The landslide victory of Andrés Manuel López Obrador as Mexico’s new president is a big deal. He is an ardent leftist and a firebrand orator. His victory signals a shift in Mexico’s politics and signals a shift in global politics. It is a shift to the Left after years of drifting to the Right everywhere.
We do not know much about what will happen next, but it is entirely possible that Obrador will impact relations with Washington in a big way. NAFTA negotiations, which have been stalled for some time, could now take on a new urgency. Trump’s Wall probably has hit a new snag. Mexico will not pay for the creation of the border wall. With the US Congress opposed to paying the billions it will cost the chances of a wall being built have declined significantly. On top of all that, a solution of the migration problem will get no help from Mexico.
Meanwhile, the Mexican peso, which has been under downward pressure for weeks, has turned positive and seems to have begun an upward trend against the US dollar. The Obrador victory should keep a good upward wind for the currency. The economic numbers for the country remain mixed with little change in sight. Much will depend on the direction of the US economy, which has signaled some weakness of late.
All in all President Obrador will have a tough road ahead. Corruption and crime are just two problems that will hobble the new regime. Oil production and sales are a major impediment to economic growth, especially if US production continues to be strong and OPEC does not push higher output in a big way.
The election of Obrador is a good opportunity for Mexico to get its act together. But it is still unclear whether the newly minted president has the clout to enact his agenda of tough mindedness against crime and corruption and whether he will do better in relations with the US.