Mexico Has a New President-Elect, Where Does that Leave NAFTA?
After two previous unsuccessful bids, the third time was the charm for Mexico President-Elect Andres Manuel Lopez Obrador.
Lopez Obrador, 64, the leader of the country’s leftist Morena party, won the popular vote in a landslide Sunday, more than doubling the second-place finisher’s total.
He is expected to bring about a paradigm shift in Mexico, with his party expected to win majorities in both chambers of Congress. Lopez Obrador, former mayor of Mexico City (2000-2005) is known as a champion of the poor, though critics describe him as a Mexican Hugo Chavez and even a Mexican Donald Trump because of his more nationalist and populist agenda.
Lopez Obrador’s victory saw the Mexican peso and the country’s main stock index take about a one percent dip, which analysts attribute to the peso’s drop against the U.S. dollar and a more broad global movement in favor of the dollar.
The peso traded at 20.11 per dollar Monday morning, when Lopez Obrador said he supports reaching a deal to renegotiate the North American Free Trade Agreement with the U.S. and Canada.
Recent talks have stalled over the Trump administration’s demands for higher U.S. content and a sunset clause in the 1994 trade agreement.
President Donald Trump took to Twitter on Sunday to congratulate the new Mexican president-elect.
“Congratulations to Andres Manuel Lopez Obrador on becoming the next President of Mexico. I look very much forward to working with him. There is much to be done that will benefit both the United States and Mexico!” Trump tweeted Sunday evening.
Congratulations to Andres Manuel Lopez Obrador on becoming the next President of Mexico. I look very much forward to working with him. There is much to be done that will benefit both the United States and Mexico!
— Donald J. Trump (@realDonaldTrump) July 2, 2018
Lopez Obrador thanked Trump on Monday, relaying that he’ll be in touch soon and he hopes to “reach an understanding.”
He said in an interview Monday with the Televisa network that Trump’s tweet the night before “was very respectful,” and he added: “That is what we always want to maintain with the U.S. government, that there be mutual respect.”
“We are never going to disrespect the U.S. government, because we want them to respect us,” Lopez Obrador said. “We are conscious of the need to maintain good relations with the United States.”
On the campaign trail, Lopez Obrador was oftentimes — like Trump — bombastic, referring to the ruling political class as “filthy pigs,” “hogs” and “swine.”
However, he’s considered far less friendly to the business sector so there is some concern and uncertainty among investors, some of which worry that his policies will spur a recession.
So where does all this leave NAFTA?
For the time being, in a holding pattern.
Trump announced Monday that he’d like to postpone further NAFTA negotiations until after November’s mid-term election.
Lopez Obrador doesn’t officially take office until Dec. 1, and he said Monday he will respect the current negotiating teams and process.
Trump and Lopez Obrador also had about a 30-minute phone call Monday afternoon, spurring the U.S. president to predict a positive relationship.
Speaking during a meeting with Dutch Prime Minister Mark Rutte, Trump says he and Lopez Obrador discussed border security and trade.
“We talked about trade, we talked about NAFTA,” Trump said, “we talked about a separate deal, just Mexico and the United States.”
The Associated Press contributed to this report.