Countries of the World/COUNTRYS.BIN/dp/0242/02421.txt

Text File | 1991-06-25 | 22KB | 375 lines

$Unique_ID{COW02421}
$Pretitle{279}
$Title{Mexico
The Negotiators}
$Subtitle{}
$Author{George W. Grayson}
$Affiliation{Center for the Study of Foreign Affairs}
$Subject{mexican
mexico
states
united
negotiators
mexicans
mexico's
oil
negotiating
political}
$Date{1987}
$Log{}
Country:     Mexico
Book:        National Negotiating Styles
Author:      George W. Grayson
Affiliation: Center for the Study of Foreign Affairs
Date:        1987

The Negotiators

Chain of Command

     The president is Mexico's principal decision-maker. He permits
flexibility to his negotiators in questions of tactics. However, he and he
alone must assent to the terms of any important agreement, particularly one
involving the United States. A case in point is the frenetic effort by then
Finance Minister Jesus Silva Herzog in mid-August 1982 to obtain U.S. support
to prevent default on a $82 billion (now $100 billion) foreign debt. Even
though Silva Herzog arrived in Washington during a sleepy, late-summer
week-end, he found a receptive audience in Federal Reserve Board Chairman Paul
A. Volcker, Treasury Secretary Donald T. Regan, Deputy Treasury Secretary
Timothy McNamar, Agriculture Secretary John R. Block, and Ambassador Gavin.
Two days of lengthy and intensive talks yielded a multibillion dollar rescue
package, including a $1 billion cash purchase of Mexican oil for the Strategic
Petroleum Reserve. The imposition of a negotiating fee, frequently used in
private deals, was proposed to obscure the size of interest charges on this
transaction, an extremely sensitive item in Mexico. The U.S. Treasury proposed
a $100 million fee. The Mexican negotiators, unhappy over the amount, had to
secure Lopez Portillo's approval, even though assessing a fee had been
accepted in principle. The president vetoed the $100 million payment and
authorized Silva Herzog to break off the talks. "Let Rome burn," Lopez
Portillo informed him. The bailout was accomplished only after the Americans
halved the fee to $50 million.

     Mexican negotiating teams exhibit a united front, making it virtually
impossible to exploit differences among their members, who dutifully defer to
the principal negotiator. He, in turn, defers to the president in Mexico's
centralized system. The style of principal negotiators depends on their
personalities, constituency, and the issues on the table. The Foreign
Ministry's emphatically Third World orientation means that its spokesmen
frequently articulate their points in ideologically-charged, anti-U.S.
language, urging policies congenial to Nicaragua's Sandinistas or the
establishment of a New International Economic Order that would transfer
resources from "have" to "have not" states. Pronouncements by Mexico's U.N.
delegation reflect this tendency, which is particularly notable in
international organizations where the United States is a popular whipping
boy. Further, in 1985 in the U.N. General Assembly, Mexico voted with the
United States only 14.5 percent of the time-a figure lower than that of any
nation in the Western hemisphere with the exception of Guyana (13.9 percent),
Nicaragua (8.4 percent), and Cuba (6.2 percent). Such a tack is in contrast
to the pragmatic, business-like approach of negotiators from the Treasury and
Commerce ministries, the Central Bank, or Pemex.

Mexico's Principal Negotiators-An Impressive Team

     Mexico's principal negotiators are excellent. In fact, a U.S. Treasury
official described Angel Gurria, Mexico's chief debt negotiator, as a
"miracle worker" who has obtained "fantastic terms" for Mexico in negotiations
with private banks. He is arguably the best in the Third World. Also
possessing world class talent are Silva Herzog, Central Bank President Miguel
Mancera Aguayo, and Commerce Minister Hector Hernandez Cervantes. These men
have mastered their subjects, know their opposite numbers, are familiar with
the U.S. political system, and understand the international economic and
political environment. For his handling of Mexico's 1982 debt crisis,
Euromoney magazine saluted Silva Herzog as 1983's "finance minister of the
year." Meanwhile, the Wall Street Journal said, "Bankers smile at the mere
mention of Mexico's charismatic finance minister."

     Interestingly, the most acerbic critics of these sophisticated,
middle-class technocrats or tecnicos are Mexicans. Specifically, old-line
politicians despair at the ubiquitous presence in key positions of
well-educated cosmopolites who have no electoral experience, much less an
appetite for pressing the flesh with peasants, hammering out deals with ward
heelers over tequila and Carta Blanca beer, or keeping their ears to the
ground.

     Charges of elitism aside, Mexico does field an impressive first team on
a half dozen or so perennial issues. Its negotiators are intelligent and
well educated. Moreover, in contrast to most U.S. Foreign Service officers,
Mexican diplomats, eager to keep their contacts current in a Byzantine
political system, prefer to remain in Mexico City, where they are available
for negotiating assignments. As Ambassador Jova has reported, the Mexicans
do not hesitate to bring back an envoy from a distant land to participate
in talks if he is an expert on the subject at hand.

Weakness in Back-Up Staff

     But, to continue the sports metaphor, the Mexican bench is weak, making
it impossible to carry on two or more separate negotiating matches in
different parts of the world. This is especially true in an area such as
energy, where the Mexicans boast only a few years of "big league" experience.
The need for oil specialists to attend various OPEC-related gatherings in
Europe forced three postponements of a Washington meeting of the Bilateral
Energy Consultation Group, scheduled for early 1986. But the U.S. record on
continuity is worse because of relatively brief assignments, the escalating
number of political ambassadors, and the ever faster moving revolving door
between government and private careers. Mexican staff work has improved
greatly. Yet, it pales in comparison to the U.S. capability, mainly because of
comparative dearth of information.

Negotiating Strategies and Tactics

     Mexico's negotiating strategy resists categorization into phases such as
"opening moves," "period of assessment," "end game," and "implementation." In
fact, circumstances dictate whether Mexicans begin with a position that is
"extreme," "reasonable," or "non-engaging." In recent years, expectations
about oil prices correlate closely with Mexico's behavior at the bargaining
table.

Intractability

     During the halcyon days of rising oil prices, Mexican negotiators
frequently displayed an intractable or non-engagement style. Following
resumption of natural gas talks in the spring of 1979, the Mexicans clung
tenaciously to the idea of keying the price to the BTU content of No. 2 fuel
oil, a demand that had precipitated the breakdown of discussions in 1977.
Under Secretary Julius L. Katz reported Mexico's unwillingness to consider
other pricing mechanisms. At the beginning of the third session, for example,
the U.S. team asked if their hosts wanted to begin the dialogue. "No," was
the reply. The U.S. spokesman next proceeded to sketch his country's position.
Still no response, not even the suggestion that the American proposal, or a
part of it, sounded interesting or had any merit whatsoever. The Mexicans
might eventually ask a question tangential to the initial presentation,
prompting a desultory and patently unsatisfactory discussion. Nonetheless,
they refused even to indicate that they felt a natural gas agreement would
be a good idea. The sessions proved "very painful," according to Katz.

     At this point, the Mexicans were greenhorns at the poker table on energy
matters. They realized that the United States had substantially more
information than they about oil and gas markets. Moreover, no member of the
Mexican team wanted to make statements that might be interpreted by his peers,
superiors, or the media as his having "sold