USMCA is an historic opportunity for the Mexican economy

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USMCA is an historic opportunity for the Mexican economy 

The USMCA offers an historic opportunity for the Mexican economy to rebound; however, several analysts agree that all will depend on the way the Mexican government takes advantage of the agreement. 

According to Claudia Jañez, President of the Executive Council of Global Enterprises (CEEG), although Mexico should be considered a natural location for investment, both because of the entry into force of the USMCA and because of the global disruption of value chains, the current global situation is causing capital to move to places with clear regulations. 

The USMCA is the main tool for the Mexican Government to overcome the COVID-19 crisis, as the pandemic will cause Gross Domestic Product (GDP) to fall up to 10.5% in Mexico in 2020, according to the International Monetary Fund (IMF).

The Confederation of Industrial Chambers of Mexico (Concamin) said that Mexican industry aims to attract 20 billion dollars in investment, equivalent to 25% of the investments made by the United States in China in the last 10 years. 

Mexico’s new position with the USMCA

The USMCA strengthens Mexico’s position in a market of 490 million people, with a GDP of 23 billion dollars and trade operations worth 1.16 billion dollars, according to figures from the Ministry of Economy. 

In addition, Gerardo Tajonar, President of the National Association of Importers and Exporters in Mexico (ANIERM) said that the entry into force of this agreement took place at a very unique moment as, with the COVID-19 pandemic, Mexico can position itself as a focal point for world trade. This moment is unique as the Mexican economy is still struggling, but must take advantage of the opportunities that will be generated by filling the spaces left by the Chinese during the possible trade war between the United States and China. 

Therefore, ANIERM and CEEG agree that the USMCA will bring challenges regarding new labor rights, rules of origin in the automotive industry, e-commerce and the assimilation of new regulations in companies. 

For its part, the Mexican Business Council for Foreign Trade (COMCE) foresees a major transformation in manufacturing, which represents 87% of exports and has a high probability of repositioning itself in the U.S. and Canadian markets.

Oradel Industrial Center is convinced that the entry into force of the USMCA will attract foreign investment to the Mexican economy. That’s why our industrial park, located in Nuevo Laredo, offers strategic and competitive advantages for companies that are establishing their manufacturing operations in Mexico.

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