Wayne O'Leary

A New Wind Sweeps Mexico

Donald Trump, least religious of American presidents, is about to learn the hard way that, in the words of the Biblical proverb, you reap what you sow. In the process of absorbing his lesson, moreover, the Donald will in all likelihood unintentionally give the Western Hemisphere’s populist left a political victory and a sorely needed infusion of energy and encouragement. The result is apt to produce some well-deserved sleepless nights at the White House or Mar-a-Lago.

Several years of savage and insulting Trumpian rhetoric aimed at Mexico and Mexicans — that our freeloading southern neighbor is deliberately bent on undermining America’s economy, that its people are uncivilized rapists and murderers who deserve to be walled off (at their own expense) from our garden of Eden — have had the predictable effect. Mexico’s upcoming July 1 presidential election is widely expected to install a new leader as unabashedly nationalistic in his own way as Donald Trump. For Mexico, it’s an overdue development; for America’s hard-right Republican administration, it’s a self-induced headache.

Trump’s latent antichrist is Andrés Manuel López Obrador, familiarly known as AMLO, former mayor of Mexico City (2000-05) and candidate of the MORENA (Movement for National Regeneration) party, a breakaway faction of Mexico’s left-leaning PDR (Party of the Democratic Revolution) that Obrador founded in 2014 after an ideological dispute within the older progressive third party.

MORENA, mired at around 15-20 percent in pre-Trump preference polls, began to rise in inverse correlation to the nativist Trumpian takeover north of the border; it now commands a one-third favorability plurality among Mexican voters, displacing establishment parties like the governing PRI (Institutional Revolutionary Party), doomed by their leaders’ ill-considered attempts to temporize with Trump and ignore his provocations. At latest count (early May), MORENA’s standard bearer Obrador led his nearest center-right rival in a five-person presidential field by double digits, 48 to 30 percent.

Although it is the emotional linchpin, anti-Trumpism is by no means the only issue animating the Mexican electorate. There are concerns, for example, about graft and corruption in government featuring competing charges between the conservative PAN (National Action Party) and the centrist PRI beneficial to López Obrador, who has a reputation for incorruptibility. There is also AMLO’s controversial proposal to offer amnesty to low-level participants in the illegal drug trade; this has, however, failed to slow his surge in the polls.

Far more central to the campaign is Obrador’s economic populism, especially with respect to the question of Mexico’s oil industry and its disposition. Petroleum policy will be the elephant in the Mexican voting booth and the potential burr under Donald Trump’s saddle — to mix metaphors. Here, a little history is in order.

Obrador, should he win, will be the first genuine left-wing populist to ascend to Mexico’s presidency since Lázaro Cárdenas (1934-40), who ushered in the last phase of the three-decade Mexican Revolution and brought it to fruition. A revered figure often compared to Gandhi, Cárdenas instituted a far-reaching reform program consisting of collective land redistribution, modernized secular education, and worker-run economic cooperatives, all tied together by a federal system of public works (roads, dams, electrical grids) comparable to America’s New Deal. Carlos Fuentes, the country’s eminent novelist and public intellectual, summarized the results years later: “Above all,” he wrote, “Cárdenas ended Mexican feudalism.”

Cárdenas did something more, and here his populistic policies tie in with what may be in store for Donald Trump and the United States. A democratic socialist, Cárdenas nationalized Mexico’s British- and American-owned railroads in 1937 and then moved on to its similarly foreign-owned oil industry, which he expropriated in 1938 and likewise placed under government ownership. The March 18, 1938, seizure of the oil fields from 17 international companies, including Sinclair, Shell, and Standard Oil, on grounds of decades-long exploitation, was termed Mexico’s Declaration of Economic Independence and commemorated thereafter as a national holiday. The dispossessed American companies, despite being compensated, angrily demanded material restitution, but an unsympathetic FDR refused to dispatch the Marines.

There things stood until 2014, when Enrique Peña Nieto, current and latest in a string of market-oriented, free-trading presidents with corporate ties, denationalized Mexico’s oil industry, opening it to foreign investment and permitting the national oil company Pemex to engage in joint ventures with private interests.

Under this controversial constitutional change, opposed by consumer groups, labor unions, and the political left, US multinational oil firms are again exploring, drilling, laying pipelines, and selling their products in Mexico. ExxonMobil has already invested billions of dollars to develop offshore petroleum fields in Mexican territorial waters. Even as Peña Nieto, one of the most unpopular presidents in the country’s history, prepares to leave office in December 2018, his government is hurriedly holding auctions on coastal oil leases, having awarded 100 contracts to date.

Enter Peña Nieto’s nemesis López Obrador. Anti-globalist, critic of NAFTA, and fierce opponent of economic privatization, he is running the third time for president, having lost two close elections in 2006 and 2012 as candidate of the PRD. This time, reversing the free-market reforms of his predecessor will be AMLO’s top priority, starting with oil. Echoing Cárdenas’ nationalistic motto, “Mexico for the Mexicans,” he will attempt to guarantee that his country’s energy resources, once repatriated, never fall “back into the hands of foreigners.”

Obrador’s strategy is threefold: (1) an end to oil exports (most of which go to the US) by 2022; (2) construction of modern refineries to process domestic crude and end dependence on high-priced American gasoline; and (3) increased investment in hydroelectric power to replace imported natural gas from the US as an energy source.

All of this holds economic dangers for America’s energy companies and political dangers for Donald Trump. Big Oil’s refinery profits would be immediately impacted by the loss of its fourth-largest supplier of foreign oil, the source of 8% of America’s imported crude. Also jeopardized would be its Mexico-bound exports of gasoline and diesel fuel (one million barrels per day) and natural gas (4.5 billion cubic feet per day).

The direct threat posed to oil-company bottom lines by Mexico’s populist revolt will translate into rising prices for American consumers and then (if it’s truly “the economy, stupid”) into an existential threat to Trump and the Republicans at the ballot box. There’s another well-worn saying the Donald forgot: “What goes around comes around.”

Wayne O’Leary is a writer in Orono, Maine, specializing in political economy. He holds a doctorate in American history and is the author of two prizewinning books.

From The Progressive Populist, July 1-15, 2018

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