Twenty years ago, Presidents George H.W. Bush and Brian Mulroney made a risk-filled wager. The agreement they signed was the North American Free Trade Agreement (Nafta), which aimed to transform Mexico into a multi-party democracy with strong institutions and an economy similar to those of the US and Canada.
The gamble paid off. Mexico became the US’s biggest trading partner, with American businesses investing over $200 billion south of the border. The nation implemented reforms that guaranteed free elections, strengthened the judiciary, and created independent regulators. Ernesto Zedillo, who served as president from 1994 to 2000, noted that these changes marked “the long-awaited arrival of a truly democratic presidency.”
However, there has been a significant shift in Mexico’s stance since then. President Andrés Manuel López Obrador and his chosen successor, Claudia Sheinbaum, have distinct views on democracy and the economy that differ from those of their North American counterparts.
According to Jorge Castañeda, who served as foreign minister from 2000 to 2003, López Obrador and Sheinbaum are moving in the opposite direction of the country’s previous aspirations. Those aspirations included becoming a modern, open society with democratic values similar to Western nations.
Sheinbaum believes that Mexico went astray when former President Miguel de la Madrid implemented free-market policies in 1982. These policies, which deregulated and privatized the economy, laid the groundwork for Nafta. In an interview with the Financial Times (FT), Sheinbaum dismissed the period from 1982 to 2018 as “36 years of terrible poverty and inequality.” This is contrary to facts, as Mexico’s economy doubled in size between 1982 and 2018 after adjusting for inflation.
Sheinbaum advocates for a state-driven economy, direct democracy (where judges are elected by voters), heavy welfare spending, and a significant role for the military. When asked about institutional checks and balances, she stated that the people should decide. It is unclear whether Sheinbaum will deviate from her mentor’s policies or maintain them.
Some of López Obrador and Sheinbaum’s foreign allies have sparked concern among their North American counterparts. For instance, Venezuelan President Nicolás Maduro was a guest at a regional summit, while Mexico has provided oil donations and payments for visiting Cuban doctors to support Havana’s communist government.
Washington is being relatively complacent about the changes in Mexico, likely due to its reliance on Mexico for assistance with immigration issues. However, this might not be the case when the next US president takes office. American businesses are upset about the dismantling of Mexico’s independent judiciary and planned elimination of checks and balances. The country’s drug cartels control ever-greater areas of territory, which has caught the attention of the US Congress and investors. The peso has plummeted 14 percent since López Obrador’s election.
Sheinbaum has expressed her desire to continue López Obrador’s policy of enjoying economic benefits without adhering to democratic norms. Zedillo has sounded an alarm, warning that López Obrador and Sheinbaum’s Fourth Transformation could turn Mexico’s democracy into a tyranny.
The US may eventually have to intervene, as it did in Brazil when President Jair Bolsonaro was empowering the military and musing about a coup. It is not too late for Washington to save Mexico’s fragile young democracy, and its inaction will likely come with long-term consequences.
Source: Financial Times