Clinton `saves' Mexico, but at a cost
Known for his commentary on international relations and US politics, Rupert Cornwell also contributes obituaries and occasionally even a column for the sports pages. With The Independent since its launch in 1986, he was the paper's first Moscow correspondent - covering the collapse of the Soviet Union – during which time he won two British Press Awards. Previously a foreign correspondent for the Financial Times and Reuters, he has also been a diplomatic correspondent, leader writer and columnist, and has served as Washington bureau editor. In 1983 he published God's Banker, about Roberto Calvi, the Italian banker found hanging from Blackfriars Bridge.
Thursday 02 February 1995
Thereafter, however, the benefits to the President are harder to discern. At best, the new package will succeed in shoring up the peso and Mexico's international creditworthiness and in stabilising its volatile politics. If so, the entire affair may wellbe quickly forgotten here - and with it much of the kudos Mr Clinton has gained for his handling of the crisis.
If the rescue fails, however, the administration will be in dire straits indeed, accused of having squandered on a feckless foreign country up to $20bn of taxpayers' money for nothing. The hand of neo-isolationists in Congress would be strengthened and the President's ability to conduct foreign policy would be damaged, probably beyond repair.
Either way, the outcome could be a further erosion of Mr Clinton's standing in his party. If opinion polls are correct, 70 per cent of the population opposes the plan, partly from resentment that US money is going to Mexico when they are being told to accept budget cutbacks and austerity, and partly from the conviction - stoked by populist politicians and the radio talk-shows - that the only Americans to benefit are Wall Street speculators.
Such are the views of the unions and other constituencies on the Democratic left who had fought the original expansion of the North American Free Trade Agreement to Mexico in 1993. Now, as then, they say, Mr Clinton is showing his true colours, aligning himself with the markets and the Republicans. At a more sophisticated level, questions are already being asked over why action was not taken far earlier to avert the Mexican debacle.
US officials, it has been established, knew last August that the peso was overvalued and that drastic measures were needed to tackle Mexico's current-account deficit. But, critics say, Washington joined in a conspiracy of silence with the then Mexican President, Carlos Salinas, so as not to jeopardise the re-election of the candidate of the ruling Institutional Revolutionary Party.
In domestic politics, the affair has been vivid confirmation of how marginal the White House has become to the business of Congress: never greatly enamoured of Mr Clinton in the first place, even less so now after the November election disaster for whichthey still largely blame the President. For their part, Republicans mostly ignore him.
For the rest of the world, two lessons are to be drawn: first, that earlier predictions this Congress would be more inward-looking and protectionist are correct; and second, that the administration will have trouble delivering on any foreign undertaking which requires the approval of Congress.
Markets back deal, page 33
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