Beating His Own Head Against the Wall

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Trump threatens to do exactly what Chuck Schumer wants.

By The Editorial Board. Tha Wall Street Journal

Donald Trump is sore at Senate Majority Leader Mitch McConnell for saying recently that the President sometimes has “excessive expectations” for Congress. But Mr. Trump proved Mr. McConnell right Tuesday when he told a rally in Phoenix that he’s willing to shut down the federal government this autumn to get funding for his border wall with Mexico.

“We’re going to get our wall,” Mr. Trump said. “If we have to close down our government, we’re building that wall.”

The crowd loved it, but this is the political equivalent of holding a gun to his own head and saying that if Congress doesn’t do what he wants Mr. Trump will shoot himself. Don’t expect Senate Democratic leader Chuck Schumer to try to talk Mr. Trump out of it. As the minority party, Democrats will be only to happy to test Mr. Trump’s dare since voters will blame a shutdown on Republicans who run both ends of Pennsylvania Avenue. Senate Democrats are vowing not to spend a dime on the wall and Mr. Trump will need 60 Senate votes to pass a funding bill.

GOP leaders on Capitol Hill know they’ll take the political blame for a shutdown, so they don’t want to press wall funding too far. All the more so because the border wall isn’t all that popular even with Republican voters, who have higher priorities like tax reform and a more robust military.

With an approval rating well under 40%, Mr. Trump isn’t in a strong political position to win a fight with Congress unless he is pressing for something that is already popular. It’s never clear with Mr. Trump how much of his rhetoric is real or bluster, but the shutdown over the wall is one threat he’d be wise to abandon.

Your Editor Notes: This is NOT The New York Times NOR -The Washington Post . It’s the Wall Street Journal

Mexico’s Revenge

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By antagonizing the U.S.’s neighbor to the south, Donald Trump has made the classic bully’s error: He has underestimated his victim.

 

By Franklin Foer.

When Donald Trump first made sport of thumping Mexico—when he accused America’s neighbor of exporting rapists and “bad hombres,” when he deemed the country such a threat that it should be contained by a wall and so clueless that it could be suckered into paying for its own encasement—its president responded with strange equilibrium. Enrique Peña Nieto treated the humiliation like a meteorological disturbance. Relations with the United States would soon return to normal, if only he grinned his way through the painful episode.

In August, Peña Nieto invited Trump to Mexico City, based on the then-contrarian notion that Trump might actually become president. Instead of branding Trump a toxic threat to Mexico’s well-being, he lavished the Republican nominee with legitimacy. Peña Nieto paid a severe, perhaps mortal, reputational cost for his magnanimity. Before the meeting, former President Vicente Fox had warned Peña Nieto that if he went soft on Trump, history would remember him as a “traitor.” In the months following the meeting, his approval rating plummeted, falling as low as 12 percent in one poll—which put his popularity on par with Trump’s own popularity among Mexicans.

The political lesson was clear enough: No Mexican leader could abide Trump’s imprecations and hope to thrive. Since then, the Mexican political elite has begun to ponder retaliatory measures that would reassert the country’s dignity, and perhaps even cause the Trump administration to reverse its hostile course. With a presidential election in just over a year—and Peña Nieto prevented by term limits from running again—vehement responses to Trump are considered an electoral necessity. Memos outlining policies that could wound the United States have begun flying around Mexico City. These show that Trump has committed the bully’s error of underestimating the target of his gibes. As it turns out, Mexico could hurt the United States very badly.

The Mexico–U.S. border is long, but the history of close cooperation across it is short. As recently as the 1980s, the countries barely contained their feelings of mutual contempt. Mexico didn’t care for the United States’ anticommunist policy in Central America, especially its support of Nicaraguan rebels. In 1983, President Miguel de la Madrid obliquely warned the Reagan administration against “shows of force which threaten to touch off a conflagration.” Relations further unraveled following the murder of the DEA agent Enrique “Kiki” Camarena in 1985. Former Mexican police officers aided drug traffickers who kidnapped and mercilessly tortured Camarena, drilling a hole in his skull and leaving his corpse in the Michoacán countryside. The Reagan administration reacted with fury at what it perceived as Mexican indifference to Camarena’s disappearance, all but shutting down the border for about a week. The episode seemed a return to the fraught days of the 1920s, when Calvin Coolidge’s administration derided “Soviet Mexico” and Hearst newspapers ginned up pretexts for a U.S. invasion.

