The presidents of Chile, Colombia and Peru will have to wait for their piece of Andrés Manuel López Obrador.
On Friday, Mexico’s president-elect backed off an invitation from current President Enrique Peña Nieto to attend the Pacific Alliance’s eighth annual summit, which begins today in Guadalajara. López Obrador cited the fact that his July 1 victory hasn’t technically been certified by Mexico’s electoral court as his reason for missing the gathering. That explanation failed to stop speculation that a campaign finance controversy surrounding López Obrador’s Morena party (see below) had spoiled AMLO’s honeymoon with Peña Nieto and helped derail the trip.
But López Obrador’s explanation isn’t so far-fetched. His transition team has proven itself responsive to public opinion – recent concern that the president-elect is behaving as if he were already head of state may have convinced them to take a step back. Indeed, it is hard to imagine the transition’s current pace of pronouncements and press conferences lasting through inauguration day on Dec. 1.
NAFTA and Trump
On Sunday, López Obrador publicly released a letter to President Donald Trump, outlining areas in which he believes the U.S. and Mexico can begin a “new phase … based on mutual respect.”
The letter, in which López Obrador applauds Trump for “displacing the establishment,” focuses on infrastructure and resource development, economic policy on the border, and joint financial support for Central America, all presented as ways to reduce migration to the United States. As he did on the campaign trail, López Obrador said in his letter that a primary focus of his government will be to make it so that no Mexican is forced to migrate due to violence or economic need.
López Obrador also called for quick progress on NAFTA negotiations, noting that the uncertainty of prolonged talks would have a negative effect on Mexico’s economic growth. On July 26, Jesús Seade, who López Obrador has tapped to lead negotiations once the new government is in place, will travel to Washington for a round of talks alongside Mexico’s current government. López Obrador will also meet with Chrystia Freeland, Canada’s foreign minister, on July 25.
The upcoming talks come as the U.S. Commerce Department weighs the possibility of applying tariffs to cars and auto parts, a move that would disrupt supply chains that see around 40 percent of U.S. auto-part imports coming from Mexico.
Mexico’s National Hydrocarbons Commission (CNH) announced on July 18 that it would postpone auctions on oil and gas projects scheduled later this year to February 2019.
CNH Director Juan Carlos Zepeda said the move would provide certainty to the industry, giving the regulatory agency and members of López Obrador’s team time to review existing oil and gas contracts for signs of corruption, a major campaign promise.
But Zepeda’s claim that the delay was “positive” prompted skepticism from experts. Miriam Grunstein, chief energy counsel at Brilliant Energy Consulting, told AQ she suspected the bid round for unconventional gas would have been “glum” if it had gone through as planned, but that the timing of the announcement suggested the change was made under political pressure, rather than for commercial reasons.
“It’s a sign of the fragility of the regulatory agencies,” Grunstein said. “It like they said ‘Let’s wait for a clear sign of where the incoming administration is going.’ That’s very bad for a technically independent agency.”
The INE Controversy
On July 19, commissioners from Mexico’s National Electoral Institute (INE) voted 10-1 to impose a 197 million peso (about $10.3 million) fine on López Obrador’s Morena party for breaking campaign finance rules. The announcement prompted López Obrador to tweet from his ranch that authorities had committed a “vile revenge” against him and the party he founded in 2014.
At issue is a fideicomiso, or trust, set up by party members to support victims of last year’s earthquakes. INE contends that Morena broke reporting rules by accepting donations in cash and failing to properly account for the origin and destination of some funds. The election authority’s case rests on their belief that the trust represents an outgrowth of the party. López Obrador and the trust’s technical committee note that the fund was set up as a private entity, and say that none of the 85 million pesos collected so far has come from public money. Morena officials have appealed their case to the electoral court.
The fine prompted a heated response from both supporters and critics of López Obrador. Denise Dresser, one of Mexico’s most prominent commentators, expressed concern on Twitter that the distribution of funds from members of a political party, even if the trust is a private entity, could lead to a clientelistic relationship with voters. Though documents associated with the trust make no mention of Morena, López Obrador’s prominent involvement and promotion of the fund make it hard to believe that none of its beneficiaries associated their 2,400-peso disbursement with support from the party.
Other political parties used institutional mechanisms, approved by INE, to donate funds to the relief effort. López Obrador’s mistrust of those institutions has contributed to the controversy he faces today, even if it also meant quicker, more direct aid to earthquake victims. No good deed goes unpunished.
Russell is AQ’s correspondent in Mexico City.