Mexico: Tough Congressional-Executive Relations Ahead

By Daniela Stevens*

Piñata with the Mexican flag in the background

Bandera mexicana en el Zócalo de la Ciudad de México / Wikimedia/ Creative Commons

Whoever wins Mexico’s presidential election on July 1 probably will face a divided and cantankerous Congress – especially if, as appears likely, Andrés Manuel López Obrador of the Morena Party is the victor.  López Obrador has been ridiculed by the Mexican political class, some of whose leaders have called him the next Hugo Chávez, but most polls give the polemical candidate at least a 10-point lead over Ricardo Anaya of the coalition Por México al Frente.  In Congressional races, polls also give the advantage to López Obrador’s party and its coalition partners, including Partido del Trabajo (PT) and Partido Encuentro Social (PES), under the joint banner of Juntos Haremos Historia.  According to the Parametría poll, 32 percent of respondents intend to vote for Morena, five percent for PT, and two percent for PES.  Other polls give them higher numbers.

  • The formerly hegemonic Partido Revolucionario Institucional (PRI) appears likely to fall to third place due to President Peña Nieto’s poor performance and the party’s association with corruption, while the Partido de la Revolución Democrática (PRD), traditionally the largest leftist party, would be the fourth.
  • Under the most likely post-election scenarios, López Obrador’s coalition would constitute the largest minority in the Chamber but still fall short of the 51 percent absolute majority, except perhaps by the thinnest of margins. Under Mexico’s mixed electoral system – with both majority and “proportional representation” determining the allocation of Congressional seats – the larger parties lure the smaller ones into coalitions, but unity is often seriously challenged during legislative and other battles.

The traditional categories of left and right are growing obsolete in Mexico, as parties and candidates increasingly resort to opportunism rather than act based on loyalty to any particular ideology or party.  Personal and political grudges also often trump political agendas.

  • As a result, an alternative scenario may emerge in which alliances shift after election day in a way that enhances López Obrador’s power. Tensions between the left-leaning PRD and López Obrador, who was its leader for many years, were so deep that the candidate split with it and created Morena as a party in 2014, but opportunists in the party could well jump ship and join him if he wins by a comfortable margin.  In the PRI also, frustration with party leadership could also prompt defections, and López Obrador – a prominent Priista in the 1970s and 1980s – could also harness their backing.
  • Party switching from one election to another has long been a common practice of politicians in Mexico, but only recently have representatives switched parties in the midst of legislative periods. In particular the PRD’s ranks significantly dwindled as legislators elected under its rubric defected to join Morena. Were this to be replicated later this year or next, López Obrador’s congressional majority could be larger than polls suggest.
  • Party discipline in Mexico has been comparatively higher than in other multi-partisan presidential systems such as Brazil, because of the constitutional prohibition of consecutive reelection. In the past, incumbents did not have incentives to serve their constituencies because their careers depended strictly on party leaders, who centralized nominations to elective positions.  From 2018 on, representatives in both Chambers may run for reelection.  The promise of a Morena candidacy can fuel even more defections into its ranks if the party keeps growing its electoral base.
  • If Morena achieves such dominance, the Congress’s commissions, the equivalent of U.S. Congressional committees, could be important partners of López Obrador because the executive delivers proposals directly to them, and they, in turn, issue the final dictamen that the plenary votes on. Juntos’ influence in the commissions would translate into a fairly unexamined prioritization of the presidential agenda.

Even a comfortable victory on July 1 will not assure López Obrador a readily compliant Congress.  Most legislators in the Por México al Frente coalition, which includes PAN, PRD, and Movimiento Ciudadano stalwarts, will certainly constitute an obstructionist opposition.  How successfully they can sabotage the president’s agenda will obviously depend on their numbers, but unity in opposition to Constitutional amendments required by some of his campaign promises appears certain.  Constitutional amendments require a two-thirds majority in both chambers of Congress and in a majority of state legislatures – unachievable in any likely political configuration during a López Obrador administration.  His proposals for revocation of presidential tenure, lowering high-ranking officials’ salaries, and reversing education reforms– which would require Constitutional amendments – thus appear dead on arrival.  Absent reliable Congressional support, López Obrador would also have difficulty passing essential budget and revenue bills and gaining confirmation of important appointees such as the attorney general and key prosecutors.  No candidate would have an easy Congress, but the Mexican parties’ willingness to set aside petty divisions and coalesce behind pressing issues, at least early in the presidential term, appears lower than ever before.  Thus, López Obrador would have a lot riding on the willingness of some sectors of the opposition to defect.

May 24, 2018

* Daniela Stevens is a Ph.D. candidate in Political Science in the School of Public Affairs at American University.

