Mexico is key to United States economic recovery

The current global situation has seriously affected trade value chains between Mexico and the United States, which must be strengthened for economic recovery.

According to official data, bilateral trade between Mexico and the United States, i.e. the sum of exports and imports, stood at 506 billion dollars in 2020, 13% lower than the 576 billion dollars recorded in 2019.

This means that the trade relationship between the two nations weakened as a result of the economic impact of the COVID-19 pandemic and its effects on the value chains that connect the two countries’ industries.

According to Carlos Bautista, Trade Specialist at La Salle University, Mexico plays a fundamental role in the economic growth of the United States in the new post-pandemic scenario, as well as the economic recovery of both countries. This is why the United States is interested in reactivating its economy by strengthening the value chains that unite it and Mexico.

Based on data from the U.S. Census Bureau, Mexico is the second largest trading partner of the United States, behind only China, with which the U.S. recorded an exchange of goods and services amounting to USD 560 billion in 2020.

Due to the importance in trade that Mexico represents for the United States, during a virtual meeting between the administrations of both countries it was agreed to strengthen the resilience and security of binational value chains, especially in the manufacturing industry which was one of the most affected industries. To do this, U.S.-Mexico high-level economic dialogue will resume.

However, although it is of utmost importance to strengthen the value chain, another point to be considered regarding the trade relationship with the United States is trust, which has been affected lately and may deteriorate with the Electrical Industry Act reform.

This opens up the possibility of new challenges under the regional dispute settlement mechanisms in the United States-Mexico-Canada Agreement (USMCA), or within the World Trade Organization (WTO) or through international arbitration. 

Even so, Carlos Bautista believes that the rapprochement between the governments opens the possibility of future dialogue to avoid confrontation. 

Oradel Industrial Center is located in Nuevo Laredo, Tamaulipas only 10 miles from the Mexico Texas border. It offers inventory or build-to-suit industrial buildings to international companies seeking to establish their operations in Mexico. The industrial park has all the infrastructure (water, sewer, gas, electricity, etc.) and services(fiber optics, rail, telecommunications,etc.)