Mexico, the United States and Canada are celebrating, as this July 1 they celebrate the first anniversary of the new North American trade agreement (T-MEC). However, there is not much to celebrate, as the COVID-19 pandemic and the prospect of future labor disputes have overshadowed the expected gains so far.
But let’s not fall into total pessimism, because thanks to this agreement, Mexico has benefited from the strong economic recovery of the United States.
The three r
For the Secretary of Economy, Tatiana Clouthier, the first anniversary of the T-MEC is marked by the three R’s: reactivation, recovery and restructuring.
Trade reactivation : the treaty made it possible to give dynamism to regional trade during the pandemic, in an environment based on rules, providing certainty to investments and being a guarantor for the relocation of companies to be successful.
“During the most difficult moments of the pandemic that implied the closure of activities and confinement, Mexico maintained the supply of food to the United States, which allowed consumers to have access to a healthy and varied diet,” said Clouthier this Wednesday in a event with his American and Canadian peers.
Economic recovery : The T-MEC has been a “powerful engine” in the region, since the recent UNCTAD report identifies Mexico in 9th place among the countries that received the highest flows of Foreign Direct Investment in 2020.
Restructuring of value chains: The new trade agreement provided rules of origin for more investments to reach the region and to strengthen the regional supply and the productive fabric in the three countries.
“The Disentangling Value Chains study , by Alonso de Gortari, indicates that the imports of manufactures that the United States carries out from Mexico comprise an average American content of 30%. We agree on the need to strengthen our regional production chains, therefore, we are in contact with the Biden Administration and the Government of Canada so that the three countries can build resilient and efficient regional value chains ”, said the Secretary of Economy
Clouthier highlighted the labor changes that have taken place in Mexico, particularly in relation to union democracy and the labor justice system.
The United States Trade Representative, Katherine Tai, stressed that the agreement prohibits the importation of products manufactured under conditions of forced labor. “The Agreement between Mexico, the United States and Canada is the beginning of a new generation of trade agreements,” he added.
In a year marked by the largest economic, social and health crisis, it has become clear how important open trade and integration into supply chains are for industry, workers and communities, said Mary Ng, Minister of Commerce of Canada.
Impact
Beyond what was pointed out by the commercial representatives of the members of the T-MEC, not everything has been honey on flakes, since in the first 6 months of the T-MEC trade between North America decreased 4%, according to the Analysis coordinator and Research from the Center for Research in Economics and Business of the Tecnológico de Monterrey, Héctor Magaña.
“It has been light and dark. At first, it was expected that it would be a project that would detonate the growth of the three countries involved. However, its signing occurred practically at the beginning of the pandemic in 2020 and expectations were decreasing” added the specialist consulted by the EFE agency.
Sofía Ramírez, general director of the association “Mexico, How are we going?”, Pointed out that due to the commercial integration and the recovery of the United States, items such as the maquila, foreign direct investment (FDI) and remittances have been strengthened. in 2020 they hit a record of more than $ 40.6 billion.
Frictions
The T-MEC also reflects Mexico’s disagreement with the United States, particularly in energy and the environment, said Mariana Aparicio, coordinator of the Observatory of the Binational Relationship between Mexico and the United States at the National Autonomous University of Mexico (UNAM).
“I think these two issues have been very clear and they will perhaps be a political friction between the two presidents (López Obrador and Joe Biden) in the framework of the T-MEC. And work is going to be another great issue, “he said.
Under the T-MEC, two labor complaints from the United States to Mexico have already been registered for the violation of union rights and collective bargaining, one at the Tridonex auto parts plant in Tamaulipas and another at the General Motos factory in Guanajuato.
The Mexican government also asked the United States to review the working conditions of agricultural workers. In that sense, there are voices that point out that the T-MEC is not necessarily going to represent a shower of labor complaints from the US to Mexico, but that it may be the other way around.
The agreement was signed when Donald Trump was president of the United States, but the issues of interest remain current with Biden, Aparicio said. “There is a change in the form, but the issues remain and it continues to be such a complex relationship,” he said.
With information from EFE
