Mexico overestimates its negotiating prowess at its own peril

Budget cuts and in-fighting are distracting the country from imminent and crucial negotiations.

This is part two of The US underestimates Mexico’s negotiators at its own peril—if you haven’t read part one, start here.

There is a lot of bad blood between Mexico’s current government and the old guard it replaced. It isn’t simply the sour grapes of classic party politics. It stems from a deep ideological sea change. 

Since the latter part of the 20th century, there had been a consensus: Mexico’s technical institutions were necessary for its development. They, therefore, remained relatively unchanged as democracy came to the country at the turn of the millennium. The PRI gave way to the PAN—the former the party that controlled Mexico for decades, the latter the upstart centre-right contender. Yet both agreed on this central premise.

Then, came president Andrés Manuel López Obrador.

The break was immediate. At US president Donald Trump’s request, Mexico renegotiated the transformation of the North American Free Trade Agreement (NAFTA) into the US-Mexico-Canada Agreement (USMCA) under the stewardship of yet another PRI government. It had rushed the process to the very limit in order to leave the deal settled: The dotted line was signed the day before López Obrador’s administration was sworn in on December 1, 2018.

The remaining talks were meant to merely iron out any last details, but even those caused tension—not between the negotiating parties, but within the Mexican legation. Then-Mexican ambassador to the US, Martha Bárcena, was categorical about her disappointment with the new administration’s approach when she spoke to The Mexico Political Economist. She specifically named and criticised López Obrador’s chosen negotiator for sidelining the Mexican Embassy in Washington. “It was something Mexico never did before,” she said.

This was the beginning of a series of changes that would outrage those who lauded Mexico’s network of technical experts and autonomous institutions that defended their country’s interests across the world.

The officials who joined under López Obrador think very differently. “This ‘Mexican technocratic exceptionalism’ responds to another age,” Luis Godoy—who was general director of the Secretariat of the Economy’s unit of global economic intelligence early in this administration—told The Mexico Political Economist.

The current government’s aim in those early days, Godoy said, consisted in conceiving of “a new vision of State.” It would be slimmer, with limited salaries and fewer positions for those more technical roles. To the President and his followers, these “neoliberal technocrats” of the old guard were exactly the sorts of people who embodied everything they wanted to change.

Godoy, for this reason, did not deny the expertise of this cohort of seasoned negotiators. “They were incredibly talented experts, technicians, and lawyers [but] what interests did these experts represent?” 

It's a debate that the current Mexican presidential election has reopened—right on time for the return to the negotiating table for USMCA, which will be reviewed by all parties (including a potential Trump administration) in 2026.

Unsettlingly, a worrying amount of people seem pessimistic about Mexico’s prospects.

The negotiation to come

On paper, the government and opposition are in lockstep regarding the USMCA review. At a Council of the America’s panel yesterday one would have been hard pressed to distinguish between the approaches of Ildefonso Guajardo—secretary of the economy and USMCA negotiator—and that of Raquel Buenrostro—the current secretary. The review, North American economic integration, nearshoring, and regional trade are all priorities.

Most important of all, everyone is reading from the same script: “The review of the USMCA is not a renegotiation,” they all pray. Instead it is a forum where all parties will be able to bring up “irritants” in the existing agreement, as Buenrostro put it. Everyone will then get together and try to reach an agreement as to what rules they don’t like or feel have been broken. New trends that weren’t as prominent in 2018 will also be discussed, like semiconductors and electric vehicles. Then, after the 2026 joint review, there will be a period of 10 years for these issues to be ironed out.

The opposition is terrified the government will stuff it up for lack of the right talent—triggering an actual renegotiation. “In areas of the Foreign and Trade Ministries,” said Bárcena, “Mexico has lost some of its most well-trained negotiators. So we may be starting the process of reviewing USMCA with negotiators who do not have the highest technical capabilities.” 

They lay the blame squarely on López Obrador’s cuts. The Foreign Office is protected by its relative autonomy, Kenneth Ramos Smith, a Mexican USMCA negotiator, told The Mexico Political Economist. But other secretariats saw sweeping cuts including 50% of the workforce at the Secretariat of the Economy. Following internal tussles and purges, Smith Ramos believes that that figure is now up to 70%.

And it's not like these departments could simply hire new talent; critics claim that these skills are ones built up over years and many negotiations. “It’s not that [the new experts] are not capable, but they might not know in-depth the technical trade and international law matters,” Bárcena said. "Even though I think that in one area [the current government] is quite strong, which is the rapid response mechanism on labour. They are very well trained on that.”

To the casual observer this final point seems straight forward: Mexico’s current administration comes from the left, so a more muscular labour stance when compared to its predecessors makes sense. However, it also shows how much the times have changed—USMCA is far stricter on worker pay and rights than NAFTA ever was.

“Mexico’s positions did not emerge in a vacuum,” said Godoy. In the decades immediately before and after the turn of the 20th century, Mexico dutifully reflected the prevalent globalising, free trade policies of the moment. Its negotiators then worked very closely with Mexican business to come to the best agreements with foreign partners in what was known as el cuarto de al lado—the private sector in the room next door. 

For the Mexican government back then, el cuarto de al lado was essential to ironing out issues on tariffs, perishables, and lines in the sand during the negotiations of NAFTA and USMCA. For those against the “technocratic approach,” el cuarto de al lado was the perfect illustration of the collusion between big business and government. Under the mindset of the times, the wellbeing of Mexico's companies was equivalent to the nation’s wellbeing, and treaties were negotiated accordingly.

This is not the current Mexican government’s view, and the purging of the experts that represented it was more than just an exercise in austerity, it was a realignment of President López Obrador’s promise to “separate the economic from the public spheres.”

This posture coincided with the end of globalisation generally. Regionally, change could be said to have been initiated by president Trump, who demanded a renegotiation of NAFTA. It was a departure from the internationalist approach and a return of the nation-state. Even the US-Mexico-Canada Agreement's name reflects this shift away from regionalism and towards a treaty made up of “the sum of different national interests,” as Bárcena put it. 

Beyond trade, Mexico’s position regarding its northern neighbour has also been reflective of this new mindset. Migration and security have taken centre stage. This explains Mexico's deployment of the armed forces to stall migrant caravans. It also explains the government’s aggressive legal strategy, not against State actors in the US, but against US arms companies. 

Ultimately though, even opponents to the old “technocratic” system are disappointed with the current government’s lack of vision. “Mexico does not represent anything in this post-neoliberal age”, said Godoy, lamenting that Mexico—and Latin America more broadly—are well positioned for climate leadership in a multipolar age.

The world does not seem to be all too concerned with climate issues though and so, true to type, both Mexico’s government and opposition, rather than leading, are going with the geopolitical flow. New experts can be trained; what Mexico seems to be lacking is the political will to set out an ambitious vision for itself on the global stage.

These are your key takeaways:

1. Mexican foreign policy decisions are often simply a response to broader geopolitical trends.

2. Mexico is broadly aligned in its desire to keep the USMCA review in 2026 short and sweet—the debate is how to make this happen.

3. Mexico’s negotiators are still a skilled set, even in austere times. Budget cuts may hurt their prior knowhow; a lack of political vision from the top will affect what they’re negotiating for.