U.S.-Mexico: Trump’s Misguided Approach to NAFTA Renegotiation

By Robert A. Blecker*

Three people stand at podiums with flags behind them

Canadian Foreign Minister Chrystia Freeland, U.S. Trade Representative Robert Lighthizer, and Mexican Minister of Economy Ildefonso Guajardo (L to R) participate in the fourth round of NAFTA negotiations in Washington, DC in October 2017. / State Department / Flickr / Creative Commons

President Trump has characterized NAFTA as a “win” for Mexico and a “loss” for the United States; his administration is currently working on a renegotiated “deal” that would allegedly reduce the U.S. trade deficit and recapture lost manufacturing employment, but his nationalistic approach fails to recognize the fundamental causes of both U.S. and Mexican economic problems.  In fact, NAFTA was a huge success for President George H.W. Bush and his administration, as it achieved their fundamental goal of enabling U.S. corporations to make products in Mexico with low-cost labor – without fear of expropriation, regulation, or other loss of property rights – and export them to the United States duty-free.  The Mexican government went along because it thought NAFTA would bring in desperately needed foreign investment and provide a growth stimulus, while U.S. and Canadian workers rightly feared that they would lose jobs as a result.  While much discussion has focused on which country “won” or “lost” in NAFTA, that is the wrong way to evaluate a trade agreement.  The two key criteria for judging the accord are which sectors, groups, or interests won and lost in each country, and how it, in conjunction with other policies, has affected long-term growth, development, and inequality in each.

  • Under NAFTA, U.S.-Mexican trade in goods and services has grown exponentially, reaching $623 billion (with a U.S. deficit of $69 billion) last year. However, NAFTA (along with other causes and policies) has contributed to worsening inequality in both the United States and Mexico.  Less-skilled U.S. workers definitely lost, with wage losses up to 17 percent in local areas most exposed to NAFTA tariff reductions.  In Mexico, although consumer gains from trade liberalization were widespread, upper-income groups and the northern region benefited the most.  Real wages for Mexican manufacturing workers have stagnated since 1994.  Labor shares of national income have fallen in both countries since the late 1990s.
  • Domestic policies, exchange rates, financial crises, and the impact of China can make the impact of NAFTA difficult to identify, but effects in some sectors are clear. Mexico gained jobs in automobiles and parts, appliances, electrical and electronic equipment, and seasonal produce.  The United States gained in basic grains, soybeans, animal feed, and paper products.  Although about a half million jobs in automobiles and related industries have “moved” to Mexico, total U.S. job losses in manufacturing (5 million since 2000) have been much more affected by China and technology than by Mexico.  What Trump’s nationalistic rhetoric ignores is that U.S. companies capitalized on these dislocations to raise their profit margins and increase their bargaining leverage over workers and governments both within North America and globally.

Trump’s aggressive posture about NAFTA exploits political discontent with these sectoral effects and the overall worsening of inequality, but the U.S. Trade Representative (USTR)’s key demands in the renegotiation appear unlikely to remedy either problem.  USTR Lighthizer is focused on protection for the auto sector, by requiring higher U.S. content (or higher wages for Mexican auto workers), and on changes to dispute resolution procedures that would favor investment in the United States instead of in Mexico.  At best, these measures could bring back a small number of U.S. jobs; at worst, they could make some U.S. industries less competitive (if costs increase).

All of this debate in the United States ignores the fact that NAFTA has been a huge disappointment for Mexico.  Although export industries like automobiles have prospered, the gains to domestic sectors of the Mexican economy have been limited, resulting in sluggish growth (only 2.5 percent per year since 1994, far below the 7.6 percent achieved in East Asia) and leaving millions in poverty while millions more emigrated to the United States.  Of course, other policies and events (including Chinese competition) played into these outcomes, but NAFTA (and related liberalization policies) didn’t turn out to be the panacea for the Mexican economy that then-President Carlos Salinas promised in 1993.  Yet, in the short run the Mexican economy remains highly dependent on foreign investment and exports to the U.S. market, so Trump’s demands for a revised NAFTA and his threats to withdraw are undermining Mexico’s current economic prospects.  Instead of following Trump’s nationalistic approach, the three NAFTA members should focus on making all of North America into a more competitive region with rising living standards for workers in all three countries.  This would start with policies at home, such as public investment in infrastructure, education, and R&D, that could foster industrial growth, along with redistributive measures like higher minimum wages consistent with each country’s economic conditions.

May 11, 2018

* Robert A. Blecker is a Professor of Economics at American University.