What Mexican analysts have called the “China card” is an extreme retaliatory option.

The grandiose promise of trade is that it binds countries together, breeding peace and cooperation. This is a risible overstatement when applied generally to the world. But in the case of the countries separated by the Rio Grande, it has proved wondrously true. A generation after the signing of the North American Free Trade Agreement, the United States and Mexico couldn’t be more interdependent. Anti-Americanism, once a staple of Mexican politics, has largely faded. The flow of migrants from Mexico to the U.S. has, more or less, abated. Economic ties have fostered greater intimacy between intelligence services and security agencies, which are today deeply enmeshed in each other’s business. While the economic benefits of nafta are less impressive than the architects of the deal promised, the geostrategic benefits of integration are far more important than anyone could have anticipated. But the Trump administration has come dangerously close to trashing the relationship—and, in the process, unleashing a terrifying new reality.

Once the threat of Soviet expansion into the Western Hemisphere vanished, the United States paid less-careful attention to Latin America. It passively ceded vast markets to the Chinese, who were hunting for natural resources to feed their sprouting factories and build their metropolises. The Chinese invested heavily in places like Peru, Brazil, and Venezuela, discreetly flexing soft power as they funded new roads, refineries, and railways. From 2000 to 2013, China’s bilateral trade with Latin America increased by 2,300 percent, according to one calculation. A raft of recently inked deals forms the architecture for China to double its annual trade with the region, to $500 billion, by the middle of the next decade. Mexico, however, has remained a grand exception to this grand strategy. China has had many reasons for its restrained approach in Mexico, including the fact that Mexico lacks most of the export commodities that have attracted China to other Latin American countries. But Mexico also happens to be the one spot in Latin America where the United States would respond with alarm to a heavy Chinese presence.

That sort of alarm is just the thing some Mexicans would now like to provoke. What Mexican analysts have called the “China card”—a threat to align with America’s greatest competitor—is an extreme retaliatory option. Former Mexican Foreign Minister Jorge Castañeda told me he considers it an implausible expression of “machismo.” Unfortunately, Trump has elevated machismo to foreign-policy doctrine, making it far more likely that other countries will embrace the same ethos in response. And while a tighter Chinese–Mexican relationship would fly in the face of recent economic history, Trump may have already set it in motion.

The painful early days of the Trump administration have reminded Mexico of a core economic weakness: The country depends far too heavily on the American market. “Mexico is realizing that it has been overexposed to the U.S., and it’s now trying to hedge its bets,” says Kevin Gallagher, an economist at Boston University who specializes in Latin America. “Any country where 80 percent of exports go to the U.S., it’s a danger.” Even with a friendly American president, Mexico would be looking to loosen its economic tether to its neighbor. The presence of Trump, with his brusque talk of tariffs and promises of economic nationalism, makes that an urgent task.

Until recently, a Mexican–Chinese rapprochement would have been unthinkable. Mexico has long steered clear of China, greeting even limited Chinese interest in the country with wariness. It rightly considered China its primary competition for American consumers. Immediately after nafta went into effect in 1994, the Mexican economy enjoyed a boom in trade and investment. (A flourishing U.S. economy and an inevitable turn in Mexico’s business cycle helped account for these years of growth too.) Then, in 2001, the World Trade Organization admitted China, propelling the country further into the global economy. Many Mexican factories could no longer compete; jobs disappeared practically overnight.

