(Expansion) – The commercial relationship between two countries that have been interacting commercially for more than 200 years does not arise or stop due to what happened to the FTA and, much less, due to what is happening today with the unfortunate T-MEC.
Agreements only make it better or worse. We Mexicans have seen, in the last three decades, a significant increase in international financial agreements, in part, thanks to the fact that many of them were only mechanically replicated with countries with which the relationship is, to say the least, superficial, being more political padding that expands markets.
In what seemed like a smooth course between administrations, it happened that we were wrong to give more weight to the diplomatic team, in charge of the forms, and not to the technician, responsible for the fund. If we add to this the fact that those in charge of the Ministry of Economy usually lack the track record and solid preparation in matters of foreign trade, the result we arrived at was to be expected.
Indeed, the expertise that a negotiation of this magnitude demands is not acquired by winning a deputation, nor by being in charge of a state portfolio, and much less, being an usher for a presidential candidate.
To make effective the broad spectrum of agreements that we have been signing, we need to have professionals more trained in creating favorable long-term conditions than in making thunderous or fleetingly spectacular announcements. More than a century ago, the foreign service branch did the right thing, there, fortunately, there is the notion of a career, but of course, you have to know how to keep them on the sidelines and in the channel that their specialty marks.
Characters who reached the top positions, without going through elementary formative stages, announce that it will be through tariffs that the neighbor to the north will assert its position. However, it is clear that they do not see beyond the colonialist document that was passed to them as a fast ball, and that was only structured to add water to the electoral mill of the Republicans, and incidentally, take away the “North America”, a region to which , in private, they estimate we do not belong.
Considering a broader panorama, we must take into account that a country that suffers from the breakage or inconsistency of the production chains will hardly employ measures that make the entry of supplies more expensive or more complicated. For this reason, the idea that the tariff route will be chosen assumes an unreal economic-financial environment.
If we add to this that the enormous inflation it faces has its origin in an insufficient supply of goods and services, that is, inability to satisfy demand, the idea of resorting to tariff measures is even further away.
This does not mean that the proposed consultations are meaningless. No, they are part of a well-articulated plan to establish dominant positions, such as those that the president did not report in their fair dimension. As an example, suffice it to say that the fact that they supply us with millions of tons of fertilizers, at a subsidized price, determines that they stop buying from Russia, this being a prominent item in the commercial relationship with the invading country.
The neighbor to the north knows that the coastal refinery, far from being a solution, will be a bottomless barrel, which will soon be operationally unaffordable, so they also know that Deer Park will play a prominent role in the Mexican refining process. Yes, that plant that required an urgent reconfiguration to meet environmental and safety standards, which has not been done. Here yes, a tariff on the export of fuels would have a place, but it has nothing to do with the T-MEC.
On the other hand, the growing remittances, which no one has determined to regulate or supervise, show an unexplored tax profile that does not impact the electoral popularity of the other side of the Bravo. The accounting undervaluation of the financial liabilities of Pemex and CFE is an issue that the SEC has already scheduled, since by correctly incorporating debts to suppliers and pensions to the balance sheet, the ability to continue receiving financing will be reduced. Yes, the rating would be made uncertain, making access to the debt market haphazard.
So that the retaliation, expressed as giving there to Mexican public companies, the treatment given here to foreign investors, or, the simple sovereign regulatory exercise in that country can change, overnight, the reality Mexican, revealing, as distinguished by the Royal Academy of Language, the value of recklessness.
Editor’s note: Gabriel Reyes is a former tax attorney for the Federation. The opinions published in this column belong exclusively to the author.