The US underestimates Mexico’s negotiators at its own peril

How Mexico successfully negotiates massive treaties, like NAFTA and the USMCA, with even more massive negotiating partners.

This is part one of a two part series on Mexican foreign negotiations—if you want to read part two, you can find it here.

The perception of Mexico as a relatively minor partner to the its northern neighbour has often benefitted it in the past. It comes with the territory: from the US’s perspective, given how relatively stable the relationship is, it has historically been easier to give Mexico a lot of what it wanted to keep issues on its southern border at bay.

During the Cold War this was relatively easy. A Mexican president could point at a union or social movement he didn’t like and wonder out loud in front of the US ambassador what on Earth he was to do with these Communists. Weapons and aid would soon follow.

Post-1989 globalization completely changed the way Mexico approached international relations. Debt relief and trade talks became the main focus. Mexico—following the ideological tides of the moment—was transformed from one of the world’s most closed economies to one of its most open. 

Then, in 2018, Andrés Manuel López Obrador came to power. It was not that the president was anti-trade. It simply wasn’t a priority. Under this new administration, the Mexican government has since turned its focus inward—now wanting fuel and food self-sufficiency and to prioritise certain contracts on the basis of a company’s nationality.

International negotiations have consequently taken a more adversarial feel. While the 1990’s and early 2000’s offered prosperity through free trade, mediated through the Washington Consensus, the current multipolar world seems far more dog-eat-dog. The Mexican government’s current approach to international negotiations has therefore emphasised transnational security and migration more than trade.

Through all these transformations, Mexico is and has been well positioned to talk its way out of trouble and into many of the deals it has set its mind to. What’s peculiar is that very few people seem to agree on the reasons why. Technical and political knowhow, and a savvy navigation of the global geopolitical forces at play are the keys to Mexico’s negotiating prowess. But whether Mexico’s diplomatic corps and negotiating elite are still up to the job is increasingly a matter for debate.

Negotiations in the “good old days”: NAFTA and the USMCA

Following the fall of the Soviet Union, an old CIA officer once recalled at a conference, that a spotty freshman walking in through the Agency’s door virtually had as much experience as a seasoned Cold War veteran. The world had, suddenly and completely, changed—and it was a great time to be a novice.

Mexico has often been lucky enough to find itself taking a seat at the negotiating table as one such freshman during the moments of great geopolitical change.

The years of the USSR’s decline and fall were very ones during which the North American Free Trade Agreement (NAFTA) was negotiated. It was a turbulent time in which old paradigms fell away and Mexico was suddenly in a position to jump on the band wagon of a new world order. 

It joined the General Agreement on Tariffs and Trade (GATT), predecessor of the World Trade Organization (WTO), and “between 1989 and 1991, quickly got up to speed with the developed countries in terms of technical capabilities in order to negotiate complex commercial relations, conduct economic analysis, and so on,” Kenneth Ramos Smith, one of the negotiators for the Mexican side first for NAFTA and then the USMCA, told The Mexico Political Economist. 

Technical experts of that generation, like Smith Ramos, became the institutional memory of Mexico's trade negotiating institutions. These are chiefly made up of the Secretariat of Foreign Relations alongside the technical branches of different government offices, from the Secretariats of Trade, the Economy, Agriculture, Energy, Labour, The Bank of Mexico, and dozens more.

These were the experts that subsequently negotiated the USMCA, NAFTA’s successor treaty, after president Donald Trump demanded an update to old trade rules. Yet, despite the unexpected broadside, Mexico came away feeling like it had struck a winning deal with both the US and Canada’s very knowledgable and technically savvy negotiators.

To Martha Bárcena, Mexican ambassador in Washington from 2018 until 2021, Mexico’s advantage stems from an understanding that political actors from her country often have a deeper understanding than their US counterparts of how interdependent both countries are.

She told The Mexico Political Economist that fact finding and fact sharing were crucial to negotiating with the US. So, when negotiating treaties, the Mexican Embassy’s job is to lobby US House and local representatives in order to get them to grasp how much their particular constituency needs Mexico. The idea is to get key political figures as well as public opinion on side.

“We knew that, with Texas, we were trading about $216 billion [dollars] a year. Then, with California, about $90 billion a year,” said Barcena. “But even to the surprise of the Michigan governor and the Michigan legislators, Michigan was our third partner with a trade of $68 billion. … When they saw the data they were shocked, they said ‘We didn’t know how important Mexico was to us!’”

Mexico had quite a lot to lose from the end of NAFTA. Much of its economy is geared towards exports and the US. So, when president Trump described it as “the worst trade deal ever made,” Mexico was on the defensive. But in the years since the country seems to have come out a winner, replacing China as the US’s main trading partner in large part thanks to the USMCA’s rules limiting production to North America. Nearshoring as we know it would not have happened without NAFTA or the USMCA.

USMCA is “a much more protectionist agreement in regards to the rest of the world,” concluded Bárcena, and Mexico has benefitted from it.

Yet, the bonanza may not last for long, particularly since, in 2025, USMCA will be up for review. Mexico’s negotiators will be put back on the spot—only this time, many worry whether they’ll be up to face the new challenge.

Continue to part two here.