Biden vs Trump: What Does It Mean for Mexico?By Alessa Flores | Wed, 11/04/2020 - 16:29
The US 2020 presidential election took place on Tuesday, Nov. 3, with current US President Donald Trump leading the Republican party and Joe Biden the Democratic party. As of now, Joe Biden has 243 electoral votes and Donald Trump 214, with nine states still pending final results.
Trump or Biden: How will it Affect Trade?
The US presidential election is important to the relationship between the US and its neighbors, including Mexico. One of the most recent issues that has defined trade policy between the two countries was the renegotiation of the new USMCA and its enforcement on July 1, 2020. For the government of President Andrés Manuel López Obrador, the treaty represents "a lever for the development and well-being of all Mexicans. The legal certainty and the new opportunities that the treaty will generate will contribute to a faster economic recovery from the effects caused by the current COVID-19 pandemic." USMCA is also expected to generate new areas of opportunity in North America for entrepreneurs, investors and consumers through regulations concerning digital trade, MSMEs, competitiveness, customs administration and trade.
Biden’s victory, as a new government, would mean uncertainty for Mexico. However, Biden explained in an interview with NY Post that "USMCA is better than NAFTA," for which he voted in 1993 as a senator and supported for more than 10 years. He also said that the treaty generated a large trade deficit with Mexico. “It is better than NAFTA. But look at what the overall trade policy has been, even with NAFTA? We now have this gigantic deficit in trade with Mexico. Not because NAFTA was not made better, because overall trade policy and how he deals with it made everything worse,” said Biden to NY Post.
President Trump has mentioned that during the next four years he wants to focus on implementing his America First platform, vowing to keep his promises to lower taxes, protect US borders, keep jobs in the country and renegotiate bad trade deals. Trump has highlighted that USMCA "is now a better treaty for the US.”
Mexico-US Economic Relationship
Overall, remittances to Mexico and exports to the US have grown. BBVA Mexico estimated that remittances to the country will reach US$39.5 billion in 2020, representing growth of 8.4 percent. Today, Mexico remains the US’ second-largest trading partner after China. In 2018, Mexico's exports to its northern neighbor grew by 3.5 percent to US$358 billion, making it the most dynamic among the US’ largest trading partners and surpassing Germany, Japan, Canada and China according to data from the US Census Bureau. Today, the bureau said that in September Mexico's exports to the US rose for the first time since the beginning of the COVID-19 pandemic at 1.06 percent.
There is little information on how the bilateral relationship between Mexico and the US would change if Biden wins. Biden has not made any statement on the future of the relationship between the two countries, but his proposals do touch on issues related to Mexico. If Biden wins, could López Obrador build such a good relationship with him and the US? According to an article in Excelsior, Biden and López Obrador already met on March 5, 2012, when Biden was Barack Obama's Vice President and López Obrador was running for the Mexican presidency for the second time. Morena's Senator Héctor Vasconcelos told Excelsior that "the meeting began with a touch of tension, but little by little it became very cordial.” He added that Biden was interested in López Obrador’s fight against corruption.
Biden's vision and discourse focuses on not going back to the way things were before, with the old structural weaknesses and inequities. "This is the time to imagine and build a new American economy for our families and the next generation," Biden explains on his official webpage. To this end, Biden seeks to create millions of good-paying jobs and give working families in the US the tools, options and freedom they need. Biden also suggested raising the minimum wage to US$15 so people "can live with dignity." Furthermore, he explained that if he wins, he will try to ensure that "the investments made in education guarantee the Latino community’s income and that their future is not determined by a zip code." In 2018, of a total of 60 million Hispanics living in the US, about 38.5 million were of Mexican origin, according to the Current Population Survey (CPS).