Mexico eyes border, migration as leverage in talks with Trump

[December 28, 2016]  By Dave Graham

MEXICO CITY (Reuters) - Mexico aims to defend free trade with the United States by using border security and immigration policy to gain leverage in talks with U.S. President-elect Donald Trump after he takes office next month, senior officials say.

To defuse Trump's threats to disrupt trade and investment, policymakers say Mexico aims to strike a balance between hearing out his concerns over illegal immigration and U.S. jobs, and adopting a firm posture to protect its own economic interests.

Mexico wants security, immigration and management of the U.S.-Mexican border to be on the table alongside trade when it sits down to talk to the Trump administration, a person familiar with the government's thinking said, speaking on condition of anonymity.

That could translate into Mexico offering to reinforce its northern border to curb drug smuggling and migrants, said one former high-level official familiar with discussions in Mexico.

It might also mean giving the United States a bigger part to play in securing Mexico's southern border with Guatemala, where many thousands of illegal immigrants from the rest of Latin America pass through every year on their way to the United States, a senior Mexican government official said.

After Trump's inauguration on Jan. 20, Mexico needs to keep the discussion with Washington as broad as possible, said Victor Giorgana, a congressman in President Enrique Pena Nieto's Institutional Revolutionary Party, or PRI.

"It can't just be about one issue, as that would put us at a disadvantage," said Giorgana, who chairs the lower house foreign relations committee.

Trump outraged Mexico during the campaign by accusing it of sending rapists and drug runners north, and by vowing to make it pay for a border wall to keep out illegal immigrants.

Though bilateral discussions with Trump's team are already under way via informal channels, it is still unclear exactly what stance the Republican will take as president.

No date has been set for formal talks, but Mexico's government has signaled its readiness to engage with Trump.

NAFTA WORRY

Mexico's main economic worry is the North American Free Trade Agreement (NAFTA) between the United States, Mexico and Canada that underpins the bulk of foreign direct investment.

Trump has threatened to scrap NAFTA if he cannot rework it to his advantage.

Mexico has said it could consider adding new chapters to the agreement covering issues such as labor standards to mollify U.S. trade unions anxious about cheaper Mexican workers.

But with Mexico the No. 1 or No. 2 export market for almost half of the 50 U.S. states, there is widespread confidence the essence of the accord will be upheld.

"At the end of the day it's clear that the amount of U.S. investment in Mexico based on NAFTA will prevail," said Andres Rozental, a former deputy foreign minister involved in ongoing bilateral discussions between top executives over trade.

Republican presidential nominee Donald Trump and Mexico's President Enrique Pena Nieto arrive for a press conference at the Los Pinos residence in Mexico City, Mexico, August 31, 2016. REUTERS/Henry Romero

Senior Mexican officials believe U.S. business leaders and politicians understand how closely integrated the neighboring economies are today, and can persuade Trump not to seriously endanger $500 billion in bilateral annual trade.

Failing that, Mexican lawmakers point to issues including their country's commitment to helping combat a growing heroin problem - U.S. deaths from use of the drug rose by a fifth to almost 13,000 in 2015 - as well as its increasing efforts to tackle illegal immigration as potential bargaining chips.

Deportations of illegal immigrants from Mexico have surged under Pena Nieto, with the 181,163 in 2015 more than double the number expelled during 2012, his predecessor's final year.

Among the many thousands Mexico had to process were Africans, Asians, Arabs, Central Americans, South Americans as well as the "latent risk of terrorists", said Enrique Jackson, deputy leader of the PRI in the lower house of Congress.

"These people are trying to enter U.S. territory. So it's a shared issue. At some point these things must be put on the table, and they have to open their eyes."

To help deal with Trump, Pena Nieto is seeking a role for one of his most trusted aides, former finance minister Luis Videgaray, according to three people familiar with talks.

Videgaray masterminded Trump's hastily arranged meeting with Pena Nieto in Mexico City in August, which was a public relations disaster for the president, and caused frictions in the cabinet. Videgaray stood down a week later.

But Videgaray is respected among leading U.S. defenders of the bilateral trade relationship, and even some domestic critics privately say he could be an important bridge-builder.

For this reason, he could soon be appointed foreign minister, according to the three people. A presidential spokesman described the notion as "rumors".

(Additional reporting by Ana Isabel Martinez; Editing by Alistair Bell and Dale Hudson)

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