EU - Mexico relations - populism or democracy?

 
 
TL;DR: Mexico's new president, Claudia Sheinbaum, is expected to reshape Mexico's relationship with the EU. With the stalled EU-Mexico Global Agreement (GA) needing modernization, the EU should prioritize engaging Mexico to strengthen trade ties and counterbalance rising left-wing populism in the region. This is crucial for the EU's strategic goals as it seeks to expand its influence in Latin America. However, Sheinbaum's nationalist economic approach may create friction. To navigate these challenges, the EU should leverage shared interests in green initiatives and supply chain integration.
 
Mexico recently elected Claudia Sheinbaum as its first female president, set to take office on October 1st. With her election comes a significant opportunity to reset Mexico's diplomatic and economic relations with the EU, especially regarding the stalled modernization of the EU-Mexico Global Agreement (GA). While negotiations concluded in 2020, ratification has been on hold due to political challenges. Considering Mexico's pivotal role in the North and Latin American regions, this situation has created a diplomatic gap that the EU should urgently address.
 
One major point of contention between the EU and Mexico is the energy chapter in the GA. As a close ally of former president Andrés Manuel López Obrador (AMLO), Sheinbaum shares his nationalist economic views, which could limit foreign investments, particularly in the energy sector. However, her commitment to environmental issues might open the door to new areas of collaboration, such as green technology and renewable energy. This shift could offer an opportunity for the EU to promote sustainable development, create new investment avenues, and support the modernization of Mexico's energy policies.
 
The EU should also be mindful of a broader political trend—left-wing populism- gaining momentum in Mexico and across Latin America. Much like AMLO, Sheinbaum has tapped into nationalist rhetoric that may affect Mexico's openness to global trade and investment. For the EU, failing to address this trend could mean losing strategic ground in Mexico and the broader Latin American region. To counterbalance this influence, the EU must present a compelling case for a modernized agreement that addresses mutual concerns while strengthening Mexico's economic resilience.
 
Economically, Mexico is unique in Latin America due to its strong manufacturing sector, deep supply chain integration with the US and Canada, and increasing importance as a global export hub. The EU is Mexico's second-largest investor, and modernizing the GA could significantly boost European companies' competitiveness. For instance, German carmakers have already increased investments in Mexico, seeing it as a manufacturing hub for North America. Yet, recent disinvestment trends from countries like France, Italy, and Spain suggest that confidence in Mexico's political and economic stability may be wavering.
 
Conclusion: The EU has a strategic window to modernize its relationship with Mexico and counteract the rise of left-wing populism in the region. The EU can build stronger diplomatic ties and secure its position as a key partner by focusing on shared priorities, such as green energy and sustainable supply chains. However, this requires a proactive approach to address Sheinbaum's nationalist policies while demonstrating the tangible benefits of deeper integration. Ignoring these dynamics risks marginalizing the EU's influence and missing a crucial opportunity to shape the future of EU-Latin American relations.
 
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