Actions to capitalize on USMCA opportunities - Oradel
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Actions to capitalize on USMCA opportunities

The USMCA endorses Mexico, the United States and Canada’s commitment with an integration of trade and production that promotes the prosperity of all North Americans. For Mexico, this agreement is an opportunity to face certain growth challenges that will allow it to cooperate regionally, to compete globally.

The North American Free Trade Agreement (NAFTA) allowed Mexico to position itself as a relevant player in world trade, which was the result of the close trade and integrated relationship with Canada and the United States.

In this way, Mexico built a world-class industrial and manufacturing exports platform, which in 2019 positioned the country as the ninth largest exporter in the world, and cemented it as the destination with the second highest foreign investment in Latin America, accumulating almost 590 billion dollars between 1999 and March this year.

The new United States-Mexico-Canada agreement, which replaces NAFTA, represents a market of 493 million people, 18.3% of world GDP, and 15.9% of global trade.

Areas to ensure Mexico benefits from the agreement

NAFTA helped Mexico align its production to world markets, particularly to North America. That’s why it is vital to design programs and actions aimed at taking advantage of the new trade agreement that came into force on July 1st.

According to Graciela Marquez Colín, head of the Ministry of Economy in Mexico, four areas have been identified to ensure that Mexico benefits from the USMCA.

-Restructuring of value chains: Due to the current situation created by the pandemic and the effects of COVID-19, Mexico is considered the best option to receive investments in order to effectively restructure value chains, expand those that are already in the process of consolidation, and create new ones by relocating manufacturing processes to Mexico.

In addition, Mexico has a manufacturing platform with middle and advanced technology, as well as qualified labor, which allows it to participate in global and regional value chains.

The current trade tensions between the United States and China open a trading and business opportunity for Mexico in sectors and for products that will no longer be imported from Asia, and in which our country has competitive advantages for the integration into supply chains, strengthening national production.

The current trade tensions between the United States and China open a trading and business opportunity for Mexico in sectors and for products that will no longer be imported from Asia, and in which our country has competitive advantages for the integration into supply chains, strengthening national production.

Similarly, the growing digitalization of production and trade processes requires the promotion of the information industry as an interdisciplinary theme to connect efforts in this area.

-The advance of automation and the Internet of Things will generate changes in the production of goods and services: For the Ministry of Economy, it is of utmost importance to train workers on new knowledge and skills required by the Fourth Industrial Revolution. The development and training of the workforce must be carried out in a way that’s consistent with the productive drives in each region and future industries.

-Generating truly inclusive trade: Based on the Digital Trade and SME chapters, the governmental organization will promote the participation of small and medium enterprises in regional value chains, increasing training and business skills development programs.

The importance of the USMCA

Today, this agreement is the main trade tool that can revive the North American economy after COVID-19. This is because the agreement brings legal certainty to trade and investment in the region. It also allows North America to remain a competitive region, open for free trade. All this will keep Mexico positioned as a strategic, reliable, and attractive commercial partner for investment, both national and foreign.

This is why Oradel Industrial Center is an option that provides several advantages to international companies looking to establish their operations in Mexico, as it’s right on the NAFTA superhighway, and only 10 minutes from international borders, allowing for foreign trade between both countries.

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