VOXXI: The February 2014 Three Amigos Summit

The February 2014 Three Amigos Summit
W. Alejandro Sanchez
VOXXI
January 20, 2014
Originally published: http://voxxi.com/2014/01/20/february-three-amigos-summit/

On February 19, U.S. President Barack Obama, Mexico’s President Enrique Pena Nieto and Canada’s Prime Minister Stephen Harper will meet in Toluca, Mexico. The meeting has the official title of the “North American Leaders Summit,” but it is more popularly known as the “Three Amigos” summit.

The last time the three leaders met was briefly in 2012 in Washington, and plenty has happened since then. Topics like marijuana legalization, security issues, the NSA scandal, the 20th anniversary of NAFTA and the future of North American trade are some of the topics that could, and should, be discussed at this meeting of amigos.

Possible Topics

Which issues will be addressed will depend on the scheduled length of the summit itself. For the moment, it seems that this gathering, while friendly, will be brief.

During a January 13 press briefing, James Brady, the White House’s Press Secretary, did not confirm whether President Obama will spend the night in Mexico. He simply stated to the press, “What I have here is that he will be traveling to Toluca, Mexico on February 19. We’ll have more details for you later.”

On the other hand, the Canadian leader will arrive on February 17 for a two-day trip. The Canadian newspaper Globe & Mail muses that Harper is “looking to sign a second major trade deal before the next election.” In other words, there seems to be a strong incentive for Harper to leave Mexico with some kind of international agreement to showcase back home.

It should be noted, as the Canadian news agency CBC News explains, that the Mexican government may pressure Harper to lift “Canadian travel visa requirements on visiting Mexicans.” We will have to wait until February 19 to see if these restrictions are in fact lifted.

Finally, it will also be interesting to see if the NSA scandal will be addressed by the Mexican government, as the U.S. intelligence agency also spied on Mexican leaders. As recently as mid-January, the Mexican ambassador to the U.S. Eduardo Medina Mora, declared that Washington has barely explained the NSA’s operations.

More trade more integration?

If nothing else, the upcoming Toluca summit will be an opportunity for the three leaders to give flattering speeches about the North American Free Trade Agreement (NAFTA) which celebrates its 20th anniversary this January 2014.

The agreement has been repeatedly praised by business communities and trade agencies alike. For example, the website of the U.S. Trade Representative highlights how “All member economies have grown significantly from 1993-2003: United States: 38% economic growth, Canada: 30.9% and Mexico: 30%.”

Of course, the data does not portray the full reality of what NAFTA does, like the exploitation of Mexican laborers that work in U.S. -owned factories: The Maquiladoras.

Some analysts have also critiqued the agreement as not having positive effects on the U.S.; a January op-ed in The Guardian argues that “the promised trade surpluses with Mexico turned out to be deficits, some hundreds of thousands of jobs were lost, and there was downward pressure on US wages.” Moreover, there are still sensitive issues regarding commercial integration that have not been perfected, such as allowing Mexican trucks to cross the U.S. border.

All in all, it is expected that if the three leaders do discuss trade initiatives, an issue which will probably be brought up by Harper, some mention of NAFTA will be in order.

Mexico stands out

Finally, it is worth stressing that hosting the Three Amigos summit will be a very important event for the Mexican government. As for what this means for President Pena Nieto himself, this is a perfect way to begin 2014.

Pena Nieto came to power in 2012 and in 2013 he carried out several high-profile diplomatic meetings. Most memorably, in April of last year Pena Nieto traveled to China where he met with President Xi Jinping. The Chinese leader returned the favor in June and the two leaders signed the (stereotypically called) Tequila Agreement, in order to foment bilateral relations.

In May 2013, President Obama traveled to Mexico to meet with Pena Nieto, though in a May 7 commentary for VOXXI, I stressed that the U.S. leader’s trip to Mexico (and Costa Rica) ended without high-profile agreements. Finally, this past December, the Mexican leader made a memorable trip to Turkey.

