According to a recent report, all combined exports from Latin America equal those of Mexico, highlighting the country's relevance in the international trade landscape. Over 31 years, various trade blocs have emerged in the region, but North America stands out as one of the most interdependent and consolidated, especially from an industrial standpoint. Many companies view their plants in Mexico, the United States, and Canada as part of the same North American framework, reflecting the deep integration of the region.
It is crucial to preserve the international experience and the extensive production networks that have been established at a national level, seeking to maintain treaties such as the USMCA, whether in its current trinational format or as a bilateral relationship between Mexico and the United States, as originated in 1990. This alliance has allowed for the leveraging of the comparative advantages of each of the three partners, demonstrating that it is preferable to remain within trade agreements such as the USMCA rather than facing trade wars.
In a globalized world, production chains have become intricately intertwined since the treaty came into effect in 1994, especially in sectors like automotive. The coronavirus pandemic five years ago tested the strength of these chains, highlighting the importance of keeping production ongoing and considering industries as essential even in times of global crisis.
The synchronization of shared production across various industries has provided advantages to multinational companies in the region and has been a catalyst for the nearshoring phenomenon in recent years. Despite changes in governments, political parties, and economic strategies over the decades, the USMCA has withstood economic crises, impactful events, and renegotiations, demonstrating its adaptability and its importance for economic stability.
In light of potential tariff increases, it is crucial to explore alternatives for placing Mexican products in international markets without affecting local production, maintaining the premise that a negotiated arrangement is preferable to a trade conflict. The experience of the last 35 years of free trade in North America has demonstrated the benefits of a tariff-free trading relationship, even during times of tension or adjustments in trade policies.
In this sense, it is essential to consider the financial and strategic implications of political decisions related to international trade. Dialogue and agreements among key players, such as automotive companies Ford, GM, and Stellantis, have been fundamental in maintaining stability in the region. Despite political differences, financial rationality remains an important component in decision-making within the realm of international trade.
