China’s 'Period of Strategic Opportunity' in Mexico

Mexico's President Enrique Pena Nieto (L) shakes hands with China's President Xi Jinping during a welcoming ceremony at the Asia Pacific Economic Cooperation (APEC) summit at the International Convention Center at Yanqi Lake in Beijing

Beijing is looking to cash in on Trump's rhetoric against Mexico and NAFTA.

Indeed, despite renewed interest from China, and this relative low point in U.S.-Mexico affairs, the U.S. relationship is still focal point of Mexican foreign policy. Extensive trade-based, production-related, and people-to-people ties between Mexico and the United States bind the two economies—for better or worse. Mexican exports to the United States totaled over $302 billion in 2016, compared to $5.4 billion in Mexican exports to China, according to the Mexican Ministry of Economy. The sheer number of people of Mexican origin residing in the United States—over 33 million in 2013, according to the Pew Research Center—also generates valuable economic linkages.

With all of this in mind, the Peña Nieto administration has dedicated far more resources to renegotiating NAFTA than to exploring a possible free trade agreement (FTA) with the People’s Republic China. Beijing expressed continued interest in negotiating a trade pact with Mexico in July, but economic competition from China in Mexican and third markets limits FTA prospects. Even a feasibility study—a first step in the FTA process—has yet to materialize. Instead, Peña Nieto took time during his September visit to Hangzhou, China to stress the importance of NAFTA and the U.S.-Mexico relationship.

Slow progress thus far is rooted, to a considerable degree, in long-term structural challenges in the China-Mexico relationship. Whereas the trade imbalance is of issue for Mexico, China, too, is overcoming perceived obstacles. The 2014 cancellation of a high-profile rail deal in Querétaro was a near fatal blow to the relationship. After news surfaced that Mexico would revoke the train contract, numerous Chinese netizens took to the web to condemn the decision and caution against future dealings with Mexico.

Even so, Mexico’s ties to China are bound to gradually strengthen in the coming years. Mexican markets and resources are attractive to Chinese firms. And Beijing expects the Sino-Mexican relationship “to play an exemplary and leading role in building a community of shared future for China and Latin America.” Despite the obstacles, the possibility of Chinese “community-building” in Latin America is greater now than ever—especially if U.S. brinkmanship spells the end of NAFTA and other partnerships.

Margaret Myers is a China specialist and director of the Latin America and the World program at the Inter-American Dialogue in Washington, DC. Ricardo Barrios is program associate for the Dialogue’s Latin America and the World program.

Image: Reuters

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