Thanks to its economic development, in spite of ongoing internal violence, Mexico is regarded as a major player in Latin America and a growing global power. The country is a member of the Pacific Alliance, a trade bloc of vibrant Latin American nations. While the Alliance’s goal is to foment commerce between its members, this could (and should) serve as a springboard for social initiatives, like visa waivers for citizens of the Alliance’s members.

Moreover, a new acronym of rising global powers has appeared: the MINT nations – Mexico, Indonesia, Nigeria and Turkey. Recent analyses and op-eds portray this grouping as the new power players – a December 2013 report in the BBC was titled “From BRIC to MINT.” To what extent MINT could become some kind of alliance or just an informal initiative remains to be seen, but it does exemplify that Mexico is having a growing international presence.

In other words, the Three Amigos will meet at a great time for Mexican foreign policy. A successful summit would include a trilateral resolution that is actually carried out.

Certainly, issues like marijuana legalization or international military-oriented policies cannot be decided immediately. Nevertheless, the focus of the Amigos summit will likely be trade and Mexico’s EPN could use this meeting to more aggressively promote his country’s international trade position by take a leading role in NAFTA for the next years.

VOXXI: A response to Forbes: Corruption in Mexico’s PEMEX

A Response to Forbes: Corruption in Mexico's PEMEX
W. Alejandro Sanchez
VOXXI
December 18, 2013
Originally published: http://voxxi.com/2013/12/18/response-forbes-corruption-mexico-pemex/

Corruption in Mexico continues to be one of the main issues affecting the country, including in big companies like Pemex according to Forbes.

On December 16, Forbes contributor Dolia Estevez published a piece provocatively entitled “The 10 Most Corrupt Mexicans of 2013.” As the title entails, Estevez highlights the deeds (and wealth) of high-profile Mexican citizens, from politicians to labor union leaders, who are allegedly (very) corrupt. One of them is Carlos Romero Deschamps, the leader of the workers labor union of PEMEX (Petroleos Mexicanos), Mexico’s state-controlled oil company.

Incidentally, Pemex will see its control of Mexico’s energy industry dramatically altered in the near future.

Corruption for all

It is difficult to not agree with Estevez’ claims that Romero is a fairly corrupt individual. Romero, his wife and children are reported to own various houses in wealthy neighborhoods. Another giveaway about his lifestyle and wealth comes from his daughter, Paulina Romero, who utilizes social media to show off her travels around the world and possessions, such as $12, 000 Hermes luxury bags.

According to Forbes, his union monthly salary is $1,864. A high salary for Mexican standards, but it is hard to see how he could have such an opulent lifestyle. But Romero’s income does not only come from being a union leader. It has been reported that in 2011 he received $21.6 million for “aid to the union executive committee” (what kind of aid is worth $20 million is unclear) and $15.3 million from union dues.

Romero is also known for his political connections, which arguably have helped maintain his high-profile, influential position. Specifically, he has had ties the ruling PRI party (Revolutionary Institutional Party) since 1961. The best example of these ties is that, besides being a union leader, Romero is also a PRI senator.

The end of PEMEX as we know it?

Corruption allegations within Pemex should be placed within the greater picture of the company’s future. In a very ambitious move, Mexican President Enrique Pena Nieto (EPN) was recently successful in getting the Mexican congress to vote in favor of dismantling Pemex’s monopoly of Mexican oil production.

“In coming years foreign companies could invest as much as $20 billion a year in Mexico’s oil sector, thanks to new rules that will allow production sharing,” explains Forbes commentator Nathaniel Parish.

The move was applauded by a recent December 15 op-ed in the Washington Post, which praised how EPN was able to convince the opposition party PAN (National Action Party) to vote in favor of his plan. The article went on to robustly praise EPN, “Mexico is becoming the Latin oil producer to watch – and a model of how democracy can serve a developing country.”

