Friendship interrupted:
Walls and trade wars: What the US and Mexico can ask from each-other….and what they can’t
In this new North American conflict, Mexico and the Mexicans have to thread very carefully not to mix affronts. The US has all the right to spend 40 billion dollars on an infrastructure project within its territory (the so-called “wall” that already exists is sometimes miles inland). Mexicans may not like it, but they have no standing to fight against it.
What is more; the lack of capacity of Mexico to bring order against organized crime within its borders makes this a complicated argument that they probably cannot win.
What the US cannot do within the context of international law, but also within the context of dealing with its second most important ally and a good friend is to bully it to pay for that infrastructure. Trying to collect payments like this has been in the past a casus belli and it is how we treat our worst enemies, not our biggest partners and allies.
So, Mexico may not like the “symbolic” nature of the wall (for good reasons) but it has little to say about its construction. What Mexico has the right to defend against, through all the mechanisms available, is the imposition of a budgetary burden by a neighbor, just because that neighbor is stronger.
Finally, one thing should be clear. The President may have the power to take the country out of NAFTA (although the courts have not given clear guidance about if he needs to consult the Senate or not) but the USA cannot impose a 20% tariff without breaking WTO rules. Mexico could not only retaliate with tariffs (as they have done in the past) effectively starting a very nasty trade war at a time China is courting Mexico but could file a complaint against the USA. If the White House wants to ignore a WTO ruling, it would be opening pandora’s box as this would remove all protections that allow for American business to do business abroad.
TL;DR:
In this decoupling of the North American alliance to come:
A) Mexico has very little to say if the US wants to build any infrastructure in its territory.
B) Mexico has actually little to say about the enforcement of immigration rules against Mexican nationals living in the USA without a legal immigration status, other than defending their human rights through the American court system.
C) The US cannot legally, and it is a strategic blunder, to force a neighbor and friend to foot the bill for this infrastructure without a common agreement.
D) To punish Mexico for not bowing to US border policy with a 20% tariff, the USA would also need to abandon WTO protections for its companies abroad. It should also expect reciprocal tariffs.
Most importantly, a North American trade war is one of the biggest threats to American homeland security ever witnessed. Part of the security “bonus” of the USA (when compared to European countries or Russia or China) has been the protection of two oceans, and two friendly neighbors. This friendship has been one of the US biggest security assets during times of conflict.
