In Search of a Return to Normalcy in U.S.-Mexican Trade


Photo: U.S. Embassy in Mexico

By EARL ANTHONY WAYNE

On Wednesday, April 29, former U.S. Ambassador to Mexico Earl Anthony Wayne delivered a brief speech on Mexico’s projected economic recovery during a web conference organized by the Mexican Employers Confederation (Coparmex) and the Business Coordinating Council (CCE). This is the transcript of that speech;

From my perspective in Washington, there are two big clusters of issues to address as part of the strengthening of our bilateral economic relationship as we emerge from the covid-19 pandemic:

1) restarting and reinventing supply chains; and

2) implementing the United States-Mexico-Canada Agreement (USMCA), or T-MEC.

First, assuring competitive, resilient and secure supply chains will be vital.

The two governments have managed to coordinate on reducing cross-border traffic while allowing commerce to continue during the pandemic. However, they did not engage sufficiently well to coordinate decisions on which supply chains are essential or vital during this difficult period.

The result has been serious disconnects in key sectors of the U.S. economy. Mexico’s government ordered closed producers of key parts and inputs for important sectors of the U.S. economy, including food and agriculture, healthcare and aerospace.

Mexico’s government ordered closed producers of key parts and inputs for important sectors of the U.S. economy, including food and agriculture, healthcare and aerospace.

There a several reasons explaining this disconnect, but the problem calls into question the reliability of North America’s supply chains.

It will strengthen the arguments of some for pulling back such networks into the United States.

The United States and Mexico need to resolve the current problems as soon as possible, while fully respecting health and safety concerns for workers and all concerned.

They also need to establish mechanisms for addressing such issues on a regular basis in order to help avoid such important missteps in these vital supply chains.

The private sector must be consulted and involved in such a process.

The overarching goal of such dialogue should be to make North America’s supply chains more secure, more resilient and more competitive.

Mexico has much to gain if it moves quickly and effectively to shape such a dialogue, since many companies will be looking to expand shorter and more reliable supply chains as both countries emerge from the pandemic. It also has a good deal to lose if it mishandles these issues.

This leads to the second big cluster of issues: the implementation of the USMCA.

The new trade agreement is slated to begin on July 1.

Governments are currently considering how to delay implementation of certain requirements, for example in the vehicle sector, to reflect the effects of the pandemic.

Governments are currently considering how to delay implementation of certain requirements, for example in the vehicle sector, to reflect the effects of the pandemic. They are also proposing new rules for customs and other implementations of the agreement.

It will be vital that this implementation proceeds as smoothly as possible. That means that the three governments need to work as cooperatively as possible. They need to involve the private sector closely in this process.

The USMCA provides the promise of 16 years of certainty for private-sector creativity and investment to flourish.

It also holds the promise of the three governments, along with other stakeholders, to find ways to make North America more competitive compared to other global partners and competitors.

Given the pace of technological change in the world and the often-unexpected impact of global challenges, highlighted by the pandemic, Mexico, the Unites States and Canada need to take full advantage of the openings made possible by the USMCA, including energizing and empowering the committee on competitiveness that will be established.

They need to seriously explore and coordinate on the issues that will deeply affect the three economies and societies over the next two decades.

This will require much stronger consultative mechanisms than we have at present, and a commitment to more serious and regular cooperation and coordination, with a strong involvement of the private sector.

Earl Anthony Wayne is a public policy fellow at the Woodrow Wilson Center and career ambassador (ret.) from the U.S. Diplomatic Service, where he served as U.S. ambassador to both Mexico and Argentina, as well as assistant secretary of State for economic and business affairs. He is also the co-chair of the Wilson Center’s Mexico Institute Advisory Board and a Diplomat in Residence at American University’s School of International Service.

…May 5, 2020

Categories: Economy, Health, International Relations, Medicine, Mexico, Opinion, Politics, U.S.-Mexico relations, United StatesTags: , , , , , , , , , , , , , , ,

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