Bad Blood: Biden Fires First Shots in Trade War With Mexico

The Biden administration is firing the first shot in a potential trade war against Mexico. Bad blood was bound to surface at some point, with our southern neighbor being led by a president who is an admirer of Fidel Castro and Hugo Chavez. Citing government control over Mexico’s utility and oil industries, President Biden’s trade representative, Katherine Tai, is saying today that the government of President Lopez Obrador is violating the United States-Mexico-Canada Agreement. Washington is calling for a dispute settlement in a process that could lead to the imposition of tariffs. The rift between Mr. Lopez Obrador and America started before the Mexican leader’s visit in late June to the White House. In the spring, for one, the populist-left Mexican president declined to attend the Summit of the Americas, where Mr. Biden was to unveil his policies for the hemisphere.Widely known by his initials AMLO, the Mexican president cited the absence of the Cuban, Venezuelan, and Nicaraguan heads of states in saying that if America didn’t invite those non-democratic leaders, he would not go either.Later, as he was departing for his Washington meeting with Mr. Biden, Mr. Lopez Obrador vowed to chide his host over the extradition of a suspected spy, Julian Assange. At home, meanwhile, Mr. Lopez Obrador is trying to return Mexico “to the days when the government did everything,” a business consultant and former Mexican deputy foreign minister, Andres Rosental, told the Sun. AMLO, he adds, believes that “the state is better at handling business than what the economy requires.”Earlier this month Mr. Lopez Obrador decreed that a trusted navy admiral would seize control of the capital’s troubled international airport, AICM. Worse, Mr. Lopez Obrador is favoring government-owned entities in pushing out American and other foreign investors in Mexico’s energy market, as was cited by Ms. Tai. The Comision Federal de Electricidad, or CFE, is taking over the Mexican electricity grid, and government-owned Petróleos Mexicanos, known as Pemex, is monopolizing the oil industry.“We have repeatedly expressed serious concerns about a series of changes in Mexico’s energy policies and their consistency with Mexico’s commitments under the USMCA,” Ms. Tai said. In 2013 Mexico amended its constitution to end CFE and Pemex’s exclusive control over the energy sector. Much to the relief of Mexican economists, American companies and other foreign investors entered the market. Yet, AMLO has slowly reversed these reforms since he took office in 2018, allowing government monopolies to again dominate the Mexican economy. All the while, Mr. Lopez Obrador, who had been a frequent visitor to Havana prior to his presidency, found ways to bash America and clash with the Biden administration.When a top drug lord, Rafael Caro Quintero, was captured last week in the state of Sinaloa, AMLO announced that the American Drug Enforcement Agency had nothing to do with the bust. Never mind that Caro, known as “narco of narcos,” had topped the DEA’s most-wanted list since his infamous role in the 1985 torture and killing of a one of its top agents at Mexico, Kiki Camarena. That episode became infamous as perhaps the most gory tale in the bloody history of the Mexican-American war on drugs.Caro was caught shortly after that notorious event and was sentenced to 28 years in prison. Yet, in 2013 he was released on a dubious judicial technicality. The DEA put a $20 million prize on his head.Mr. Lopez Obrador denied that the DEA was involved in Caro’s recapture, saying that he only knew about it after the arrest. The denial could raise eyebrows in Washington, where an extradition request is already being prepared. Today’s energy complaint was filed with an arbitration mechanism that was built when the USMCA was negotiated during the Trump presidency. With it, Washington is signaling that it has had it with Mr. Lopez Obrador’s antics. Yet, the Biden administration itself may have enabled the Mexican president.As Mr. Lopez-Obrador announced his intent to push out foreign investors from the energy market earlier this year, the American ambassador at Mexico City, Ken Salazar, stood next to him in a press conference. AMLO was “right” to seek changes to the 2013 constitutional reforms, Mr. Salazar said, as the powerful Wall Street Journal columnist, Mary Anastasia O’Grady, reported at the time. A former Colorado senator, Mr. Salazar was sent to Mexico City after serving in Mr. Biden’s 2020 election campaign. Earlier this month the New York Times cited Washington officials saying that as ambassador, Mr. Salazar seems to “contradict his own government’s policies in the interest of aligning himself with” Mr. Lopez Obrador. On Monday the State Department’s spokesman, Ned Price, denied the Times’s report, saying Mr. Salazar is an “outstanding ambassador who represents the interests of the American people.”Yet, as America starts cooling on AMLO, Mr. Biden may want to rethink whether his top envoy should remain at Mexico City. Mr. Salazar, after all, is reportedly overly enamored with a populist-socialist who rails against America, our business executives, and our law enforcement agents, and who abhors an economic model that benefits America and Mexico.

Bad Blood: Biden Fires First Shots in Trade War With Mexico

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