Presidential Elections in Mexico: Tough Campaign, Tougher Challenges Ahead

By Daniela Stevens*

Andrés Manuel López Obrador stands at a microphone

Frontrunner candidate in Mexico’s 2018 presidential elections, Andrés Manuel López Obrador, speaks to the press. / ANDES / Micaela Ayala V / Flickr / Creative Commons

Campaigning for Mexico’s July 1 presidential election officially begins next week, and no candidate appears to have an insurmountable advantage over the others.  Polls vary, but Andrés Manuel López Obrador (MORENA) appears to be the frontrunner, with 35 to 44 percent of support.  He is followed by PAN-PRD coalition candidate Ricardo Anaya, who has between 24 and 31 percent of the vote.  The PRI candidate, José Antonio Meade, seems a third option, at about 20 to 26 percent, and Margarita Zavala, the only independent candidate who officially obtained registry, lags far behind.  It is too early to see if voters will base their decisions on party loyalty or on perceptions of the candidates.

  • López Obrador (widely known by his initials, “AMLO”) has broad name recognition – 84 percent of Mexicans are familiar with him for better or for worse – but Anaya, Meade, and Zavala have an important opportunity to build new images and attract voters. Indeed, AMLO sometimes seems to be in a race against himself; his rhetoric is often harsh, and his disregard for international free trade alienates a large sector of the business world and the media.  His mixed signals regarding a “review” of the contracts made in conjunction with energy reforms have fostered distrust and uncertainty.
  • Ricardo Anaya’s strategy appears likely to be open confrontation with PRI candidate Meade, aiming to attract PRI voters who see him as the candidate best positioned to prevent an AMLO victory. Anaya’s focus has been on winning the endorsement of key figures in states that constitute large electoral strongholds, such as Jalisco.  However, Anaya’s alleged involvement in a money laundering scandal stands to undermine his support.   PRI Secretary General Claudia Ruiz Massieu tried to tar him in an international context last week by giving the OAS a file with evidence she claimed substantiates the charges against him.  Anaya has cried foul.
  • José Antonio Meade, a highly skilled and seasoned technocrat associated with both PRI and PAN presidencies, is being held back by his association with the very unpopular incumbent President Enrique Peña Nieto. He is trying to cast himself as a PRI “sympathizer,” rather than as a party “militant” responsible for recent years’ weak performance.  To distance himself from his party’s image of electoral fraud, corruption, and crony capitalism, he has emphasized his commitment to transform the PRI.  The party is cooperating, framing him as a “citizen candidate.”

While candidates are immersed in the customary personal attacks against each other, violence appears to be playing into electoral politics with renewed intensity.  The Second Report of Political Violence in Mexico, prepared by the risk assessment firm Etellekt, documents 141 attacks against politicians and public servants since the start of the pre-campaign period last September.  Over 50 of these attacks have been assassinations of officials, incumbents, and candidates at all levels of government.  Violence is worst in Guerrero, Veracruz, the State of México, and Puebla, all states with significant organized crime.

Public insecurity is certain to join organized crime, corruption, inequality, and redistribution of income as central in the Mexican landscape as elections approach, and each candidate will pledge to make those issues his or her top priority.  As in other Latin American countries, the election also appears likely to signal the deepening discredit and low representation of the traditional party system.  Voters could very well select a candidate who, while not an outsider, presents him- or herself as committed to attacking the corruption of the major parties.  While running on a law-and-order slate, the candidates will also likely promise new approaches on the “war on drugs” that, led by both PAN and PRI, has devastated the country – with little or no prospect of avoiding the same pitfalls as predecessors.  Winning the election on July 1 will not be easy for any of the declared candidates; governing once in office will be even harder.

March 23, 2018

* Daniela Stevens is a Ph.D. candidate in Political Science in the School of Public Affairs at American University.

Mexico: Migrants Getting Political but Not Driving Reform

By Michael S. Danielson*

A large group of people gathers in an airport.

Returning Mexican migrants are greeted upon their arrival in Mexico by Mexican President Enrique Peña Nieto. / Presidencia de la República Mexicana / Flickr / Creative Commons

Mexican migrants who currently live in the United States or have returned home after spending many years abroad have become an important social and political constituency in the Mexican polity, but they do not uniformly enhance local democracy.  A growing body of research indicates that migrants affect the politics of their home towns and home countries through both direct and indirect channels.  Their departure releases pressure on prevailing authorities to reform, and the prospect of future migration causes citizens to disengage from the political process.  Friendships, alliances, and other contacts allow migrants to become intimately involved in their home communities from abroad as they communicate their attitudes and ideologies among themselves and friends and relatives back home.  Returning home with accumulated social, political, and economic capital also enables them to become influential leaders there.

  • Analysis of the municipalities to which U.S.-based migrants provide financial support, for example, shows that migrants are more likely to contribute where migrant civil society has become more deeply institutionalized at the state level and in municipalities and states with longer histories of migration.
  • A survey of more than 400 mayors in Oaxaca shows that migrants returning to their home communities who become mayors are more likely to be members of the popular classes than their non-migrant counterparts, suggesting that migration might be a pathway to power for non-elite individuals. But the same data also show that migrant mayors are just as likely to align with dominant political groups as with opponents of the status quo, suggesting the limits of their transformative and democratizing potential.