Mexico’s hesitance to do business with the Chinese was also a tribute to the country’s relationship with the “Yanquis.” A former Mexican government official told me that Barack Obama’s administration urged his country to steer clear of Chinese investment in energy and infrastructure projects. These conversations were a prologue to the government’s decision to scuttle a $3.7 billion contract with a Chinese-led consortium to build a bullet train linking Mexico City with Querétaro, a booming industrial center. The cancellation was a fairly selfless gesture, considering the sorry state of Mexican infrastructure, and it certainly displeased the Chinese.

But China has played the long game, and its patience has proved farsighted. The reason so many Chinese are ascending to the middle class is that wages have tripled over the past decade. The average hourly wage in Chinese manufacturing is now $3.60. Over that same period of time, hourly manufacturing wages in Mexico have fallen to $2.10. Even taking into account the extraordinary productivity of Chinese factories—not to mention the expense that comes with Mexico’s far greater fidelity to the rules of international trade—Mexico increasingly looks like a sensible place for Chinese firms to set up shop, particularly given its proximity to China’s biggest export market.

Mexico began quietly welcoming a greater Chinese presence even before the American presidential election. In October, China’s state-run media promised that the two countries “would elevate military ties to [a] new high” and described the possibility of joint operations, training, and logistical support. A month and a half later, Mexico sold a Chinese oil company access to two massive patches of deepwater oil fields in the Gulf of Mexico. And in February, the billionaire Carlos Slim, a near-perfect barometer of the Mexican business elite’s mood, partnered with Anhui Jianghuai Automobile to produce SUVs in Hidalgo, a deal that will ultimately result in the production of 40,000 vehicles a year. These were not desultory developments. As Beijing’s ambassador to Mexico City put it in December, with the American election clearly on the brain: “We are sure that cooperation is going to be much strengthened.”

Let’s pause to consider the illogic. Trump says that China is a grave threat, both militarily and economically. He has accused China of “rap[ing] our country.” That’s not the way most analysts would put it, but a fairly broad bipartisan consensus holds that China’s expansionism should be contained and its mercantilism checked. Barack Obama’s vaunted “pivot” to Asia tried to keep China’s neighbors from succumbing to its gravitational pull. Thanks to Donald Trump, China is now better positioned to execute the most difficult maneuver in its own, North American pivot—pushing the U.S. and Mexico further apart.

Even before Donald Trump’s foray into presidential politics, Mexico was a primary subject for incendiary right-wing news accounts. During the Obama years, conservative media in the U.S. blared unsubstantiated stories about Islamic State operatives camping out in Ciudad Juárez, waiting to commit car bombings across the border. It was reported on Fox News that copies of the Koran had been strewn along smuggling routes into Texas. Of course, the idea of terrorists slinking into the country isn’t itself outlandish. But these stories shared a profoundly faulty core assumption: that somehow the Mexican and U.S. governments were blasé about the threat.

One common complaint of populists, no matter their country, is that their nation has ceded sovereignty. This, in fact, has happened in Mexico’s case. The shock of September 11, and the immediate imperative of preventing a sequel, joined Mexico and the U.S. together. Their security services began sharing information, an exchange that became casual, almost automatic. When I called up an American official who served in the Department of Homeland Security, he recounted the ways in which the Mexican government has been integrated into U.S. counterterrorism efforts. The passenger list of every international flight that arrives in Mexico is run through American databases, and the results are passed along to American officers, some of whom are posted in Mexico City’s Benito Juárez airport. Cargo bound for the United States is inspected before it leaves Tijuana. In Virginia, Mexican officials sit in the National Targeting Center, which monitors the comings and goings of international cargo. The American official told me, “They would never balk by saying, ‘This isn’t in our interest.’ What’s in the interest of one is considered to be in the interest of the other.” Given the length of the shared border, and the fact that it is the most frequently crossed border in the world, the perfect success rate of these measures to date is a bureaucratic and diplomatic feat.

Mexico could assert its importance by dialing back these efforts. What seems more likely is that relations between the security agencies will slowly decay, as trust between the two countries evaporates and warm feelings give way to tensions. America’s everyday relationship with Mexico is like The New York Times’ presence at White House press briefings or a president’s avoidance of conflicts of interest: It’s a modern norm that seems a fixture of governance, until it erodes and perhaps irreversibly disappears.

