One of three: either President Andrés Manuel López Obrador has a selective mind where he only records what is convenient for him, or he has collaborators who are lying to him, or whoever informs him every morning of what is relevant in the press is dysfunctional. Yesterday he proved it. In an attempt to neutralize criticism of the way he backed away from belligerence to caution with the US government, the president said: “Even the New York Times says: ‘While there is concern about the nationalist government of Mexico, the United States It is considering the economic relationship with Mexico as strategic to consolidate the region in the face of world competition.”
It’s true. This was published by the most influential newspaper in the world, but it reported the nuances. In summing up his briefing, he noted: “US officials are looking for a strategic partner in the south to create a major manufacturing hub that can rival China. But there are still doubts about Mexico’s willingness to host foreign industry.”
He added: “Even as the leaders of the two countries have expressed optimism about their future partnership, an ongoing trade dispute over the Mexican government’s interventions in the energy market continues to cast doubt on the reliability of Mexico as a destination for foreign investment.” .
The Times did not need to have published what the president chose to cunningly demonstrate that the bilateral relationship is walking on cotton wool. The same was pointed out by the Secretary of State, Antony Blinken, and the Secretary of Commerce, Gina Raimondo, during their visit to Mexico on Monday, where they spoke of the investment potential that could exist in Mexico if it agreed to participate in the strategy established in the CHIPS and Science Act, which went into effect on September 9.
President Joe Biden would certainly like to make Mexico a strategic partner to contain China and defeat it in the long run, but President López Obrador is not on the same page. Yesterday morning, he reinforced the doubts and uncertainty of the US government by insisting that the dispute with the United States and Canada over investments in the electricity sector is political, not technical, and falsely assured Mexican audiences that the government of Biden already got it.
What economists pointed out to the Times about how López Obrador’s attitude has prevented investments from the United States and other nations that are leaving China from landing naturally in Mexico, losing billions of dollars that could impact the national economy, is not going to change. The Mexican president does not fully understand that the discussion within the North American free trade agreement does not run along the ideological route, and that the only thing that will cause it is to lose the dispute in eventual panels that arbitrate the conflict, and strengthen the suspicions that He is a consummate violator of the rule of law.
The law signed by Biden included multimillion-dollar investments to create incentives to help produce semiconductors (from its English translation comes the acronym for CHIPS), and for another new law, the Act to Reduce Inflation, which seeks to reduce costs for small companies by keeping health costs lower, supporting investments in clean energy, and strengthening the resilience of supply chains, so affected by the covid-19 pandemic.
Biden sees a strategic partner in Mexico because factories could be installed to produce microconductors, essential for the automotive industry, and link them to production chains. The coronavirus pandemic and this year’s war in Ukraine have caused serious disruption to the US economy.
According to a report from Congress, the impact on import prices increased 13.9% in the first quarter of this year, which pushed inflation to 8% in the same period, and caused a shortage of semiconductors that led to a reduction of 2.3 million cars, which contain an average of 298 semiconductors each, and triggered price inflation for new vehicles by 13% and up to 35% for used ones.
The US productive apparatus suffered, as in the rest of the world, but Biden was quick to take measures within a context of national security, to minimize the damage and costs in future eventualities. Since Mexico is its commercial partner, whose main export industry is the automotive industry, it seemed natural that it incorporate it into its regional strategy. The CHIPS and Science Act, the White House noted in working documents on the law, seeks “smart investments for America to compete and win in the future.”
An intelligent political investment, it is inferred with the calls to President López Obrador, is that he join the strategy. It will be difficult to convince him to do it, because of his fixations and obsessions. His head is not in the promotion of clean energy, and he regularly advocates for fuel oils. He also does not believe that electric cars, where he has come to mock the United States and other nations that in a few years will stop having vehicles powered by hydrocarbons, and he does not like foreign investments because he believes they were the result of corruption.
López Obrador is not in tune with the realities of the world, which leads him to exclude himself, perhaps inadvertently, from long-term strategies. The president has spoken on several occasions of joining a Pan-American trade bloc to confront China. The music is correct, but its lyrics are wrong. There is going to be no US-led Pan-American strategy that focuses on its partners, particularly Mexico. It is not with policies that return the engines of development for almost half a century that it will be added to a long-term plan. His thought is anachronistic even if he doesn’t see it, excluding even if he doesn’t intend it, and harmful for his government in the final stretch, for whoever comes, and for the country.
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