Field research shows different outcomes in different states.  In Oaxaca – where the exclusion of migrants from influence has alienated them from the governing party (an attitude further fueled by their experiences of exploitation and resistance as migrants in Mexico and California) – returnees tend to enter the political fray in opposition to dominant powers.  In contrast, the returning migrants who have been most influential in the states of Guanajuato and Zacatecas have tended to be mobilized by and act in support of the dominant parties in their states.  The institutionalization of the state-migrant relationship in these states facilitates migrant social and political engagement with governing parties.

  • Ethnographic data in 12 high-migration municipalities in Oaxaca, Guanajuato, and Zacatecas indicate, moreover, that the political engagement of returning migrants resulted in increased political competition that, in all but one case, caused factionalism and a divided opposition at best and deep, violent social conflict at worst. In the remaining six municipalities, dominant political actors either incorporated migrants into the prevailing system by establishing neocorporatist equilibria or successfully blocked the influence of migrant actors all together, despite high levels of migration.

Returning migrants’ political influence will only increase.  The historic flow – some 16 million Mexicans entered the United States in the 50 years since 1965 – has been reversed, as more migrants are returning to Mexico than entering the United States.  The economic, social, cultural, and political ties forged between communities on both sides of the border are growing, and the futures of the two countries are more intertwined than ever.  The economic and social importance of migration in some municipalities helps migrant political actors gain influence back home, and it can open up a pathway to local power for historically excluded social groups, even if – as in the cases that I have examinedthis influence has only rarely translated into fundamental changes in the way that politics are done.  The engagement of millions of Mexican migrants in their home towns has not resulted in thousands of political earthquakes, but rather the Mexican political system is incorporating these new actors without instituting fundamental changes to the way that politics are done.

 January 4, 2018

*Michael S. Danielson is CLALS Research Fellow and Visiting Professor at the University of California Washington DC Program.  His new book, Emigrants Get Political: Mexican Migrants Engage Their Home Towns, was published by Oxford University Press.  He has also participated in CLALS’ North America Research Initiative as a Pastor Scholar.

Canada and Mexico Face Uncertainty of NAFTA Renegotiation

By Daniela Stevens*

Two men stand at podiums with Mexican and Canadian flags behind them

Canadian Prime Minister Justin Trudeau gives a presentation with Mexican President Enrique Peña Nieto during an official visit to Mexico in October 2017. / Presidencia de la República Mexicana / Flickr / Creative Commons

Facing the growing possibility that the Trump Administration is walking away from the North America Free Trade Agreement (NAFTA), Mexico and Canada are beginning to look for trading partners beyond the United States.  The interdependencies binding the three are strong.  Both Mexico and Canada have deep commercial ties with the United States, which imports about 80 percent of Mexico’s exports and about 70 percent of Canada’s.  Both have significant leverage vis-à-vis the United States as well.  U.S. auto and agriculture industries have a major stake in free trade with Mexico, which also provides important cooperation on security issues and controlling Central American migration.  Liberalization measures within the energy sector by the current Mexican administration make Mexico a strategic partner in terms of energy security.  Canada buys about 19 percent of U.S. exports.

But these ties are fraying as conversations drag on.  Trump Administration proposals are hurting the talks; especially contentious are changes in the “rules of origin” (since the United States proposed increasing the U.S. content of autos to 85 percent from the current 62.5 percent) as well as the inclusion of a “sunset clause” that would make NAFTA expire unless it is renegotiated every five years.  NAFTA’s Article 2205 lets either of the three member countries announce its withdrawal from the accord with six months’ notice.  Canadian and Mexican trade officials have not given such notice yet, but they show signs of heading in that direction.  Both have held high-level meetings with counterparts from South America and Europe, according to official and non-government sources.

  • Mexican President Peña Nieto’s administration has expressed a preference for leaving the negotiations over accepting “a free trade agreement that ceases to promote free trade.” President Trump has said that his administration would be willing to negotiate a free trade agreement with Canada alone if the NAFTA talks fail.  However, Canadian Prime Minister Trudeau’s government has stated a preference for keeping the trilateral alive rather than resorting to bilateral agreement, since the terms of the U.S.-Canada deal were more outdated than the NAFTA’s.  The two presidents have been reluctant to take these actions because they apparently believe, as do many experts, that dismantling NAFTA would inevitably create uncertainty and inefficiencies for the three economies.  For example, the auto sector relies on three-way product flows that move several times across borders to be assembled into finished products.  Canadian and Mexican auto parts makers have a direct stake in each other’s dealings with the United States.  Even small duties would add up.
  • Nonetheless, some increased trade and a bilateral free trade agreement between just Mexico and Canada is possible. The two countries originally joined NAFTA to protect their access to the U.S. market, not to obtain access to each other’s.  Canadian public opinion and media reflect continued disinterest in Mexico, which is viewed as unstable due to drug-related criminality and corruption.  However, as the completion of a satisfactory NAFTA renegotiation is unlikely, Canadians are exploring deepening the bilateral link.  Mexican interest in Canada is also growing, according to some specialists.  Beyond North America, moreover, Canadians and Mexicans are exploring trade and investment diversification.  Canada is looking for increased cooperation with Latin America, in particular within the Pacific Alliance, a free trade partnership that includes Mexico, Chile, Peru and Colombia, and of which Canada is already Associate Member.  Mexico started a renegotiation last January of its free trade agreement with the European Union, which parties hope to finalize in the next few days.  It has begun warming up neglected ties with the Southern Cone and has already pledged to deepen ties with China.

