Would be Mexican president tackles low wages, jobs and corruption

WASHINGTON—The current leading contender for the presidency of Mexico next year, Andres Manuel Lopez Obrador, ducked a question about what he would do about the controversial U.S.-Canada-Mexico “free trade” pact, NAFTA, currently being renegotiated by the three nations.

Instead, Lopez Obrador said the solution to U.S.-Mexican problems is to eliminate endemic corruption south of the border, which would lead to job creation and wage increases for Mexican workers.

He also wants to create a special economic and industrial zone, with lower federal taxes on business, high investment and higher wages, within the first 20 miles south of the U.S.-Mexico border.

Lopez-Obrador commented just after the U.S., Canada and Mexico finished two rounds of “new NAFTA” talks, opened after GOP President Donald Trump decided to renegotiate the 23-year-old trade pact, rather than scrap it. The second was in Mexico City in late August.

Labor presented analyses showing NAFTA cost at least 770,000 high-paying U.S. industrial jobs to Mexico since 1993. Unions presented and testified for detailed recommenda-tions to strengthen NAFTA, including writing enforceable worker rights into its text, and raising Mexican wages through labor law enforcement there. Trump ignored most of them.

Lopez Obrador didn’t address NAFTA, despite a question about his stand, during his September 5 speech at the Woodrow Wilson Center in Washington, a leading think tank on international affairs. He said more than a century of corruption, since dictator Porfirio Diaz – who ruled from 1876-1911, is the source of Mexico’s problems. He promised to eliminate it.

“There is nothing that has done more damage to Mexico than the dishonesty of the people running the government. That is why we have the high rates of crime and other social ills that we have,” Lopez Obrador explained. “Putting an end to this corruption will allow Mexico to experience a rebirth.”

Much of the rest of his platform was progressive, including more funding for education, improved health care, expansion and modernization of Mexico’s oil industry – but under Mexican control – and using economic opportunity to solve the nation’s problems with guns and the drug cartels’ war. He also had some choice words about Trump.

Lopez Obrador is the current front-runner for the Mexican presidency, in elections next July 1 for the top job and for Congress. The Mexican president serves one 6-year term. Lopez Obrador ran twice before, but fraud cost him the presidency both times. Current President Enrique Pena Nieto, of the long-ruling Institutional Revolutionary Party (PRI), faces a badly split Congress, where no party has majorities in the Senate or the Chamber of Deputies.

Lopez Obrador left the PRI to form his own political party, Morena, dedicated to wiping out corruption.

Ending the corruption, plus “acting with asperity” in spending federal funds would free up money for economic development, which in turn would produce more jobs and higher wages, Lopez Obrador stated. That’s needed in Mexico, where an estimated 52 percent of people live in poverty, a rate virtually identical to when NAFTA took effect.

Mexico’s jobless rate is now around 3.5 percent, but more than half of all Mexican workers (57 percent) are in the informal economy.  And international data show the average employed Mexican earned $15,200 last year, one-fourth of average U.S. earnings.

Corruption played and plays a large part in holding Mexican wages and workers down, Lopez Obrador said, and it starts at the top “of the pyramid of power and of society.” The cleanup must start there, too, he added. That’s in contrast to Pena Nieto, who is very wealthy.

And even if he winds up with a split Congress after the election, Lopez Obrador says he can still battle corruption “because high values prevail among the common people” and because Mexico has excellent laws on the books but they haven’t been enforced.

“The skeptics ask how? It’s a matter of political will,” he stated. “If the president is honest, then the governors will have to be honest and it will be on down to the lowest levels. It’ll be like sweeping steps,” he added.  Other key points from his remarks and q-&-a:

• The free trade zone close to the U.S. border “will have tax incentives, lowering the value added tax from 16 percent to 8 percent, reducing the corporate income tax to 20 percent, and reducing fuel costs and electrical costs.” Businesses there will be pressured to have “wages go up and we’ll do this to keep people on the Mexican side of the border.”
• Mexican legislators will be barred from bargaining with local officials on details of projects, such as public works. “They go to mayors and governors and negotiate these projects and get bribes and sometimes ‘recommend’ the construction companies,” he said.
• Said “it was a mistake” for the governor of the Bank of Mexico “to get involved in the U.S. presidential election” by saying that if Trump won, “It would be like a Category 5 hurricane. We should have acted with more restraint.” Trump flew to Mexico City to meet Pena Nieto last year. But when Trump put the wall in his U.S. budget and demanded Mexico pay for it, Mexican politicians of all parties blasted him and Pena Nieto canceled a state visit.

“It was important to make clear our position” against the wall and against Trump’s anti-immigrant campaign. Mexico “should have spoken out immediately” and “not be degraded.” He called the wall “political propaganda…And there should be no wall and no use of force,” at the border.