So much of Donald Trump’s rise was predicated on a nonexistent fear: that Mexicans are pouring over the border. In fact, more Mexicans now leave the United States each year than arrive. But Trump could inadvertently trigger the waves of newcomers that he rails against. For the past few years, the border has been periodically flooded with Central Americans fleeing gang violence. Those surges could have been far larger had Mexico not stepped up enforcement of its southern border with Guatemala in 2014, largely stanching the flow of migrants. From 2014 through July 2016, with American prodding, the Mexicans detained approximately 425,000 migrants who were attempting to make their way to the United States.

Recently, however, migrants and their smugglers have found new routes through the reinforced border, and the number of Central Americans reaching the United States is again climbing. If Mexico were to conclude that there is little upside to its expensive efforts, the U.S. could find itself facing a genuine immigration crisis. The moral case for the United States’ welcoming these migrants is strong, but a sudden influx could overwhelm the American immigration system, straining budgets and exceeding the capacities of courts and detention centers.

The differences between Trump and Mexico’s likely next president may be a source of combustion.

Trump’s rush toward hard-line immigration policies could yield a grim bonanza of other unintended consequences. Mass deportations of Mexicans could uproot hundreds of thousands and deposit them on the other side of the border, forcing their reintegration into lives they left, many of them long ago. Perhaps the Mexican economy, the 15th-largest in the world, has the capacity to absorb these refugees from Trump’s America. But it’s equally easy to imagine a scenario in which they inundate the labor market. And even that possibility doesn’t begin to capture the likely economic costs of deportation. The Mexican economy would be deprived of the remittances that immigrants send back to their relatives. It’s hard to speak hyperbolically about the importance of these transfers—in 2016, Mexican Americans sent $27 billion back to their Mexican families, more than the value of the crude petroleum Mexico exports annually. Remittances are extensively studied by economists. Ample evidence suggests that they are as effective an antipoverty program as anything devised by governments or NGOs: Families that receive remittances are more likely to invest in their own health care and education. Relieved of the daily scramble for sustenance, they are free to participate in productive economic activity with lasting benefits.

If the Trump administration were to engage in mass deportations that choked the flow of remittances at the same time it engaged in a trade war with Mexico, it would wreck the Mexican economy, generating the sort of conditions that have, in the past, triggered waves of migration northward. Even if the likelihood of getting caught were far greater than before, the threat of capture wouldn’t necessarily deter migrants. History vividly shows that desperate people take risks that might otherwise appear irrational.

These scenarios may seem unimaginably distant, especially under current political circumstances. Peña Nieto has cautiously ambled into the Trump era, in keeping with his bland suavity. Mexico has much to lose from brinkmanship and blustery threats—perhaps more than the United States does. But Mexican prudence might not persist. Next year, the country will pick a new president. According to early polls, the likely winner is a familiar loser: the left-wing populist Andrés Manuel López Obrador—a k a Amlo, or, as the great Mexican intellectual Enrique Krauze dubbed him, the “Tropical Messiah.” Amlo lost his first presidential election, in 2006, by the thinnest of margins, and alleged that funny business cost him the presidency. His second defeat, six years later, was by a far wider margin. In both instances, his supporters took to the Zócalo, Mexico City’s main plaza, to noisily protest the results. In 2006, he even declared himself Mexico’s “legitimate president,” donning a red, white, and green sash of the sort that is ritualistically draped over the chief executive.

Amlo has squandered big early leads before, and is by no means an inevitability. Still, there’s a good chance that, in a year’s time, the populist Trump will be staring across the border at another populist. The differences between Trump and López Obrador are immense, and a potential source of combustion, but similarities also abound. Amlo’s political party is called the National Regeneration Movement (morena)—he wants to make Mexico great again. Like Trump, Amlo professes an almost mystical connection with the people. He alone can channel their will.