The Post commentary also adds that Pemex, “[a] notoriously inefficient Mexican firm will have a revamped governance that eliminates union members from its board. Private companies also will compete to supply electricity to the national grid, which should lower energy costs for consumers and industry.” The issue about eliminating union leaders is a particularly sensitive one. So far, it is not clear how the aforementioned Romero’s position as a union leader will be affected by EPN’s move.

It is worth noting how the Post’s praise for EPN included how he will now have to make sure his reform is passed without being blocked by either the PAN and other “left-wing legislators.” Said legislators are members of another opposition party, the PRD (Democratic Revolutionary Party).

Cuauhtemoc Cardenas Solorzano, a PRD leader argued in October that his party is not against investment from companies that are not Pemex,  but warned that corruption within the company will not end by opening up oil production. To express their disapproval with EPN’s energy plan, this past November the PRD left the “Pact for Mexico,” a roundtable of sorts between the country’s three major political entities.

Other issues

The question now becomes whether this change in the structure of Mexico’s oil industry will have any effective results.

First of all, whether it is Pemex or other companies controlling the pipelines, security will continue to be an issue. As the Mexican daily La Jonada reported in May, only between the first three months of 2013 there were 730 illegal siphons, in comparison to 377 in the same period of 2012. To better illustrate the insecurity of energy infrastructure, this past Monday, December 16, hundreds of people had to be evacuated after an explosion outside Mexico City. The reason for the incident was that thieves tried to tap into a Pemex natural gas pipeline.

Secondly, it is unclear to what extent energy reforms will bring more accountability and transparency into Mexico’s vital oil industry. Given that Romero Deschamps is also a PRI member and a congressman, it is unlikely that he will be investigated on how he has amassed his significant wealth.

In other words, a re-structuring of Pemex sounds good in theory, and it could very well bring more foreign investment to the country which, the Washington Post optimistically argues, could decrease energy charges for the Mexican population (although other analysts argue the contrary). Certainly, a decrease in gas prices would be welcomed by the Mexican population and this would increase EPN’s popularity.

However, examples like Romero Deschamps demonstrate that corruption is still an endemic problem and if President Pena Nieto wants to demonstrate that he is serious about dramatically changing the culture of corruption in his government and party, he may have to take down fellow party members.

VOXXI: Mexico’s foreign policy under Enrique Peña Nieto

Mexico's Foreign Policy under Enrique Pena Nieto
W. Alejandro Sanchez
VOXXI
February 13, 2013
Originally published: http://www.voxxi.com/mexicos-foreign-policy-under-pena-nieto/

A February 4 article on The Huffington Post by Cory Siskind, a member of the global consultancy group Control Risks, entitled Pena Nieto Can Fill the Void of Chavez’s Regional Leadership discusses Mexico’s potential, under its new president, Enrique Pena Nieto, to become a regional leader in Latin America. Although comprehensive, Siskind’s analysis does not address a number of potential challenges to Mexico’s foreign policy under the EPN administration in the coming years.

Siskind is correct in saying that Venezuelan President Hugo Chavez’s ongoing battle with cancer appears to have created a Latin American and Caribbean leadership void that could potentially be filled by Mexico. In discussing which regional leader could fill this void, the analyst further argues that Brazilian President Dilma Rousseff is “focused on frying bigger fish, like negotiating with Iran,” and may not be interested in focusing on Latin American issues.

This is a questionable statement to say the least, since it is debatable to what extent Brazil is willing to ignore interregional politics. For example, it was under President Dilma that the MERCOSUR bloc accepted the ever-controversial Venezuela as a member. In addition, Dilma still sees the promotion of United Nations (UN) reform as an important national interest in continuing efforts to attain a permanent seat in the UN Security Council. For this to happen, Brazil must maintain constant Latin American and Caribbean support. Nevertheless, it is true that Dilma has also made several trips to Europe and seems to be interested in also reproaching African and Asian powers. As Ben Tavener wrote for the Rio Times, Dilma’s “visits [to Europe] cement Brazil’s position as chief bridge nation between Latin America and Europe.”

