USMCA Opportunities for Mexico
According to specialists, the new USMCA trade agreement, which is basically an updated version of the North American Free Trade Agreement, could boost modernization in the country’s industry.
In first place, it is expected that once in place, the USMCA will put an end to the atmosphere of economic uncertainty in Mexico, but beyond that, it is considered that due to the stipulations of this agreement in terms of workplace and environment, Mexico will be obliged to modernize its institutions and workforce, and this will have organic repercussions on the economy of our country.
In general terms, the positive aspects envisaged are:
– Mexico will still have access to the largest market in the world, which will give greater certainty to investors and favor job creation.
– Forming part of this agreement guarantees stability for the flow of trade and investment.
– It will reinforce regional competitiveness, with rules of origin that promote the integration of value chains.
– It benefits Mexican workers and companies, since millions of jobs in the country depend on exports to the United States.
The USMCA was designed to update the previous agreement, partly seeking more inclusive and responsible agreements.
On the other hand, the main risk the experts have identified in their outlook is having approved disciplines in the workplace, in the environment (although partially) and the expedite mechanism for dispute settlement which could be misused to affect investment in Mexico.
Given this outlook, experts provide four recommendations for companies in general:
Analysis: Spend enough time examining how the new rules of origin or minimums affect your company.
Operational advice: It is important to identify and verify compliance with new information requirements for classifying origin. Look into automating processes, carry out a general review of current contracts that the company has in place to identify loopholes and/or risks, and validate customs classifications and costs.
Results improvement: Analyze the use of the intermediate material rule, the adjustments with regard to the regional content rule, the changes in the manufacturing process and the relationship with providers.
Implementation: Develop specific business cases, ensuring that there are both internal and external recourses available, as well as systems and implementation of measures aimed at efficiency.
Organizations that take these precautions will have the capacity to take on the USMCA as an opportunity that could lead to increased profitability and growth.