Mexico has to look beyond the USMCA
In recent years, Donald Trump has threatened Mexico with tariffs and economic sanctions - Photo: José Luis González/REUTERS

Mexico has to look beyond the USMCA

09/12/2019
09:24
Mexico City
Editorial
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The government aims to diversify Mexican exports and reduce the country's dependence on the U.S.

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Three decades ago, Mexico opted for free trade as the driving force for development. Opening up trade has translated into commercial agreements with over 40 countries, in order to export and import products are very low tariffs.

Since then, the sales abroad rapidly increased: in 2018, total exports amounted to USD $450,000 million, 10% more than in 2017. Mexico was also listed as the 12th most important exporter in the world.

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On the other hand, the negative aspect is that 80% of commercial exchange is done with one country: the U.S. Although this commercial relationship has consolidated through the years, it is known that concentrating trade with one country was a risk.

Mexico has been going through this situation since 2016 when Donald Trump took office. Trump's threats about canceling the trade agreement were often included in his speeches. In the end, the agreement wasn't canceled but he pushed for a renegotiation. Currently, the U.S. is still making demands to Mexico and for them to be included in the USMCA.

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In this scenario, the Undersecretary for Foreign Trade, Luz María de la Mora, told EL UNIVERSAL that the federal government's aim is to diversify Mexican exports and reduce the country's dependence on the U.S.

Experts and analysts have always insisted on diversification but previous administrations have ignored this advice. It is true that the U.S. market is almost a natural place for Mexican exports because of the closeness and complementarity between both economies. Despite this, there are important commercial opportunities throughout the world and whose potential is not taken advantage of.

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Moreover, the business sector also plays a key role, which needs to have a global vision to expand to new markets, although orientation and government support are always needed, especially to boost small and medium enterprises.

If diversification became a reality, Mexican economy wouldn't have to go through uncertain times, sparked by Donald Trump. The commercial exchange with other countries besides the U.S. is minimum. For example, China has shown that distance is not an obstacle to dabble in trade.

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