Newly elected Mexico president pledges to ‘reach understanding’ with Trump

MEXICO CITY  — Fresh off a landslide victory, Mexico’s newly elected leftist president Andres Manuel Lopez Obrador pledged Monday to “reach an understanding” with Donald Trump amid uncertain times for two countries that must seek consensus on everything from contentious trade talks to cooperation on security and migration.

During a half-hour telephone conversation, Trump said the two leaders discussed topics including border security, trade and the North American Free Trade Agreement, adding that “I think the relationship will be a very good one.”

In an interview with the Televisa news network, Lopez Obrador did not provide specifics on what an “understanding” with the Trump administration might look like, except to emphasize the need for mutual respect and cooperation between the two neighbors.

“We are conscious of the need to maintain good relations with the United States. We have a border of more than 3,000 kilometers, more than 12 million Mexicans live in the United States. It is our main economic-commercial partner,” he said.

“We are not going to fight. We are always going to seek for there to be an agreement. … We are going to extend our frank hand to seek a relation of friendship, I repeat, of cooperation with the United States.”

Meanwhile, members of the business and political elite who fiercely opposed Lopez Obrador’s populist candidacy pledged to support his presidency in a loyal opposition, and the largely orderly vote in which his rivals conceded defeat gracefully — and quickly — was hailed as a win for democracy in the country.

With nearly three-quarters of the ballots counted, Lopez Obrador had about 53 percent of the vote — the most for any presidential candidate since 1982, a time when the Institutional Revolutionary Party was in its 71-year domination of Mexican politics and ruling party victories were a given.

Rivals Ricardo Anaya and Jose Antonio Meade acknowledged Lopez Obrador’s win even before official results were announced, in a break from past elections. Lopez Obrador himself refused to accept his two previous presidential losses, and in 2006 his supporters set up a protest camp that caused months of chaos in downtown Mexico City.

Lopez Obrador, who rode a wave of popular anger over government corruption to become the first self-described leftist elected to the Mexican presidency in four decades, has pointedly sought to reassure his respect for the constitution, private property and individual rights, vowing there will be no expropriations even as he pushes to “eradicate” endemic corruption.

He announced a team of advisers that includes prominent businessman Alfonso Romo — a friend of telecom magnate Carlos Slim, one of the world’s wealthiest people — and widely respected politician Tatiana Clouthier, formerly a member of Anaya’s conservative party, apparently seeking to signal that nobody should fear his promise of “profound change.”

Business leaders who have openly warred with Lopez Obrador for years vowed to work with him and said fighting graft is an area where they see eye-to-eye.

“We have a lot in common as well as profound differences,” said Gustavo de Hoyos, president of the Mexican Employer’s Confederation, Coparmex. He added the private sector would defend recent initiatives, such as an energy reform bill that opened the sector to private investors under President Enrique Pena Nieto, “that have benefited competitiveness.”

Lopez Obrador previously vowed to throw the energy reform out but now says contracts merely will be reviewed for any illegalities. While his allies are forecast to likely dominate both houses of congress, he may not enjoy the two-thirds majority needed for outright reversal.

Mexico’s main stock index and the peso were both down Monday, but analysts at Banco Base attributed the currency’s drop to broader global movement in favor of the U.S. dollar and speculation about U.S. interest rates. Investors have long been expecting a victory by Lopez Obrador, who held double-digit leads in polls for months.

Prominent intellectual Enrique Krauze, who famously labeled Lopez Obrador a “tropical messiah” during his first presidential run in 2006, said via Twitter that he wishes “for his government to become an emblem of ethics for the world.”

The next president is unlike most of his predecessors in many ways: Devoutly religious, he is a career activist instead of a lawyer, military officer or businessman, and the first president in a century to speak in a marked regional accent, from his native Tabasco state in Mexico’s tropical lowlands.

Lopez Obrador plans to eschew the presidential mansion tucked into Mexico City’s verdant Chapultepec park, preferring to remain at his modest home on the capital’s south side and working from offices in the colonial National Palace downtown.

He also plans to tour the country without secret service protection, and to dissolve the guard corps that has protected presidents since 1926.

Lopez Obrador arrived at a hotel in downtown Mexico City for the first of two victory speeches Sunday night in a bland white sedan befitting the “man of the people” image he has projected for over a decade.

He left in a decidedly more presidential luxury SUV — though he rolled down the windows to wave to adoring supporters — underscoring that the man who spent the last 12 years as a persistent government critic from outside the halls of power must now govern amid considerable challenges for the country, and deliver on ambitious but vaguely outlined campaign promises.

Voters will expect him to put into concrete action his anti-corruption agenda, reign in rising killings and cartel violence that have stubbornly resisted the efforts of his two predecessors, and revive a sluggish economy that grew just 2.1 percent last year.

Commonly known by his initials, “AMLO,” Lopez Obrador has proposed measures like a huge increase in infrastructure spending, but it’s not clear how he can do that if he fulfills a promise not to raise taxes.

Lopez Obrador won thanks to overwhelming anger at the status quo and his success at presenting himself as an agent of change. But he’s been frustratingly vague on how he’ll go about it.

“I think what happens now is Mexico begins to look for signs of what an AMLO presidency means, because we don’t know right now,” said Shannon O’Neil, senior fellow for Latin America studies at the Council on Foreign Relations. “What are the signals that he sends out to markets, to his political opponents, to Mexican society generally, of what he’ll actually do when he comes into office?”

Lopez Obrador has been compared to Trump for his populist, nationalist rhetoric and sometimes touchy personality — as well as his past skepticism about NAFTA. But he now supports reaching an agreement with the United States and Canada, though talks have been stalled over Trump administration demands for higher U.S. content and a “sunset clause” in the 1994 trade agreement.

US Commerce Secretary Wilbur Ross told CNBC that Mexico “needs some sort of an arrangement” given its dependence on American consumers and businesses, having shipped $314 billion in goods to the United States last year. Beyond that, Ross said it was unclear whether Mexico’s incoming president would either bring in new negotiators or set a different agenda.

“It’s really a question of when the talks resume,” Ross said.

Compared with his predecessors, Lopez Obrador is likely to be more focused on domestic economic issues than on settling trade issues with the United States, O’Neil said. This may mean that any future negotiations are unlikely to shift the focus.

“They will inherit the talks where they are — currently at a standstill, largely given US recalcitrance to compromise with its neighbors,” she said, noting that Mexico has imposed its own retaliatory tariffs and the new administration would likely follow the same approach.
Lopez Obrador said he will propose that his own experts be included in the talks, but will respect Mexico’s current negotiating team as they continue to represent Mexico until he takes office Dec. 1.