Mexico faces uncertainty in 2018

We’ll try to make this brief since *cough* we have a date with the holiday punch bowl and we presume most of our assiduous readers are already there.  Once again to our astonishment we find ourselves at the last working day of the year, feeling like we were just here a minute ago in 2016.  But a lot has happened over the past year that is having a big impact on Mexico, North America and the rest of the world, so we’ll just throw out a few thoughts on the topic before we grab the Riunite out of the coffee nook fridge and head out to the house parties.

Things do not seem like they’re going particularly well here in Mexico these days, but to be honest it’s been a pretty tough sled since approximately the Huehuemotecuhzoma administration.  We had a feeling the new government in the United States was going to make for some cranky neighbors and this turned out to be the case.  While the overall tenor of the relationship has deteriorated somewhat due to the language used by the current U.S. president, we do feel that the underlying trade relationship has held up remarkably well under the circumstances.  For those of us who participate in the US$500+ billion annual trade between the two countries, it’s clear that most of the business people involved would like the relationship to continue undisturbed, even if many of those on the U.S. side actually voted for Trump.  The course of the actual negotiations over a modified North American Free Trade Agreement (NAFTA) has been marked by some sharp ups and downs, a lot of frustration on the Mexican and Canadian sides, and mixed signals about whether the USA is really willing to just walk away from the agreement.  Interestingly, some observers recently have raised the prospect that by finally scoring a win with tax reform (and now even claiming that Obamacare has been repealed), the Trump administration may feel that some of the pressure to deliver to their base is off, which could help keep NAFTA alive.  This is sheer speculation of course, but politics being what they are, we’ll take any help we can get.  In any event, we are hoping 2018 brings resolution of the uncertainty about the status of our trade relationship with our North American neighbors, because if NAFTA talks are still up in the air at this time next year, this is just going to be cray (you know, in terms of the cost of uncertainty in a marketplace).

On the political side, here in Mexico the campaigns for our July 2018 presidential election are finally creaking into gear, with the candidates for the top three political parties or coalitions pretty well established.  To our horror here at the Mexico Business Blog global campus, right now the Nosferatu of Mexican presidential elections, Andrés Manuel López Obrador, is leading in the polls by a healthy margin.   López Obrador, known commonly as AMLO or “El Peje,” is something of an odd bird by outside political standards, being a dedicated leftist but not particularly progressive socially.  If NAFTA somehow manages to survive the coming year of negotiations, it’s anyone’s guess what position the Mexican government would adopt if the  anti-American and not particularly trade-friendly AMLO were to come to power in December 2018.  We would be plotzing over the prospect, but we well recall that López Obrador has run for president in the past two elections and has not become president so far, alḥamdulillāh.  And we do know from long years of experience that the currently ruling PRI does not hand over power just based on its deeply held democratic convictions; AMLO would have to win by a significant margin of votes to keep the PRI from jerryrigging the outcome to hold on to the presidency.   The PRI is well aware that its public image is horrendous right now due to the blatant corruption (eye-popping even by local standards, which is a yardstick several yards long) that has marked the current administration, not to mention the wholesale violence that plagues Mexican society.  Knowing that any one of their own would be saddled with the frightful tally from the past five years, the PRI is sending in a ringer, José Antonio Meade, who is not a life-long party member.  It’s a good strategy, and considering the PRI’s well established skills in engineering the outcome of elections, it may be enough to overcome AMLO once more, but the uncertainty and implications of the final result will keep us in suspense for the next six months at least.

Finally, right here at home in the Roma-Condesa district in the heart of Mexico’s capital city, we are still struggling to dig ourselves out of the physical and economic wreckage wrought by the September 19 earthquake.  At the time of the quake, Roma and Condesa were (figuratively speaking) absolutely on fire, with everything foodie, drinky, arty, hipster and trendy being written up in the New York Times, the Guardian, the blogs and what have you every week and fabulous young foreigners and locals pouring in from all sides.  Now, three months later, there are piles of rubble everywhere and the peals of millennial laughter that once rang out across the neighborhood have been replaced by the leaden dink-dink-dink of sledge hammers breaking down the remains of collapsed buildings.  A few French and American stragglers steadfastly continue to walk their golden retrievers down the Amsterdam street median, but the air’s definitely out of the balloon.  The coming year should help us get a better picture of whether the neighborhood will be bouncing back straightaway, or if we’re in for our own cultural and economic ice age for the next few years.

In conclusion, we will have a lot to deal with in 2018.  But there are still a few days left in 2017 to burn though, so for now it’s time to strap on the plush reindeer antlers and hunker down by the punch bowl.  A safe and happy holiday to all, from all the team at Business Development Partners in a dog-eared but ever noble Mexico City, Mexico.

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