Last Sunday, thousands of Mexicans in Tijuana did something unusual. They stayed at home. Life in the seedy border town revolves around “the line”: many locals live on one side and cross every day to go to school, work or the shops. But rallied by the social media hashtag #UnasHorasPorMéxico — a few hours for Mexico — protesters stopped crossing the border to demonstrate against Donald Trump’s immigration restrictions and anti-Mexican invective. The aim was simple: to make Mexicans’ presence felt by their absence. Almost 20m Mexicans visit the US every year, the most by far from any single country.
US agriculture companies feel the same way about Mr Trump’s plans for Nafta. They fear its loss, and of the $18bn a year Mexican market. Now they are starting to speak up for the trade agreement. Indeed, the US-Mexico stand-off is more than a “row between neighbours”. Potentially it has a huge global geopolitical impact too.
Just follow the logic. If the Mexico and the US cannot reach agreement on re-negotiating Nafta, the two sides would automatically fall back on WTO tariffs. That would mean an average 3.5 per cent tariff in the US on Mexican goods, versus an average 7.5 per cent Mexican tariff on US goods.
But would that kind of 2 to 1 deal be acceptable to the White House? Almost certainly not. So what does that imply? Take the argument to its logical conclusion, and it suggests that the US would leave the WTO…and so upend the global trade order of the past 60-odd years. What a prospect.
Elsewhere – because the hemisphere is more than just about Trump – the Odebrecht corruption scandal continues to reverberate around the continent, potentially taking out former Peruvian president Alejandro Toldeo. Meanwhile, at the home of the scandal, foreign investment continues to pour into Brazil. In December alone, FDI hit $15bn, a record, while airline Azul filed for an IPO.
Even in Mexico, animal spirits continue to stir. Jose Cuervo, the world’s largest and oldest tequila maker, filed this week for an almost $1bn stock offering. And in Monterrey, Mexico’s business capital of the north, investment is still coming in. ¡Órale!
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