Pundits are fond of placing López Obrador in the same genre as Venezuela’s late strongman Hugo Chávez. That comparison might overstate his danger. During this campaign, Amlo has embraced a more business-friendly persona—the sort of savvy repackaging that helped longtime runner-up Luiz Inácio Lula da Silva climb to power in Brazil. Still, López Obrador has been very clear about his attitude toward the United States. He despises collaboration with the DEA and relishes the idea of renegotiating nafta on terms more favorable to Mexico. “Everything depends on strengthening Mexico,” he has said, “so we can confront aggression from abroad with strength.” If Amlo becomes president, all of the worst-case scenarios, all of the proposals for petulant retaliation, would become instantly plausible.

Not so long ago—for most of the postwar era, in fact—the United States and Mexico were an old couple who lived barely intersecting lives, hardly talking, despite inhabiting the same abode. Then the strangest thing happened: The couple started chatting. They found they actually liked each other; they became codependent. Now, with Trump’s angry talk and the Mexican resentment it stirs, the best hope for the persistence of this improved relationship is inertia—the interlocking supply chain that crosses the border and won’t easily pull apart, the agricultural exports that flow in both directions, all the bureaucratic cooperation. Unwinding this relationship would be ugly and painful, a strategic blunder of the highest order, a gift to America’s enemies, a gaping vulnerability for the homeland that Donald Trump professes to protect, a very messy divorce.

Renegotiate Nafta? Mexicans Say Go Ahead

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President Enrique Peña Nieto of Mexico could kick a decision to his successor, a potential blow to the preservation of Nafta. Credit Rebecca Blackwell/Associated Press

For more than two decades, free trade has been at the heart of Mexico’s relationship with America, responsible for pumping a stream of vehicles, audio components and avocados north and cheap corn, cattle and software south.

To the nation’s leaders, it was central, vital, nonnegotiable. At least until President Trump came along, promising to upend nearly $500 billion in annual trade between the two countries if it could not be re-engineered more in America’s favor.

Now, the Mexico’s leaders have a new priority: urging their American counterparts to hurry up and get on with it.

While free trade has long been an article of faith in Mexico, uncertainty over the fate of the North American Free Trade Agreement is hitting the country hard.

There has been an abrupt slowdown in foreign investment, pinching off much-needed capital as investors wait to see how things shake out. Last year, such investment fell by 6 percent, a prelude to what analysts have predicted will be a 21 percent drop in 2017. Add to that a flagging peso, lowered growth expectations, rising interest rates and looming political headwinds, and the urgency becomes clear.

Mexico, and its investors, need certainty.

For the moment, the Americans are not giving it to them, and don’t seem in a rush to do so. This month, Commerce Secretary Wilbur L. Ross said it would be later in the year before real talks even started — after a mandatory 90-day consultation period with Congress, which has yet to start.

The delay has irked the Mexicans, who didn’t want to renegotiate the pact in the first place.

“From the Trump and American perspective, this is purely an optional problem,” said Michael Camuñez, the president of ManattJones Global Strategies and an assistant secretary of commerce in the Obama administration. “They have taken one of the most productive trade relationships in the world and amazingly have turned it into a problem.”

Driving the pressure is an especially delicate political environment in Mexico. President Enrique Peña Nieto’s approval ratings are near single digits, and further delays in clarifying the future of Nafta could imperil not only growth, but also employment at a time when the government can least afford to lose support.

Adding to the uncertainty are midterm elections in the State of Mexico, the country’s most populous, from which the president hails. The state, a longtime center of power for Mr. Peña Nieto and his party, will hold elections on June 4, and it is far from clear that his party will win. A loss would be a devastating blow to the party, which has never lost there before, and would spell trouble in the 2018 presidential elections.

Which presents yet another paradox: The longer the Americans wait on Nafta negotiations, the more political pressure it places on Mr. Peña Nieto, reducing the flexibility he has to accommodate demands, or surprises, from Mr. Trump’s team.