Siskind also argues that Mexico has become a leader among the Alliance of the Pacific countries, which include Chile, Colombia and Peru. These nations have enjoyed major economic growth over the past decade under governments that have promoted greater free trade, international investment and generally pro-Washington diplomatic postures.

Siskind also highlights how Mexico has pushed for greater integration with Central America via the Mesoamerica Integration and Development Project. President Pena Nieto may not be able to use Mexican oil as a diplomatic weapon like Chavez has done with initiatives like PetroCaribe, but he can certainly push for greater investment in order to improve diplomatic relations.

Pena Nieto faces challenge in gaining support of LATAM countries

The Mexican leader is lucky to have inherited a nation that is enjoying stable economic growth and has several prominent and extremely wealthy citizens, such as Carlos Slim, the richest man in the world. In theory, Pena Nieto could rally the aid of wealthy Mexicans to promote some kind of “checkbook” diplomacy in exchange for cementing diplomatic alliances. Such “checkbook diplomacy” certainly has worked for China.

Moreover, there are many organizations in the existing alphabet soup of Western Hemisphere agencies that Mexico could take leadership in. For instance, Mexico could revive the Association of Caribbean States (ACS), which is perhaps the most obscure and least known of Latin American agencies. The ACS was created in 1994 and has twenty-eight member States encompassing the Caribbean, Central America and northern South America.

Nevertheless, just as Siskind correctly points out, it will be difficult for President Pena Nieto to gain the support of countries like Bolivia, Nicaragua or Ecuador, given the more radical and anti-Washington ideologies of their Heads of State. Ecuador’s President Rafael Correa is likely to be re-elected in the country’s upcoming presidential elections, so Quito’s current foreign policy path will most likely continue.

Indeed, Pena Nieto’s greatest challenge will be how to address the historical assumption that the Mexican government is Washington’s organic ally in the Western Hemisphere. It is true, as Siskind argues, that “Pena Nieto will not have to rely on finding a scapegoat (‘Yankee imperialists’) to garner support,” but the region as a whole continues to focus its aim on how to “escape” from the U.S.’s historical influence, as exemplified by the growing demands that the Cuban embargo be lifted and for Havana to join the Summit of the Americas meetings.

A straightforward statement by Pena Nieto on what his goals are for the future of U.S.-Mexico and Mexico-Latin America relations may help clarify the situation. This move may also assist Mexico in gaining new allies, even among those that may be ideologically different, like the states that make up the Bolivarian Alliance for the Peoples of Our America (ALBA) , such as Bolivia, Ecuador and Venezuela. When Pena Nieto, as president-elect, met with President Barack Obama last November, it was interpreted as a sign that close ties between the two North American governments would continue, in particular in jointly fighting transnational drug trafficking. When Pena Nieto eventually meets with the new U.S. Secretary of State, John Kerry, we will have a better idea of how the relationship between the two countries will evolve in the coming years.

Ultimately, a successful foreign policy is not created instantly. Mexican presidents are elected to six-year terms, so EPN has plenty of time to develop a comprehensive continental policy. The question that remains to be answered is whether the diplomatic alliances Pena Nieto forges will be maintained by the next administration, which will come to power in 2018.

Since Mexican presidents cannot run for re-election, it will be a question of whether Mexico’s Institutional Revolutionary Party (Partido Revolucionario Institucional or PRI) can remain in power in Mexico and thus maintain the continuity in the country’s new foreign policy. Then again, seven decades of PRI leadership were not particularly kind to Mexican domestic politics, especially when it came to governmental transparency and combating political corruption. Nevertheless, we are likely to witness positive developments in the foreign policy realm under EPN’s rule.

Cory Siskind’s commentary for The Huffington Post provides us with a strong analysis of Mexico’s potential role in the Western Hemisphere during the Enrique Pena Nieto administration. It remains to be seen whether the new President of Mexico is ambitious enough, as well as properly-advised, to take on the regional trade and diplomatic initiatives which would lead it to fill the void that Chavez has arguably left.

Read more: http://www.voxxi.com/mexicos-foreign-policy-under-pena-nieto/