s open economy and the success of its exports, a large external deficit is emerging on the current account, the worst since the tequila crisis which spoiled Salinas and Clinton’s NAFTA signing party in 1994 as foreign capital fled the country, forcing a negotiated default on Mexican debt. Mexico’s dual dependence on the US market and on imports to assemble its exports is destabilizing and has reduced scope for macroeconomic policy needed to boost growth, says another dissident economist, José Romero of Colegio de México.

The only way to fill the financing gap so far has been via the more than $20 billion per year of remittances sent by uprooted Mexicans resident in the United States to supplement the paltry income of their families and friends back home. By committing to tax both the exports and the remittances, Trump threatens the very essence of Mexico’s strategy. “Trump will speed up the collapse and we’ll have to find an alternative,” says De la Cruz. These economists, while not overtly supporters of the López Obrador campaign, have been sketching out plans for a new economic program, with greater independence form the United States and a bigger role for the state in industrial policy and local content requirements that could force multinationals manufacturing in Mexico to use Mexican-made capital goods. Is it possible to break with NAFTA and chart an alternative route to full-blown integration with the United States? “Yes, it’s possible; we did it under Lázaro Cárdenas and Benito Juárez,” says Irma Sandoval.

There is an irony here, which few in the mainstream media will notice. The alternative policies now emerging in Mexico, for so long the star pupil of Washington, echo the so-called “pink tide” that swept across South America for two decades before hitting a rough patch in the past few years. Brazil, for example, under left-oriented presidents Luiz Inácio Lula da Silva and Dilma Rousseff, based its economic development strategy on building an internal market with minimum-wage hikes and incentives to local investment through local content rules and an aggressive state-driven industrial strategy that favored Brazilian companies, especially in the oil sector. Brazil, Venezuela, Ecuador, Bolivia, Paraguay, and Uruguay all shunned greater integration with the United States in favor of regional projects like Mercosur and Unasur. Many protected their economies in defiance of the advice of Washington institutions. All achieved better results than Mexico in per capita GDP and wage growth.

At an IMF meeting in Lima in 2015, however, these polices were pilloried as the cause of the Brazilian recession. Peña Nieto’s policies in Mexico, meanwhile, were eulogized. The Workers’ Party was subsequently removed from power in Brasília, and an IMF-approved austerity plan was implemented with widespread privatization, including of oil company Petrobras. Now, with Trump in the White House, Mexico’s pursuit of total integration with the United States and total acceptance of the IMF is severely challenged. Could López Obrador soon become the standard-bearer of the next wave of the pink tide? Margarita Zavala, likely candidate for the right-wing National Action Party (PAN) in next year’s elections, described such a scenario in Washington last week. Zavala (the wife of former president Felipe Calderón) warned US political elites at the Atlantic Council that Trump’s anti-Mexican stance risked unleashing a candidate comparable to Venezuela’s Hugo Chávez. The idea horrified the attendees. But in Coyotepec, people are searching for a salida.

Editor’s note: The text has been corrected to note that remittances sent home by Mexicans working in the United States average more than $20 billion a year, not more than $200 billion.

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