USMCA has pros and cons for Mexico
Friday, January 10, 2020
Subject
Implications of the USMCA.
Significance
Mexico’s Senate on December 12 ratified changes to the US-Mexico-Canada Agreement on free trade (USMCA), agreed on December 10. Several important changes were signed by the three governments in Mexico City, altering the original agreement signed in November 2018. Mexico now awaits ratification of the final deal in Washington and Ottawa. If enacted, the accord will replace NAFTA, which has determined the rules of trade among the countries since 1994.
Impacts
- What was initially framed as a political victory for AMLO may lose lustre as details emerge on the concessions granted by his government.
- Long-term auto industry investments in Mexico may suffer due to new stipulations on issues such as regional content and wages.
- After the USMCA is formally enacted, Trump will probably focus on seeking to reduce the US trade deficit with China.
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