USMCA to drive new international production plants in Tamaulipas

Tamaulipas can take advantage of the United States-Mexico-Canada Agreement (USMCA) when opening markets and diversifying industries. 

Following its entry into force on July 1, Tamaulipas is projected to be one of the states that will be positively impacted in the coming months, mainly its maquiladora industry, which will undergo significant changes on a global level following the Covid-19 pandemic.

According to the Ministry of Economic Development, American companies that currently have factories in Asia will be looking to bring them as close as possible to their country. Therefore, Tamaulipas is considered to have the perfect conditions because of its geographical location, since it borders Texas, which offers an opportunity to take advantage of international crossings and seaports. 

With the above, the manufacturing industry, which represents 22% of the state’s Gross Domestic Product, will be strengthened. According to the latest report from the National Institute of Statistics and Geography (Inegi), it even surpasses other sectors such as real estate, construction and retail.  

According to Carlos Garcia Gonzalez, the State Secretary of Economic Development, the USMCA will benefit the state in several ways, first for its geographical location bordering Texas, the gateway to the United States and second, it follows the health contingency that caused transnational companies to avoid establishing their manufacturing in Asian countries. 

Tamaulipas handles 30% of Mexico’s international trade, which exceeds 280 billion dollars annually in both directions. It should be noted that at the end of 2019, exports that passed through the state reached 7.351 billion dollars. 

Specifically, in Tamaulipas, most import and export activity occurs on the border between Nuevo Laredo and Laredo, Texas, where, according to the latest data from the Free Trade Agreement (NAFTA), 28% rate of products cross the border.

In addition, the state has two important assets, its qualified and globally recognized labor force and the industrial parks in the region that offer land for establishing new operations so that the business can be developed.

One initiative of the Ministry of Economic Development of Tamaulipas is the organization of virtual meetings and webinars to network with potential investors who are interested in learning about and investing in the state.

According to Adrian Gonzalez, President of the Mid Valley Custom Broker Association (MVCBA), the entry into force of the United States-Mexico-Canada Agreement meant that entrepreneurs in the maquiladora industry in Tamaulipas had to familiarize themselves with the new rules of origin and the changes considered by the new trade treaty. In addition, with its entry into force, companies have had to start operating under the new guidelines, although currently there is no ideal scenario, given that, in the wake of the pandemic, both industries in the United States and Mexico were asking to delay implementation until 2021.

Meanwhile, Felipe Pearl Zorrilla, President of the Mexican Council for Foreign Trade (Comce), predicts that the northern region of the state of Tamaulipas will be where the manufacturing industry will get the most out of USMCA. However, he does not rule out the Plateau and the South of Tamaulipas, regions that will also be considered by private capital in the petrochemical, agricultural, technological, energy and logistics industries, so as to increase the state’s trade and help serve a market of 500 million inhabitants and an economy worth more than 23 trillion dollars across the three nations, which is equivalent to a fifth of the world’s economy.

The importance of USMCA for Tamaulipas

According to Rodolfo Gonzalez Valderrama, President of the Public Administration Commission, the Treaty between Mexico, the United States and Canada should be taken advantage of by Tamaulipas so as to open markets and diversify industries, which could include the automotive and aerospace industries due to the importance of the state.  

In addition, the proximity of Tamaulipas to the United States means the state must prepare itself and take advantage of its opportunity to completely engage in globalization, especially in the North American market.

Therefore, Rodolfo González Valderrama mentioned that the state must begin working on the tasks that are still pending. As an example, the opportunity to set up the aerospace industry is being sought, since Tamaulipas is the closest border to NASA, and likewise, to do what is necessary for automakers to set up their production plants in the state.

Customs agents’ view of the USMCA

According to Arturo Reyes Rosas, President of the Confederation of Customs Agents’ Associations of the Mexican Republic (CAAAREM), the entry into force of USMCA will result in significant benefits for Mexico’s economy, since it will facilitate trade administration, in addition to the fact that no tariffs, customs duties or other charges will be imposed on digital products.

For all of the above, Oradel Industrial Center, located in Nuevo Laredo, Tamaulipas offers important advantages for companies seeking to establish their operations in a region that is very close to international bridges.