LatinFinance - January/February 2017 - 17

Source: Reuters

REALITY VS SHOW: Donald Trump's policies are expected to diverge from campaign trail rhetoric

executive branch and Congress is going to play an important role."
He adds, though, that returning to the negotiating table may not
be all bad for Mexico. "The way to look at it - at least potentially - is
as an opportunity to address problems that were neglected by both
governments as they charged ahead with this free-trade framework."
Mexico has been a shrewd negotiator in the past. It slapped $2
billion of retaliatory tariffs onto US imports in 2009, after the US
blocked Mexican trucks coming into the country in contravention
of NAFTA. The new duties, dropped once the US agreed to advance
with the cross-border trucking program, were carefully targeted at
products important to the backers of the ban, according to Hogan
Lovells.
"We have very skilled and sophisticated negotiators on both sides
of the border," says Hardy. "Just as our trade people understand the
Mexican market, the Mexican trade representatives understand our
market and which industries really count on trade with Mexico."
Policy vs show
Yet the question remains: of Trump's rhetoric, what is going to
become reality? How to sift the bluster from an actual change in the

prevailing wind?
"My instinct is that we are likely to see a lot of symbolism and
theater," says Shifter. He points to Carrier Corporation's decision
to continue production of air conditioning units in the US. The
company reversed course on its plans to move a plant to Mexico after
discussions with the president-elect.
"It was a way to show that he was serious about what he said in the
campaign," says Shifter. "But a gesture is not a policy.
"Some underlying policy issues will probably change at the
margins. But there will be a heavy dose of symbolism to show
supporters that he's carrying out his promises."
Others expect more substantial changes.
"I do expect a policy shift," says the trade specialist. "I think they
will realize that these one-by-one interventions will show diminishing
returns, and they will want a policy shift. Some kind of revision or
renegotiation of NAFTA is unavoidable."
Yet the unpredictability of policy has real implications. Economists
have already cut their expectations for Mexico's economy this year,
saying a weaker peso, higher funding costs and tough fiscal targets
could constrain growth.
January/February 2017- L ATINFINA NCE.COM 17


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Table of Contents for the Digital Edition of LatinFinance - January/February 2017

Contents
LatinFinance - January/February 2017 - Cover1
LatinFinance - January/February 2017 - Cover2
LatinFinance - January/February 2017 - Contents
LatinFinance - January/February 2017 - 2
LatinFinance - January/February 2017 - 3
LatinFinance - January/February 2017 - 4
LatinFinance - January/February 2017 - 5
LatinFinance - January/February 2017 - 6
LatinFinance - January/February 2017 - 7
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