Trade experts convened recently within the framework of American University’s Robert A. Pastor North America Research Initiative (NARI) were unanimous that that a trilateral agreement that protects the interests of all three partners would be the optimal outcome, but few observers of the NAFTA talks are confident that the Trump Administration will soften its position.  Canada’s commitment to a trilateral renegotiation should exert more pressure on the U.S. to compromise while strengthening both Canada and Mexico’s negotiating positions.  In the event of U.S. withdrawal from NAFTA, however, the two can expand their trade and investment relationship by lowering barriers further through modernization and e-commerce.  In addition, trade can potentially expand between the two since they have similar approaches to achieving various commitments of the Paris Accord involving energy projects and greenhouse gas emissions reductions.  Pastor Scholars concluded that both countries will have to carry out public campaigns to explain to their constituencies the benefits of continued cooperation, either trilateral or bilateral, if the United States significantly alters or abandons NAFTA.  Mexico and Canada have options outside North America in the quest for trade and investment diversification – even though their preferred scenario is a stronger NAFTA.  China, South America, and the European Union arise as the most readily available partners.

December 21, 2017

*Daniela Stevens is a Ph.D. Candidate in the American University School of Public Affairs and a Pastor Scholar.  Her research focuses on national and subnational policies that put a price on carbon emissions.

Trump’s Wall Funding Proposal Violates Conservative Principles

By Ezra Rosser*

A large border fence and the blue sky as seen from a street in California

A portion of the existing border fence between Mexico and the United States in California. / Rey Perezoso / Flickr / Creative Commons

More than two years after U.S. presidential candidate Donald Trump first boasted that he would “build a great, great wall on our southern border and … make Mexico pay for that wall,” his main proposal to fund it appears to remain blocking transnational remittances  – in contradiction of neoliberal capitalist principles he embraces.  In a letter that now-President Trump sent last month to U.S. House and Senate Leaders he said the border wall was necessary to protect “our national security and public safety” because the “porous southern border … is exploited by drug traffickers and criminal cartels.”  He was ambiguous, however, about who was going to pay for the wall, simply arguing that the country must “ensure funding for the southern border wall and associated infrastructure.”  Trump offered to make a deal to protect the Deferred Action for Childhood Arrivals (DACA) program – the “Dreamers” – only if Congress passed harsh immigration policies and funded the wall.

  • Under pressure during the campaign to explain how he would make Mexico pay for the wall, Trump claimed he could hold remittances sent by Mexican immigrants to family members in Mexico hostage until Mexico agreed to pay. President Obama noted at the time that the implications of ending immigrant remittances would be “enormous,” difficult to implement, and likely push more people to leave Mexico for the United States.  Senders would likely resort to informal channels, and Trump’s proposed selective taxation of money sent to Mexico would raise legal issues because of the discriminatory nature of such a program.
  • Trump has been quietly backing away from his repeated campaign promise to make Mexico pay. When Mexican President Peña Nieto told him in a phone call last January that “my position has been and will continue to be very firm saying that Mexico cannot pay for that wall,” Trump responded with much less bluster.  He noted simply that “you cannot say that to the press.  The press is going to go with that and I cannot live with that.”  This acknowledgement that the issue was largely about political optics suggested that Trump knew that, in the memorable words of former Mexican President Vicente Fox, Mexico was “not going to pay for that f***ing wall.”

Trump has not withdrawn, however, his threat to block remittances.  Such a policy would cause hardship for millions; most remittances are spent on basic necessities such as food.  But by undermining the free flow of capital, a core feature of our modern globalized world, Trump is also attacking a central component of neoliberal capitalism.  Trump also takes positions that reflect anti-globalization and protectionism – such as his characterization of NAFTA as the “the worst trade deal ever signed in the history of our country” and his claim that globalization “left millions of our workers with nothing but poverty and heartache” – but tying capital flows with labor flows would arguably turn the values of the global order on their head.

