Until last year, the North American Free Trade Agreement (NAFTA) had enjoyed a relatively untroubled existence. For its nearly 24 years, the agreement, which links the economies of the United States, Canada, and Mexico by removing trade tariffs between them, sat largely beyond the public consciousness. But those quiet days are no more. On October 17, the fourth round of talks to renegotiate NAFTA, spurred on by President Donald Trump’s insistence that it is to blame for lost jobs in America, came to an end. Mexico’s leaders had hoped to finish the talks quickly, but Trump’s demand to balance trade deficits has pushed out the talks. At the end of last month, negotiations were extended to 2018.
This is bad news for the government of Mexico’s President Enrique Peña Nieto, which hoped to finish talks before the new year to reassure investors and dispel the uncertainty swirling around the trade deal that has sent the peso flailing up and down. Mexico’s political elites also hoped that by wrapping up discussions, NAFTA would remain beyond the grasp of Andrés Manuel López Obrador, the left-wing populist running for president in next year’s elections. A 63-year old former mayor of Mexico City and three-time presidential candidate, López Obrador has called NAFTA a bad deal for Mexico, and has demanded that re-negotiations be delayed until after the upcoming election. Peña Nieto, he has said, is “a weak leader who could sell out Mexico to the U.S.” López Obrador is a nationalist, and restructuring NAFTA is just one his many policy proposals that could take the Mexico-U.S. relationship on a much different route. So far, his pitch is working: many early polls put López Obrador in the lead.