President Trump Backs Down From Tariff Threat After US and Mexico Reach Agreement

The United States and Mexico appear to have reached an agreement on the current immigration crisis which will avert the harsh and draconian tariffs that President Donald Trump threatened to levy on all Mexican imports.

President Trump announced the agreement in two tweets:

“I am pleased to inform you that The United States of America has reached a signed agreement with Mexico. The Tariffs scheduled to be implemented by the U.S. on Monday, against Mexico, are hereby indefinitely suspended. Mexico, in turn, has agreed to take strong measures to … stem the tide of Migration through Mexico, and to our Southern Border. This is being done to greatly reduce, or eliminate, Illegal Immigration coming from Mexico and into the United States. Details of the agreement will be released shortly by the State Department. Thank you!”

In a press statement, Secretary of State Mike Pompeo thanked his Mexican counterpart, Foreign Minister Marcelo Ebrard. “The United States looks forward to working alongside Mexico to fulfill these commitments so that we can stem the tide of illegal migration across our southern border and to make our border strong and secure,” said Secretary Pompeo.

Minister Ebrard appeared to be pleased with the agreement. In a tweet, he thanked Secretary Pompeo “for his valuable participation in achieving today’s agreement with the US.”

President Andres Manuel Lopez Obrador also voiced his support for the arrangement in a tweet.

In a media note from the Department of State, the US and Mexican governments agreed to “work together to immediately implement a durable solution” and to crack down on “irregular migration” in their countries.

Mexico agreed to beef up immigration enforcement. Under the agreement, the National Guard will be deployed Mexico’s southern border and throughout the country. Mexico also agreed to allow the US to send immigrants claiming asylum back to Mexico while their asylum case is being adjudicated in the US and to provide migrants with jobs, healthcare, and education. For its part, the United States agreed to speed up the adjudication process for asylum claims.

United States committed to expand the practice of returning migrants seeking asylum at the southern border to Mexico while their asylum case works its way through the courts.

Both countries also agreed to continue to cooperate on security concerns along their shared border and to address the underlying issues driving migrants to leave their homes in El Salvador, Guatemala, and Honduras.

While the tariff threat appears to be lifted for now, the agreement leaves much to be desired. The White House has not specified if it will require additional appropriation from Congress to increase border security to implement the new agreement or if everything can be accomplished under current allocated funding.

Additionally, the process of sending migrants who crossed into the United States to claim asylum back to Mexico, known as Migrant Protection Protocols, may violate several laws. According to the Washington Post, federal judge blocked the controversial policy in April noting that it probably violated the Immigration Nationality Act and the Administrative Procedures Act.

Furthermore, President Trump may decide to use this tactic of essentially extorting Mexico to change its domestic policy by threatening massive and indiscriminate tariffs in the future if Mexico is unable to sufficiently stop the flow of migrants coming from Central America.

So while the immediate issue may have been resolved, the underlining problem President Trump’s willingness to break norms and use threats of a trade war continues to undermine the relationship between the Mexico and the United States.

Cleaning Dirty Money: an ex-minister in Ecuador, money laundering, and the Odebrecht scandal

On April 21, two men were arrested in Quito, Ecuador in relation to the Odebrecht case: Marcelo Endara and Alecksey Mosque­ra.

Marcelo Endara is a businessman who appears to have facilitated bribes through several offshore shell companies based in Panama and Trinidad and Tobago. 

Alecksey Mosquera was Minister of Energy for Raphael Correa between 2007 and 2009. Mosquera and Endara are accused of receiving US$1 million to “expedite procedures in the Toachi- Pilatón project,” a hydroelectric project. President Rafael Correa has denied that the hydroelectric project is tainted by the corruption that the prosecutors have uncovered.

Mosquera is also accused of receiving US$920,000 from Odebrecht. It appears that he used these funds to purchase machinery in the United States and China, which he later sold to a company he was a general manager of. Prosecutors believe Mosquera’s purchases and sales may have been to conceal the illicit origins of the money.

This case has revealed an aspect of the corruption scandal that is not often examined, i.e. how dirty money gets cleaned.

Money Laundering 101

Money laundering is a three step process of placement, layering, and integration. According to Investopedia:

Placement refers to the act of introducing “dirty money” (money obtained through illegitimate, criminal means) into the financial system in some way; “layering” is the act of concealing the source of that money by way of a series of complex transactions and bookkeeping gymnastics; and integration refers to the act of acquiring that money in purportedly legitimate means.

In this case, the placement was Mosquera’s purchase of machinery in China and the United States. He then layered the money by shipping the machinery to Ecuador and selling it to a firm which he managed. Integration occurred when he financially benefited from the sale, which, on the surface, would have appeared legitimate.

While corruption in the form of campaign donations and cash transfers have received quite a bit of attention from media outlets across the Americas, the individual acts of money laundering have unfortunately been left in the dark.

However, an exception must be recognized. IDL Reporteros have done an outstanding at investigating the Odebrecht case in Peru.

 

Money laundering in Peru related to the Odebrecht scandal. Source: IDL Reporteros

 

Their investigation and reporting (a more concise, English version of which can be found here) show the complex web that dirty money goes through before it reaches the pockets of corrupt officials.

In-depth investigations by prosecutors and journalists show the scope of this scandal and the lengths that corrupt businessmen, politicians, and other officials are will to go to launder money.

Follow on twitter @elhemisferioblog

Support El Hemisferio