For instance, if job losses begin to mount within the next six months, as some economists predict, the public pressure on the president may be so immense he could have a much harder time selling a revised agreement to Congress and Mexicans at large.

“The longer we wait, the harder it is going to be for Trump to get what he wants because the nationalist pressure on Peña Nieto will be cumulative,” said Pamela Starr, an associate professor of international relations at the University of Southern California. “The longer he is in the presidency, from today forward, the more of a lame duck he is.”

All of this means that the leverage Mr. Trump is looking for could start to diminish.

Already, the Mexican government has grown more stridently critical of the Trump administration’s stance on Nafta. The Mexican economic minister has said the nation will walk away from any deal that does not suit the country’s needs, and even proffered a list of deal-breakers: any sort of discussion of paying for a border wall, taxing remittances or carrying out a so-called border adjustment tax.

At the same time, there is a growing awareness that dealing with Nafta, a campaign priority for Mr. Trump, has suddenly taken a back seat to more pressing battles. And Mexicans have taken note.

“It is clear that Trump’s priority right now in terms of his agenda is to try to pass Trumpcare, and we know how long that takes,” said Carlos Elizondo, a professor at the School of Government at the Monterrey Institute of Technology and Higher Education. “The outcome of that debate and process in the U.S. Congress will undoubtedly affect every other item on his list, including, of course, Nafta.”

That could be a saving grace. Those reading the tea leaves of an eventual negotiation are hopeful that with Mr. Trump distracted, administration officials, including Mr. Ross, Secretary of State Rex W. Tillerson and others will take control of the talks. Both men have run global businesses in complex industries, and many here hope that will give them a more nuanced view of trade.

An evolving belief in the realm of business people, academics and even officials is that members of Mr. Trump’s cabinet will understand the importance of Nafta, and move to preserve and expand it — not tear it apart.

“When you know the kind of value chain that we have, you understand that it is a very difficult world to destroy, almost impossible,” said Juan Pablo del Valle Perochena, the chief executive of Mexichem, a Mexican chemical and building materials manufacturer. “There is so much at stake, of course, more for Mexico than the U.S., but there is a lot of value already in place. And when people understand that, they don’t worry so much.”

Still, the uncertainty has had a clear impact on the Mexican economy. The peso has dropped by double-digit percentages since Mr. Trump’s election, forcing the central bank of Mexico to raise interest rates in February to an eight-year high to anchor inflation and bolster the currency.

Expecting further pressure from the tense relationship with the United States, economists from an array of institutions have revised downward the expected 2017 growth for Mexico. Bancomer, a Mexican bank, for instance, revised its growth expectations for the Mexican economy to 1.0 percent for the year.

Delays that might bleed into 2018 will place negotiations in the middle of a presidential election year in Mexico. Indeed, some analysts suggest that Mr. Peña Nieto could kick the decision to his successor if negotiations go on too long. That, according to some, could be disastrous for those hoping to preserve Nafta.

The leading candidate, for now, is Andrés Manuel López Obrador, a populist whose candidacy has been given a major boost by the election of Mr. Trump. Mr. López Obrador, a two-time candidate who nearly won the election in 2006, has promised to end a relationship of “subordination” to the United States, while focusing on domestic issues.

It is unlikely that Mr. López Obrador will take as conciliatory a line in negotiations as the current administration.

“The temptation to simply delay the negotiation until it becomes the next president’s problem is real,” Mr. Elizondo said.

Your Editor Asks: Will Mexicans credit Trump for the changes coming to their country?

Mexicans Are the Nafta Winners? It’s News to Them

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By AZAM AHMED and ELISABETH MALKIN

In 30 years at Whirlpool, working at the company’s manufacturing plant in this industrial Mexican town, José Luis Rico has witnessed some pretty major changes.

The work force has grown, churning out refrigerators that look more like robots than the simple models of his early career. Fueling the changes was a free-trade agreement among Mexico, Canada and the United States that promised to lift Mexico into the future.

