Mexico’s president Andres Manuel Lopez Obrador, popularly referred to as AMLO, is a quixotic figure, enthralled with the leftist ideals of the past and nostalgic for state-led economic growth. But, at the same time, unlike most of the traditional left, he is both socially and fiscally conservative. This leads him to assume seemingly contradictory positions. At heart a populist with a genuine preoccupation with the concerns of the poor, he dislikes debt and is a fiscal hawk ; and though he relishes fiery anti-American rhetoric, as president he has pursued pragmatic and cordial relations with the U.S. and even embraced the shameless Mexico basher Donald Trump “as a friend of Mexico who respects our sovereignty.”
AMLO’s contradictions were in full view in an important speech he delivered July 24 at the Castillo Chapultepec to commemorate the birthday of Simon Bolivar, the “libertador” of South America. Surrounded by diplomats and intellectuals from across Latin America, AMLO provided a whirlwind overview of Latin American history and centuries of oppression at the hands of Spain and the United States. The nefarious rule of the hegemon continues to this day and only glorious Cuba has successfully defied it, AMLO declared.
AMLO repeated the standard claim of the Latin American political left that all of the region’s problems have been caused by the United States. According to AMLO, it all started when Thomas Jefferson convinced President James Monroe that “the Americas are for the Americans” which led to the “disintegration of the peoples of our continent and destroying what was built by Bolivar.” Using military force and conducting overt and covert operations against independent countries, the U.S. has imposed its will in the region. Only the people of Cuba have resisted and they “deserve the prize of dignity, and that island should be considered as the new Numantia for its example of resistance, and I think that for the same reason should be declared a world heritage site.”
So far, so good; all this was standard leftist rhetoric pleasing to the ears of most Latin American politicians and intellectuals. This would have been a good time to finish the speech with warm applauses from the audience. But AMLO can be full of surprises. After the traditional bashing of the U.S. and the adulation for Cuba, AMLO suddenly pivoted from confrontation to conciliation.
Actually, AMLO claimed, we now live in a new world where the past is not relevant.
Times have changed, AMLO said. The policies of the past benefit no one. “Unbeatable conditions” currently exist for a new relationship based on respect and common purpose. According to AMLO, the “rise of China has strengthened the opinion in the United States that we should be seen as allies and not as distant neighbors.” Nearly 30 years of integration with the United States through NAFTA make the countries “mutually indispensable and well positioned to recover what was lost with respect to production and trade with China, than to continue weakening as a region and to have in the Pacific a scene plagued with warlike tensions; To put it in other words, we want the United States to be strong economically and not just militarily. Achieving this balance and not the hegemony of any country, is the most responsible and most convenient way to maintain peace for the good of future generations and humanity.”
According to AMLO, Mexico’s best way forward is to participate in a vibrant and successful North American economy. “Besides, I don’t see any other way out; We cannot close our economies or bet on the application of tariffs to exporting countries of the world, much less should we declare a trade war on anyone. I think the best thing is to be efficient, creative, strengthen our regional market and compete with any country or region in the world.”
Conclusion
What should we make of AMLO’s remarkable speech?
First, It is obviously a sign that the initial contacts with the Biden Administration have been constructive. Given AMLO’s strange “love affair” with Trump and initial coolness towards Biden, concerns of a falling out were real but it now appears that they were unfounded. AMLO’s positioning towards the United States is grounded in a pragmatic understanding of interdependence.
Second, in this speech AMLO expresses a sound understanding of Mexico’s strategic opportunities in the context of the decoupling of the Chinese and American economies. This should provide some comfort to investors on both sides of the border.
Constructive relations between the U.S. and Mexico and a understanding that the two countries have a common purpose is certainly good news. Nevertheless, there remain many contentious issues to resolve.
From the American point of view, AMLO’s view on state domination of key sectors is not compatible with the updated USCMA trade agreement. Recent violation of contracts with American companies in the energy sector are not acceptable to the U.S.
Nevertheless, the conciliatory and optimistic tone of the speech is important. There are few countries in emerging markets today that have brighter prospects for their stock market than Mexico which has low valuations, an undervalued currency and strong fiscal position. Mexico could potentially attract huge investments for the reshoring of U.S. manufacturing supply chains which could boost GDP growth from the current low levels. Until today, AMLO’s hardline anti-business stance has been the major impediment to investing in Mexico. A more pragmatic , conciliatory and forward thinking AMLO could possibly be a catalyst for better days ahead.
V Interesting, excellent reading thank you