  • The notion that there is an imbalance in the treatment of workers and capital is ordinarily associated with the radical left. Harvard Law Professor Roberto Mangabeira Unger, for example, highlighted this imbalance in his 1998 book, Democracy Realized: The Progressive Alternative, in which he wrote, “The architects of the new world economic order have built a system in which capital and goods can roam the world while labor remains imprisoned in the nation-state or in blocs of relatively homogeneous nation-states.”  For Trump and other Republicans, linking remittances and immigration would normally be anathema.  If the U.S. Congress decides not to fund the wall, we may discover that taxing cash transfers may be an autocratic strategy that crosses ideological lines.

 November 27, 2017

* Ezra Rosser is Professor of Law at the Washington College of Law, where he has taught Property, Federal Indian Law, Poverty Law, Land Use, and Housing Law.

The Anticorruption Imperative for Latin America

By Matthew Taylor*

Bar graph showing accountability in Latin America

Graphic courtesy of author. For a larger version, please click here.

Latin America’s reactions to the massive transnational scandals involving the Brazilian construction giant Odebrecht and its subsidiary Braskem are an important sign of progress in anticorruption efforts.  But across the region, courts’ reluctance to challenge elites remains a major obstacle to deeper accountability.  Brazilian, Swiss, and U.S. authorities’ announcement in December 2016 of a multibillion dollar global corruption settlement with the Brazilian firms – valued at $3.5 to 4.5 billion – was remarkable for being the largest in history.  It was also shocking for its revelations: Odebrecht admitted using a variety of elaborate subterfuges to launder bribe payments and corrupt proceeds, including by setting up a bribe department and buying an offshore bank.  Graft allowed executives to rewrite laws in their own favor, and guaranteed that the right officials were in the right place when public contracts were up for bidding.  The firms netted $3.60 for every $1 they spent on bribes in Brazil, and admitted to paying $788 million in bribes across twelve countries, including ten in Latin America.

The political salience of the charges is roughly similar in all ten Latin countries, muddying the reputations of presidents or former presidents in Argentina, Colombia, the Dominican Republic, Peru, Panama, Venezuela and, of course, Brazil.  Ministers and high-level officials have been implicated in the remaining countries: Ecuador, Guatemala, and Mexico.  Nearly one year after the settlement, it is time to ask how well law enforcement and judicial processes are resolving the allegations against these high-powered public and private sector elites.

  • In a paper forthcoming in Daedalus, I argue that accountability can be thought of as the outcome of a basic equation – A = (T + O + S) * (E – D) – combining transparency (T), defined in its most essential sense as public access to information about the government’s work; oversight (O), meaning that government functions are susceptible to surveillance that gives public or private agents the right to intensively evaluate the government’s performance; and sanction (S), effectively punishing wrongdoing and establishing societal norms to their rightful place. These are tempered by institutional effectiveness (E) – understood as the outcome of state capacity, relevant laws and procedures, and citizen engagement – and political dominance (D), which diminishes the incentives for active oversight or energetic sanction.  The graph above uses a combination of data points from the World Justice Project to measure each of the five variables.
  • The comparison yields mixed findings. On average, the nations implicated in the Odebrecht settlement do quite well on transparency, effectiveness, and political dominance – the outcome of a generation of democratic rule (with Venezuela being the obvious outlier).  But all ten countries perform comparatively poorly when it comes to oversight, and abysmally when the criterion is sanction.  This does not bode well for accountability, especially if we consider that among the Odebrecht Latin Ten, the highest-scoring country on the sanction criteria is Argentina, whose score is still below the middle-income country average.  In Brazil, where trial courts have led the way in imposing sanctions on business elites, political leaders are nonetheless protected against meaningful sanctions by an arcane system of privileged standing in the high courts.

Latin American judicial systems – long rigged to protect local economic and political elites – remain the principal obstacle to accountability.  The Odebrecht settlement signaled that a new day has arrived: new international norms and law enforcement across multiple jurisdictions are likely to continue to upset the cozy arrangements that have protected the region’s elites from corruption revelations for decades.  But true accountability will only come when local courts and prosecutors are empowered to effectively punish corrupt elites.  That implies changes in legal procedure, new laws, and most importantly, political will.  Perhaps the Odebrecht case will galvanize domestic public opinion and mobilize policymakers about the need to improve local justice systems.  The enormous costs of corruption revealed by the Odebrecht settlement suggest that change cannot come soon enough.

November 6, 2017

* Matthew Taylor is Associate Professor at the School of International Service at American University.  His forthcoming article in Daedalus is entitled “Getting to Accountability: A Framework for Planning and Implementing Anticorruption Strategies.”