What did not seem to go up, however, was Mr. Rico’s salary. After a handful of raises, he still earns well under $10,000 a year — a sum, he argues, that hardly makes Mexico the big winner of the North American Free Trade Agreement that President-elect Donald J. Trump says it is.

In fact, to Mr. Rico and many other Mexican workers, politicians and economists, Nafta does not feel much like a win at all.

“It’s more like survival,” Mr. Rico said. “I thought it would make my life better, that this agreement would create opportunities for everyone.”

“Maybe it has,” he added, nodding toward the Whirlpool logo on the entrance to the complex. “Just not for us.”

Mr. Trump made questioning the virtues of Nafta a centerpiece of his campaign, at one point calling it “the worst trade deal maybe ever signed anywhere,” and he has not slowed down since his election. On Tuesday alone, he criticized General Motors for shipping cars made in Mexico to the United States, claimed credit for a decision by Ford to cancel plans for a new factory in Mexico, and named a well-known advocate of protectionist policies, Robert Lighthizer, his chief trade negotiator.

His argument has driven the narrative that where the American worker lost, the Mexican economy gained.

But here in Mexico, there is an increasing belief that Nafta, despite drawing an enormous amount of investment to the country, has been a big disappointment.

“At the end of the day, as a development strategy, it should have led to higher sustained growth, generated well-paid salaries and reduced the gap between Mexico and the United States,” said Gerardo Esquivel, an economist at the Colegio de México. “It has remained well below what was hoped for.”

Mexico’s economy has grown an average of just 2.5 percent a year under Nafta, a fraction of what was needed to provide the jobs and prosperity its supporters promised. More than half of Mexicans still live below the poverty line, a proportion that remains unchanged from 1993, before the deal went into effect.

Wages in Mexico have stagnated for more than a decade, and the stubborn gap between the nation’s rich and poor persists. A majority of workers in Mexico toil in the obscurity of under-the-table jobs at workshops, markets and farms for their survival.

New technologies, meanwhile, have cut many jobs while increasing productivity, which is good news for businesses but a blow to the work force.

“Mexico is seeing exactly the same phenomenon as in the United States,” said Timothy A. Wise, a research fellow at Tufts University. “Workers have declining bargaining power on both sides of the border.”

In part, Nafta’s failure to achieve its potential falls on the Mexican government’s shoulders, experts say. Rather than use the agreement as a launching point to grow and invest in many sectors of the Mexican economy, successive governments viewed the trade deal as a silver bullet for the country’s economic woes.

All of this is not lost on Mexicans, despite their government’s defense of Nafta. A recent poll by Parametría, a respected Mexican pollster, found that more than two-thirds of respondents believed that Nafta had benefited American consumers and businesses, while just 20 percent believed it had been good for them. The poll, consisting of 800 interviews in people’s homes, had a margin of sampling error of plus or minus 3.5 percentage points.

“There is a grand narrative in the United States that Mexico was the great winner of Nafta,” said Fernando Turner Dávila, the secretary of the economy and labor in the industrial state of Nuevo León. “Meanwhile, here in Mexico, they only see the benefits, which are glorified. They never see the downsides, much less talk about them.”

Mr. Turner cited the loss of nearly two million jobs in the agricultural industry because of the treaty, which benefited highly subsidized industries in the United States like corn to the detriment of Mexican farmers. And while the federal government lauds the increase in manufacturing exports, Mexico still relies on a tremendous number of imports from the United States.

“The Mexican government has not established policies to protect Mexican businesses,” said Mr. Turner, himself a businessman, with factories in a half-dozen countries.

That said, even critics like Mr. Turner do not want to see Nafta gutted. It is an imperfect deal, one that has failed to deliver on its promise, he said. But to terminate the treaty would be a disaster, he said, hurting both Mexico and the United States and creating even more job losses.

It would also not happen easily, critics contend.

After two decades, the two economies are tightly braided together. Goods manufactured by companies operating in both countries — whether speakers, cars or airplanes — cross the border multiple times during production, a shared manufacturing process that, if destroyed, would mean shared job losses.

