Mexican President Enrique Peña Nieto and his Danish counterpart, Lars Løkke, stood shoulder to shoulder last week and committed themselves to “defend free trade” at a ceremony held at Los Pinos Palace in Mexico City.
Their staunch justification of the global status quo comes at a moment when Mexico feels threatened by a protectionist U.S. president and Europe is coming to terms with Brexit and a growing wave of nationalism.
During Løkke’s state visit to Mexico, marking 190 years of diplomatic relations between the two countries, Peña Nieto stressed how Mexico was a “safe place to do businesses” for Europeans – confirming the growing belief among senior administration officials that greater emphasis must be put on global trade, rather than the traditional dependence on its big brother to the north.
Although there appears to be little enthusiasm among Trump’s cabinet and the Republican Party as a whole to make major changes to the North American Free Trade Agreement (NAFTA), the unpredictable nature of the current U.S. president and his closest advisors means Mexico cannot afford to take any risks and must therefore broaden its horizons, most analysts here concur.
Mexico has indicated to the Trump team that it is willing to renegotiate NAFTA but has stated firmly that it will reject any move to place restrictions on free access for Mexican products to the United States or Canada, and will oppose the application of tariffs or quotas.
Economy Secretary Ildefonso Guajardo has said the country might walk away from NAFTA if the United States decides to play hardball. “If there are no clear benefits, there’s no point staying,” he said recently.
With this in mind, Mexico’s new global positioning has already started to kick in.
Mexico and the European Union recently announced plans to hold meetings in April and June in what officials called “an accelerated negotiation schedule” for a new trade agreement. The EU is Mexico’s third-largest trading partner after the United States and China. Trade between the EU and Mexico more than doubled between 2005 and 2015 to $US56 billion from $US28 billion.
In the wake of Trump’s victory, Mexico moved quickly to deepen ties with China. Chinese State Councillor Yang Jiechi flew to Mexico in December to meet with senior officials here, stressing that China wished to strengthen its cooperation on trade, investment, resources, infrastructure and financial services.
Mexico’s relationship with China had cooled after a high-speed rail line set to be built by the Chinese was scrapped amid accusations of corruption. But since China’s Offshore Oil Corporation successfully bid for two deepwater oil blocks at the end of 2016, friendly relations seem to be back on track.
Meanwhile, the Mexican Agriculture Ministry has launched a major initiative to boost trade with Russia, focusing on renewing exports of beef and pork. Mexican beef exports to Russia were restricted in 2012 due to fears the meat could contain traces of the feed additive ractopamine. In 2011, Mexican meat exports to Russia were worth US$250 million. Currently on the table is a deal where Mexico will buy Russian grain in return for red meat exports.
Governors of many Mexican states are also trying to court Asian manufacturers amid the uncertainty of NAFTA. San Luis Potosi, abandoned by Ford after Trump’s election victory, has already held talks with Asian automakers in a bid replace the lost jobs, local news reports suggest.