And the Winner is… Trump in Latin America

By Nicolás Comini*

Donald_Trump_and_Mauricio_Macri_in_the_Oval_Office,_April_27,_2017

U.S. President Trump and Argentine President Macri meet in the Oval Office. / Official White House Photo by Shealah Craighead / Wikimedia / Creative Commons

Criticism of U.S. President Donald Trump’s policies toward Latin America ranges from mild to furious in the region and among many U.S. Latin America watchers, but that anger is not likely to drive greater regional unity and demands for a more balanced relationship.  Trump’s rhetoric – emphasizing sovereignty, nationalism, and protectionism – have long been popular concepts in many countries of the region.  During Latin America’s recent “turn to the left,” for example, political leaders embraced a developmentalist emphasis on using tariffs and non-tariff trade barriers to give domestic industries an advantage in national economic expansion strategies.  But the U.S. President’s statements have generally infuriated not only the left as reflecting bias on an array of issues, such as immigration, but also the right.

  • Trump’s policies contradict the prescriptions that Washington has been advocating – and most conservative politicians have embraced – for Latin America for many years. Those prescriptions have emphasized free trade but touched on other issues as well, such as the shift (symbolic and material) of resources from traditional national defense to the “war on drugs.”  Trump’s “America First” approach undercuts his natural allies in Argentina, Brazil, Mexico, and elsewhere.  It has also given their leftist opponents a sense of legitimization of their anti-Americanism speeches, something that is surging also because of Washington’s new policies toward Cuba.
  • The U.S. summary abandonment of the Trans-Pacific Partnership (TPP), conservatives’ last great hope for deeper trade integration with the United States, left them angry. According to the ECLAC, 73 percent of all FDI in Latin America in 2016 came from the United States (20 percent) and the European Union (53 percent).  Individuals with strong anti-Communist credentials in Colombia, Chile, and Peru are all flirting with joining China’s Regional Comprehensive Economic Partnership (RCEP).

Regional organizations show no sign of providing leadership in how to respond to U.S. policy.  UNASUR is fading rapidly, in part, because it was labeled by the new conservative governments as too Bolivarian and anti-American.  Something similar is happening with the CELAC.  MERCOSUR is struggling, in part, because of the political tumult in Brazil.  Indeed, most governments are trying to remain friends with Washington, prioritizing bilateral agendas in detriment of regional (multilateral) institutions and mechanisms.

The surge in resentment toward Washington – within and among Latin American countries – is unlikely to lead to increased regional unity.  Internally, the left and right may agree that Trump is harming their interests, but their reasons are different and prescriptions for dealing with it are far apart.  On a regional basis as well, the current context accelerates the atomization of the region – and threatens to expand the bargaining power of the great powers of the United States, China, Germany, or Israel.  Although China is making inroads, in the end the United States has, and will retain, the greatest influence in Latin America – and the lack of efficient regional decision-making will prolong that situation.  Latin American fragmentation will create an image of acquiescence – and President Trump will think he is not doing so badly in the region.

October 18, 2017

* Nicolás Comini is Director of the Bachelor and Master Programs in International Relations at the Universidad del Salvador (Buenos Aires) and Professor at the New York University-Buenos Aires.  He was Research Fellow at CLALS.

Mexican Government Under Attack for Electronic Spying

By Fulton Armstrong

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Mexican President Enrique Peña Nieto. / Presidencia de la Republica Mexicana / Flickr / Creative Commons

Revelations of Mexico’s use of state-of-the-art software to spy on domestic critics and OAS human rights experts have dealt another devastating blow to the credibility of President Enrique Peña Nieto and the Mexican government.  Targeted in the cyberattacks were dozens of individuals and nongovernmental groups from various backgrounds, including leaders of the opposition PAN party investigating corruption allegations; anti-obesity activists lobbying for a tax on sweet carbonated soft drinks that the government opposed; and the Interdisciplinary Group of Independent Experts (GIEI) sent by the Inter-American Commission on Human Rights (IACHR) to investigate the disappearance of the 43 students in Iguala in 2014.

  • The software – known as Pegasus and estimated to cost between $32 million and $80 million – sent the targets personalized text messages with links that, when pressed, led to the total compromise of their smart phones. The messages falsely alerted victims to family emergencies, for example, and said further information was available at a link in the text.  Some purported to be from the U.S. Embassy, providing a link for updates on visa applications.  The link downloaded spyware that allowed the perpetrators full access to all voice and data communications and allowed remote control over the microphone and camera on the affected device.

Confronted with evidence developed by University of Toronto-based Citizen Lab and corroborated by the New York Times, Peña Nieto admitted in late June that his government purchased Pegasus but denied that it was used to target opponents and investigators.  He said that all of the government’s efforts have been “to maintain the internal security of the nation, fight organized crime, to generate security for all Mexicans.”  The Israeli company NSO Group, producer of Pegasus, claims it sells the software only to governments and only for specific anti-terrorism, anti-crime purposes.  The President threatened to investigate those who “have raised false accusations” – a statement his spokesman retracted several hours later – but he did acknowledge the need for an investigation.  The office of the Attorney General (PGR), which was involved in the Pegasus program, was charged with looking into the matter, drawing cries of foul from critics.

