A Ton of Money

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Carlos Mota

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Publicado: 27/11/2024 · 3:14 p.m. MX | Actualizado: 27/11/2024 · 3:14 p.m. MX

The USMCA Seems Dead for These 5 Reasons

First, the key feature of the trade agreement among the United States, Canada, and Mexico is their role as “business partners,” essentially trade partners. Regrettably, President-elect Donald Trump’s proposal to impose a 25 percent tariff on Mexican exports undermines this definition and highlights the tenuous nature of the signed agreement. If these tariffs do take effect in January, this vital deal could be doomed to the trash bin.

Secondly, the treaty highlights our uniqueness and sets us apart from other nations. This is the fundamental purpose of signing an agreement: to create differentiation from those without a similar pact. The United States, Mexico, and Canada share a trade agreement that ensures equal treatment for goods produced in this region. However, Donald Trump has recently decided to impose tariffs on both China and Mexico, merging a nation engaged in a trade war with one that has a free trade agreement. This clearly indicates that the treaty is of little significance to him.

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Third, the USMCA is a trade agreement aimed at facilitating the exchange of goods and services while ensuring equal treatment for businesses in member countries. Trump’s inclusion of issues like fentanyl trafficking and migration indicates that the treaty’s relevance for the U.S. hinges on its connection to resolutions regarding these other pressing matters. When unrelated topics are introduced, the treaty strays from its original purpose.

Fourth, the treaty features enhanced dispute resolution mechanisms, encompassing labor disputes, arbitration panels, customs verification protocols, and provisions for conflicts between businesses and governments. Nonetheless, these mechanisms will not address Trump’s tariff threat. Even President Claudia Sheinbaum’s letter to Trump, sent yesterday, does not utilize the treaty’s dispute resolution processes. The reason is simple: invoking the treaty would be ineffective in eliminating the tariff threat.

Fifth, priorities have changed. Decades ago, the U.S. championed free trade to reduce prices on countless products for American consumers. Today, the situation is different. Although maintaining low prices is still crucial, job creation and the revitalization of domestic industry are now equally important. This shift has diminished the strategic relevance of trade agreements considering this new reality.

CHINA

Chinese spokeswoman Mao Ning expressed that her country is prepared to uphold the strong momentum in trade relations and economic collaboration with Mexico. This response followed remarks made by President Claudia Sheinbaum during her morning press conference.

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Carlos Mota