“A lot of people are taking solace in the reality that it’s very difficult for the U.S. to impose tariffs on Mexico without damaging the U.S. economy as well,” said Christopher Wilson, a scholar at the Woodrow Wilson Institute. “You need something to replace Nafta. Otherwise you’re going to leave a lot of American workers out in the cold.”

The agreement has certainly brought positive changes to Mexico, economists note. Since it went into effect at the beginning of 1994, billions of dollars in investment has been pouring into Mexico every year.

Sleepy provincial towns have become manufacturing hubs. Workers assemble Ford Fusion Hybrid cars in the city of Hermosillo and Whirlpool refrigerators outside Monterrey. Tijuana sends flat-screen televisions across the border and the state of Querétaro hammers out parts for helicopters and corporate jets.

For two decades, those exports have been the main driver of growth in Mexico, which is why Mexico’s government is so eager to defend the country’s trade relationship with the United States.

Without the agreement, the foreign investment that creates new jobs will slow, or even vanish, some fear. Mexicans got a forewarning of the possible effect this week. After poor sales and criticism from Mr. Trump, Ford announced that it would cancel a planned car plant in San Luis Potosí, a state that Nafta has transformed into a hub for auto manufacturing.

“Mexico has done a lot right,” said Gordon H. Hanson, a trade expert at the University of California, San Diego. “It has a lot to be proud of. It has developed a middle class that lives in cities, that educates their children. It’s not the Mexico of 1993.”

The image of these bustling factories feeds the idea that Mexico is responsible for the hollowing out of America’s industrial heartland. But the reality has turned out to be much more complicated.

While American companies moved jobs to lower-wage Mexico to remain competitive, some new jobs emerged in the United States, in design or engineering, or in plants to make parts for the Mexican factories. In the end, “Nafta did not cause the huge job losses feared by the critics or the large economic gains predicted by supporters,” the Congressional Research Service concluded in 2015.

In Mexico, the hope was to mimic the success of East Asia’s so-called tigers, using free trade as the catalyst to modernize and overhaul the economy through exports. Instead, Mexico produced the exports, but not the growth. It even fell behind most other countries in Latin America during the 2000s.

But Nafta was not necessarily the problem. Much of the misstep, experts say, was the Mexican government’s belief that the agreement would be enough to transform the economy all by itself. Thinking of the trade deal as a panacea, the government failed to come up with a broader policy or make the investments needed to use the trade agreement as a lever to transform the whole economy.

Investments in research and development, for instance, have failed to materialize in both the public and private sectors. Government spending on infrastructure has dropped to its lowest level in seven decades, experts say, leaving an unreliable network of ports, highways and even internet connections across the country. Burdensome regulation and corruption stifled investment, while the nation’s banks lent far less than their Latin American peers, leaving small companies to scramble for credit.

Even where Nafta is succeeding, it is not pushing wages up, or creating enough needed jobs.

Rodolfo de la Torre, an economist with the Espinosa Yglesias Center for Studies in Mexico City, said officials initially hoped Nafta would bring jobs to the mass of poorly educated workers in Mexico. But by the early 2000s, much of that low-skilled work had left for China, where labor was cheaper.

Jobs for better-educated workers in Mexico remained, in part because of the technological advances in the industrial plants.

Now, in many of the manufacturing hubs of Mexico, wages, and hopes, have been frozen.

For 10 years, Jorge Augustín Martínez has driven a forklift for Prolec, a joint venture with General Electric that makes transformers. A father of two, he earns about $100 for a six-day workweek.

Though he has received modest cost-of-living increases, his last raise was five years ago, when gas, food and household items were far cheaper, he said. It was also before his second son was born. Between housing, insurance, savings and other requisites, he is left with about $40 a week to buy food and other necessities for his family, he said.

Some of the engineers in the plant make more, he said, but no one is thriving.

“We’re all the same, fighting to make ends meet,” he said. “I don’t know anyone who is very comfortable.”

Azam Ahmed reported from Apodaca, and Elisabeth Malkin from Mexico City.

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