Summer 2020 is nearly at an end, without many of the vacations and festivities that usually characterize this time of year.
Over the past months, our lives have been transformed by the COVID-19 pandemic and its destructive economic consequences. With so many changes, we at White & Case are committed to helping our clients manage any business impact that may arise.
In 75 days, we’ll be casting our votes in the November presidential election. This past Sunday, the Dallas Morning News published my thoughts on how we should craft our foreign policy toward Latin America in the coming years. I believe that the United States should take this moment and commit to a principled and forward-looking policy that reflects the region’s critical importance.
This includes strengthening democratic governance and anti-corruption efforts, increased economic prosperity and integration, and unequivocal support for human rights. And Mexico should be at the forefront of any U.S. foreign policy, given its strategic importance to the United States.
I also wrote a recent piece for Brink on the importance of the U.S.-Mexico Canada Trade Agreement (USMCA). I outline my belief that the trade agreement is not the silver bullet for establishing immediate regional economic stability and prosperity. However, it is a major regional achievement and another bet that North America makes on itself for a stronger economic future. If these topics are of interest to you, I would also recommend my discussion with Bloomberg’s David Westin on why the USMCA is more of a relief than a celebration.
Even during these slower summer days, there have been a number of significant regional events.
The ongoing Covid-19 pandemic continues to spread across North America. The United States reports more than 5,000,000 cases—the most in the world—and 169,000 deaths. While the number of new cases has slipped slightly from the mid-July peak, it’s still at one of the pandemic’s highest levels. Mexico has also reported more than 520,000 confirmed cases, 56,000 deaths, and half of the country’s states continue to only allow essential activities.
However, while the United States and other countries have pumped money into their economies during the global health crisis, Mexico has largely rejected these counter-cyclical responses. The government did direct $10 billion toward the poorest citizens but has avoided any support for companies or workers and promoted deep public sector spending cuts. The country’s economy is expected to contract by 10 percent this year with a slow recovery. On Monday, López Obrador announced that he will present his economic recovery plan in two weeks.
Mexico’s energy sector continues to be redefined as President Andrés Manuel López Obrador moves to regain state control over the country’s oil and electricity sectors. In a July 22, 2020 memorandum directed at state agencies, López Obrador outlined his desire to rescue the state owned oil and electricity companies, Pemex and CFE, as they struggle with crushing debt. The memorandum suggested that even constitutional changes could be on the table, likely undoing much of the 2013 energy reform that opened the country’s energy sector to greater private investment.
High-profile corruption stories have also grabbed headlines in Mexico. This past month, Mexican federal prosecutors extradited Emilio Loyoza—who served as the head of Pemex from 2012 to 2016—from Spain to face bribery and money laundering charges. Since returning to Mexico, Lozoya has testified that he disbursed US$5 million to foreign consultants working on former President Enrique Peña Nieto’s 2012 presidential campaign, and has gone as far as to implicate Peña Nieto in the case.
I hope you are all staying safe and healthy. I look forward to connecting with many of you via Twitter, LinkedIn, and Facebook. And of course, you can contact me directly here at White & Case in Mexico City.
Sincerely,
Antonio Garza