Thursday, March 9, 2017

Buen Comercio, SI! Mexit, NO!

Mexico City--Amazingly (color me facetious), Donald Trump and his anti-Mexico histrionics aren't on everybody's mind, every single minute of the day here.  The 8+ million inhabitants of this city (almost that many more in the greater area) have to contend with all the pressing urban issues that consume city dwellers.  For the most part, the local media devote most of their attention to parochial concerns, with the expected amount of limited op-ed attention paid to matters connected to relations with the U.S.

     Not that there's any love lost between Mexican editorialists and President Trump.  In its analysis of Trump's issues with the complications of repealing Obamacare, Mexican News Daily refers to Trump as "the Tangerine Tornado."  The rest of today's edition has a piece about Mexican avocado growers "not sweating over NAFTA" because they sell $2.2 billion worth of fruit to the USA every year and will continue to do so, NAFTA or no NAFTA.  I shouldn't have been, but was, taken aback by a note in the piece about local environmentalists concerned that rapacious avocado growers are continuing to expand by destroying Monarch butterfly habitat in order to plant more trees. Another reaction in the piece noted that the trade issues with the U.S.A. could be an opportunity in disguise, as Mexicans will be forced to seek out other markets and develop trade ties with a broader array of countries if relations with the U.S. continue to sour.  
     That prospect has already emerged.  A couple of weeks ago a bill requiring Mexico to buy its corn from Brazil and Argentina instead of the United States was discussed in the Mexican senate. Meantime, the Chinese global news giant YIBADA reported last month that while U.S.-Mexican trade tensions are building, China "is taking the opportunity to strengthen ties with Mexico." These are probably incremental, baby-sized steps at this stage of Trump administration's handling of the NAFTA relationship, but they are definitely going in the wrong direction from our local perspective. As I noted here last week, South Dakota's $400 billion a year in sales to Mexico (out of a total of $1.4 billion in exports) should be enough to keep us focused as our trade relationship evolves.  

     My sense is that Mexico--if not exactly defiant--is nevertheless developing its fallback options.  It's a country with considerable comparative advantages, particularly in the way of natural resources and a cheap but increasingly skilled labor force.  A revisit to NAFTA is probably way past due.  A Mexit wouldn't do us much good and could be exceptionally bad for South Dakota. 

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