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Trump and Mexico’s president have a big agenda on trade and beyond

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Presidents Trump and Andres Manuel Lopez Obrador of Mexico, known as AMLO, will meet July 8 for the first time to welcome the new United States-Mexico-Canada Agreement (USMCA). There is much to celebrate, but much still to be done to assure solid prospects for commerce, security and well-being between the U.S. and Mexico, as well as with Canada.  

Canadian Prime Minister Justin Trudeau’s office confirmed Monday that he won’t join for a trilateral discussion in Washington. Still, there are important U.S.-Mexico issues to pursue.

In the 18 months since AMLO took office,  U.S.-Mexico relations have been in crisis management mode: dealing with Trump’s focus on building a border wall; managing the surge of Central American migrants; and searching for agreement to better address the flows of lethal, illegal drugs northward and of arms and drug-sale profits southward, in addition to the ups and downs of the USMCA negotiations.  

Many were surprised at the success in managing those crises. Today, both presidents have much to gain if they can initiate cooperative ways forward.

AMLO and Trump both have been dropping in public opinion polls. Both are criticized for their handling of COVID-19, with fears about the spread of the virus on both sides of the border.  Both countries face serious economic downturns and negative GDP projections. AMLO has been criticized for not tackling violent homicides and surging drug cartel violence, highlighted by the recent attack on Mexico City’s police chief. Trump does not face a crime surge, but rather serious criticism for his handling of justice issues, weeks of protests about racial issues, and drug overdoses appear to be rising, recalling dangerous opioid trafficking from Mexico.

Some have criticized AMLO for making this U.S. visit, but the two presidents can turn their meeting into more than a photo opportunity by committing to long-term efforts to promote prosperity and to address security, border management and migration, which are essential to productive U.S.-Mexico relations.

USMCA provides at least 16 years of rules and processes upon which businesses, farmers and workers across North America can expand the existing networks that produced $1.3 trillion in trade in 2019. This commerce supports some 12 million U.S. jobs and millions more in Mexico and Canada, which are, respectively, the number one and two trading partners with the United States.

USMCA’s updated rules, norms and procedures will facilitate commerce and resolving disputes that arise amid the $2 million-a-minute trade across America’s borders with Canada and Mexico.  All three governments must focus on how best to implement the rules and work through areas where governments and businesses fall short on USMCA commitments.

The value of USMCA is far beyond its ability to enforce rules and resolve differences, however.  USMCA is a strategic vehicle for opening opportunities. The agreement has specific elements that encourage the three governments to find ways to make their economies more competitive against other global commercial powers. USMCA can enhance collaboration across North America in dealing with the rapid changes sweeping through workplaces via the seemingly constant arrival of new technologies, which are transforming jobs and businesses.  

USMCA, for example, creates a Committee on Competitiveness so that the three governments, hopefully along with non-government “stakeholders,” can identify ways to make the region more efficient, productive and collaborative in dealing with shared problems. There are guidelines for how to deal with internet-based commerce and data flows. There are provisions that require cooperation on labor issues and encourage dialogue on work-based learning. USMCA boosts joint efforts to help small and medium-sized businesses to buy and sell across the continent, urges regulators to work more collaboratively, and much more. USMCA embodies a broad action agenda that encourages cooperation among the three governments, which should go far beyond trade agencies or specific trade provisions.

A focus on building longer term cooperation can help the U.S. and Mexican economies rebound from the COVID-19 downturn.  

Mexico has an opportunity to attract investment with USMCA’s launch as investors consider making supply chains shorter and more resilient following the COVID-19 impacts. However, Mexico needs to establish better mechanisms for coordinating with the U.S. on supply chain management, especially in emergencies. During COVID-19 shutdowns, the two governments did not coordinate well about how to keep essential supply chains open, sending negative signals to key sectors in both countries.  

Mexico also needs an environment attracting investors that builds on its location next to the US.  However, AMLO’s government has taken steps that alarm U.S. and other international investors, sparking companies, business associations and regulators to raise concerns publicly, including appeals to Trump, and to seek recourse in Mexico’s courts.  In addition, the U.S. Trade Representative says he will be attentive to Mexico’s obligations under USMCA, and many expect early challenges to Mexico regarding its labor rights commitments, leading some to warn that Mexico faces USMCA storms ahead. AMLO thus also could gain by using his Washington visit to connect with key actors in Congress and elsewhere. 

AMLO and Trump hopefully will use their meeting to instruct their teams to develop a positive forward-looking economic agenda with the aim of resolving potential problems before they become formal disputes. The presidents could charge officials with devising initiatives to facilitate economic opportunities and job creation, for example, focused on border states and infrastructure to facilitate trade. The GDP of the U.S.-Mexico border states together would amount to the third-largest economy in the world.

To support economic initiatives, the two presidents should instruct officials to devise a more effective mechanism for reducing multibillion-dollar cross border crime involving drugs, illicit money, guns and irregular migration. Bilateral cooperation has been in low gear, and many thousands of Americans and Mexicans are paying dearly for the shortfall in effective anti-crime cooperation.  

A longer term, coordinated U.S.-Mexico strategy to address cross-border crime and the challenges of migration through a combination of enforcement and addressing root causes is in the interest of both countries. A broad, future-oriented agenda will support the economic potential for mutual prosperity inherent in USMCA.

Former ambassador Earl Anthony Wayne is a diplomat-in-residence at American University’s School of International Service and advisory board co-chair for the Wilson Center’s Mexico Institute. He was a U.S. diplomat for 40 years. Follow him on Twitter @EAnthonyWayne.

Tags Andrés Manuel López Obrador Donald Trump Justin Trudeau Mexico–United States relations Trade bloc United States–Mexico–Canada Agreement

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