Renegotiation or cancellation of the USMCA, now!
The federal government is very pleased because it succeeded in getting the United States to apply an average tariff of 15% to cars assembled in Mexico, rather than the 25% tariff that other countries have to pay.
Economy Secretary Marcelo Ebrard can do nothing but welcome these developments in the face of the arbitrary nature of the President of the United States, who cares nothing for the letter of the agreement Trump himself pressured to renegotiate with Mexico and Canada.
There's nothing to celebrate either, because not all automakers will receive this "benefit" on their exports, and it doesn't really give Mexico any competitive advantage because it doesn't change the climate of uncertainty in any way.
What needs to happen as soon as possible is to definitively determine whether the trade agreement between Mexico, the United States, and Canada, the USMCA, will be canceled or renegotiated.
Donald Trump's unilateral and arbitrary decisions have closed the door for next year's review as contemplated in the agreement, and the longer it takes to find a solution that Trump himself likes, the longer the uncertainty continues.
Because that has to be what Donald Trump likes about this second term, given the evidence that his own agreement from the previous term no longer satisfies him.
Yes, the main crisis is the United States, with a President who behaves with such authoritarian tendencies, allowing him to decide, for example, whether to accept the luxury plane given to him by the Kingdom of Qatar, and allowing the democratic rules of his country, public opinion, the political class, and anyone who opposes it to do whatever they want, because he wants his plane.
That's why it's no longer possible to wait; Mexico and Canada must seek renegotiation or cancellation now.
Clearly, both countries must use their best diplomatic and political skills to seek the continuation of some kind of agreement in the first instance.
But even the certainty of cancellation is already a clear rule to which we would have to adapt.
It is a fact that the first people interested in certainty about the commercial future of the North American region are the American business community itself, who lose as much or more in this uncertain environment.
But it's also a fact that many American productive sectors will feel emboldened by their President's arrogance and will seek to take advantage of their Mexican and Canadian counterparts.
Where this could be seen most clearly is in the agro-industrial sector, where the productivity of Mexican producers, perhaps due to climate, has been outstanding.
In the Canadian case, the Americans have long targeted the dairy and forestry industries.
It is expected that the Republican administration will seek to incorporate non-trade issues into a potential new agreement, such as migration or drug trafficking.
It is virtually inevitable that a renegotiation of the trilateral trade agreement would be advantageous to the interests of the President of the United States.
But even so, given that these are unprecedented times in the world, it's better to have some certainty now.
It is expected that the Republican administration will seek to incorporate non-trade issues into a potential new agreement, such as migration or drug trafficking.
Eleconomista