  • Officials at the UN Office of the High Commissioner on Human Rights have called on Mexico to allow a full investigation by independent experts. For the same agency that bought Pegasus to investigate its use, they said, was not credible.  An OAS official has stated publicly that the allegations “should be investigated.”

The internal spying scandal is yet another blow to the credibility of the Mexican government on human rights – whether the spying and harassment was approved by Peña Nieto or was the work of rogue agencies.  The President’s credibility has been battered by scandals involving his family and administration, and corruption by state governors from his ruling Institutional Revolutionary Party (PRI) has deepened perceptions of impunity at all levels.  Violence is also creeping back to levels experienced during the term of Peña Nieto’s predecessor, Felipe Calderón.  Among his most corrosive failures, however, has been the lack any progress investigating the brutal killing of the Iguala students.  The government’s claims that it was unable to bring anyone to justice for Iguala – while spending tens of millions of dollars to spy on and harass international experts investigating the incident – has deepened popular cynicism about the President.  Even if he accedes to an independent inquiry, the damage has been done, and he seems likely to limp, at best, toward general elections scheduled for mid-2018.  InSight Crime (a CLALS-sponsored foundation) has also called the scandal “a massive self-inflicted wound in [Mexico’s] fight against organized crime” because it compromised anti-crime operations and undermined the government’s credibility.

July 24, 2017

Mexico: Racing Against Trump’s Immigration Crackdown

By Carlos Díaz Barriga*

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Southwest border crossing. / U.S. Customs and Border Protection / Flickr / Creative Commons

U.S. President Donald Trump’s failure in his first 100 days to fulfill his most aggressive campaign promises affecting bilateral relations may have calmed nerves in Mexico, but the Peña Nieto Administration is moving ahead with efforts to mitigate the impact of thousands of returning immigrants.  Trump apparently has given up on making Mexico pay for his proposed border wall, and the U.S. Congress doesn’t want to foot the bill either.  He has also toned down his threats to pull out of NAFTA – “the worst trade deal ever” – and seems to be edging toward a more modest renegotiation.  But one pledge the Administration seems eager to meet is ramping up deportations of undocumented immigrants from Mexico.  Trump is not immediately deporting the millions of “bad hombres,” as he initially promised, but he is steadily deporting thousands, including many who do not have criminal records in the U.S.  There are even stories of Trump supporters shocked at the deportation of law-abiding and tax-paying business owners.  Moreover, while he assured Dreamers – youths brought to the United States as children – to “rest easy,” there are reports of U.S. immigration detaining some of these working and tax-paying youth.

The threat of mass deportations involving millions still looms large, and Trump’s unpredictability to settle on a course of action is increasing pressure on Mexican officials to act fast to mitigate the impact of the returning immigrants.

  • At its consulates in the United States, the government is actively helping those at risk of being deported, providing legal services to ensure due process in locales as far-ranging as Indianapolis and New Orleans. Foreign Minister Luis Videgaray continues to confidently declare that Mexico will fight for immigrants and stand up to U.S. immigration authorities.  (He has also cast it as a human rights issue, spurring accusations of hypocrisy from critics concerned about Mexico’s treatment of Central American migrants.)
  • President Peña Nieto has enacted a reform to the General Law of Public Education facilitating Dreamers’ entry into Mexico’s education system, accrediting their U.S. education and helping those without proper Mexican documentation. Critics have called his public appearance with deportees opportunistic, a ploy to get much-needed positive media coverage, but the measures like those in education have real benefit for returnees.
  • Specific industries in Mexico are looking for specialized workers in the returning immigrants. The Mexican Association of Armored Vehicles (AMBA) estimated the availability of 50,000 thousand jobs for deportees in the areas of private security, armored car manufacturing, and transportation of valuables.  As violent crimes have risen again in Mexico, this industry is in need of workers.  Call centers are also actively recruiting.  Their only requisite is fluency in English; no other experience is necessary.

Many Mexicans’ perception of Trump as unpredictable and erratic tempers any optimism about bilateral relations even though Foreign Minister Videgaray seems to have established a viable dialogue with Trump’s son-in-law, Jared Kushner.  The return of the deported immigrants is an area in which the government is being given a second opportunity to show compassion for citizens.  The migrants left Mexico for concrete reasons, however, and some are questioning whether Peña Nieto’s administration will be able to address them.  Providing legal assistance to those at risk of deportation and facilitating education for Dreamers are important gestures, but they do not offer a viable long-term strategy.  The bigger picture is still suddenly having millions of Mexicans back in the country with no job prospects.  Trump’s delays on the border wall and mass deportations give the Mexican government time to come up with effective solutions, but such a massive disruption, especially coupled with the uncertainty over the future of NAFTA and the Mexican economy, is probably too much for any government to handle.

May 12, 2017

* Carlos Díaz Barriga is a CLALS Graduate Fellow.