MCALLEN, Texas - Former US Ambassador to Mexico Antonio Garza was a special guest on a recent webinar hosted by the Rio Grande Valley Hispanic Chamber of Commerce.
Members of the Chamber wanted to know where Garza stood on the subject of US-Mexico relations, especially with a new administration in Mexico.
Garza, who is based in Mexico City, said that because he knew so many of those on the webinar follow Mexican affairs closely, he was only going to offer his remarks in bullet point fashion.
“I try to be objective and analytical about the challenges that they (Mexico) are facing. But I want to preface it by saying I remain very bullish on Mexico,” Garza said.
“I think that the base case for growth and the base case for things around nearshoring and investment that will impact Mexico, the (Rio Grande) Valley and certainly the state of Texas, remain intact, regardless of what the short and intermediate term challenges are facing the country and our two countries.”
Garza said that throughout our lifetimes and for some time to come, North America will remain “the most competitive platform upon which to build and invest.”
Every 12 years there is a “high level point” in the US-Mexico relationship because the presidential elections in both countries align. This year, he pointed out, is one of those years.
Garza said the conventional wisdom was that Mexico President Claudia Sheinbaum would very much be a “protege” of Andres Manuel Lopez Obrador and that one would see an extension of his policies for the next six years. He said it was no surprise that Sheinbaum won but what was a surprise was the super majorities the Morena party achieved in both the Mexican House and Senate. “You can see, essentially, that Mexico is a one party country,” Garza said.
If one looked at international press coverage heading into the election, Garza said, one would deduce that AMLO’s policies would remain intact and that there would be concerns about how open Mexico would be to investment.
“With that said, I will tell you, if you look at the last six years in the country… I would not have imagined when President Lopez Obrador was elected, that there would be some optimism around nearshoring.”
Garza said that has likely been most influenced by what is going on geopolitically in the rest of the world.
“But I also would not have imagined that you'd have a relatively sustainable Peso when he (Lopez Obrador) left. It was characterized as a Super Peso,” Garza said.
“I think it's actually backed off a little bit (and was) trading at 16 or 17 at the end of his administration. It's probably closer to 19 or 20 today, and I would not have imagined that the export platform for Mexico would be so strong.”
Garza said that although it is early into her administration, Sheinbaum deserves credit.
“I have to say she's been very shrewd and shown a political dexterity that is impressive because she both had to be respectful of her mentor and show some alignment, some continuity, with Lopez Obrador, while at the same time signaling that this was going to be very much her own presidency.”
Garza said the appointments Sheinbaum made when selecting her Cabinet have been impressive also.
“I think you can look at her administration and look to several key appointments and say she has done a good job of being, oh, how should I say this, respectful, if you will, of her predecessor and the relationship they enjoy, while at the same time signaling that this is going to be very much her own administration.”
Garza said that while there are some “troubling signs” he is generally encouraged. He referenced a dinner he went to with some business leaders from Monterrey at the time of Sheinbaum’s inauguration. He said such business leaders tend to be the most conservative. He said the feedback they gave him was that the inauguration was “a very encouraging day.”
Garza said there will be ups and downs in the US-Mexico relationship. “But, ultimately, I think the base case for Mexico trade in North America remains very strong now,” even if the challenges around security “remain very real.”
On the subject of security, Garza said the big multinationals do a “pretty good job, I think, of insulating themselves somewhat, mostly by the use of private security.”
As for immigration, Garza noted that the US is becoming an older country demographically. “So, the strength of the future of our economy is going to be tied to smart immigration.”
Garza ended his opening remarks by saying that international trade remains the “bright spot.”
He said: “It has just grown tremendously. Mexico is now the United States’ largest trading partner and has dethroned, if you will, China. And I don't see China climbing back to the top anytime soon, given the tensions around that relationship. So trade continues to be very strong.”
Garza said he remains bullish about Mexico in part because, “to a great extent Mexico is not entirely in control of their own destiny because of the level of integration with the United States economy.”
Garza concluded: “It remains a challenging time, but I will close with where I started. I remain bullish and optimistic.”
Editor’s Note: Here, below, is Ambassador Garza’s response to the first question posed at the RGVHCC webinar. It was posed by a chamber board member, Julian Alvarez.
