Relations between the United States and Mexico transcend trade ties, suggesting a deeper socioeconomic confluence shaped by agreements such as NAFTA and its successor, the USMCA. This confluence is particularly notable in the southern United States and northern Mexico, where critical aspects of social health, including health care and education, flourish, illustrating a mosaic of shared prosperity and regional cohesion.
The currently activated general dispute settlement mechanisms of the USMCA, has two active cases with Mexico as the respondent country. These cases are related, for example, to decisions made by the Morena administration in energy matters. In essence, the administration's decisions conflict with the commitments they have made under the USMCA, triggering uncertainty, particularly because of the treaty's review in 2026. Furthermore, Plan C, which was discussed by the current Mexican administration and which President-elect Claudia Sheinbaum has indicated she intends to continue, posss additional risks in terms of North American competitiveness. Many of the proposed initiatives, such as the organic simplification reform seeking the extinction or integration of decentralized bodies, reforms of the State´s energy industries, the ban on genetically modified corn imports into Mexico, proposals to not grant water concessions to private entities in certain areas, and the prohibition of open-pit mining concessions, violate several agreements included in the USMCA. This poses significant risks for Mexico, as failure to adhere to USMCA guidelines could jeopardize the continuation of a trilateral agreement beyond 2026, potentially depriving Mexico of the benefits it provides.
Where is the trinational relationship heading with the new treaty? This article reviews the various interpretations and ideas surrounding the North American Free Trade Agreement (NAFTA) and addresses concerns related to social and economic changes generated by uncertainty before its implementation. It discusses how the treaty's fundamental objectives, aimed at expanding trade and investment between the United States, Mexico, and Canada, have been achieved. While the utopian expectations promised by its supporters were not fully met, the key evolution over these thirty years is emphasized: the integration and strengthening of social and political ties among the three countries, creating an interdependent region. Faced with a lack of consensus and divergent visions from each country, the article suggests that cooperative solutions could drive deeper regionalism in North America.
In this report on Mexico's Social Progress Indicator (SPI), social progress at the level of the federal entities is analyzed, with a specific emphasis on trade openness and its relationship with the SPI. The analysis of indicators and their correlation with social progress leads to the conclusion that there is a limited positive relationship. It is noted that a state can have high trade activity without this directly translating into higher social progress. The section dedicated to trade openness in the report interprets these results and suggests possible causes for the entry barriers faced by lagging states, with the goal of ensuring that all regions of the country can benefit from trade openness.
This article provides a historical account of the trade relationship among North American countries, emphasizing the positive effects of democratic governments in the region and how they have favored regional collaboration. Over the 30 years of commercial integration, the decisive factors behind negotiations and approvals have necessarily been political. Maintaining institutional stability emerges as a key factor to ensure a sustainable commercial future in the region. The upcoming electoral period in 2024 and the joint review of the treaty in 2026, calls for North American governments to ensure that domestic policies are favorable to the commercial integration that has been beneficial for all parties since its approval. In this context, the article explores the relationship between democratic institutions and commercial integration, underscoring the importance of maintaining a stable political environment to guarantee the ongoing success of commercial cooperation. The article also addresses the identification of challenges that have weakened the trade relationship over time, providing insights into the elements that countries possess to ensure the continuity of this integration.
The USMCA (T-MEC in Spanish) builds upon the NAFTA but also incorporates significant changes, particularly in the labor market. If these changes are given strength and direction, they could constitute an appealing vision for inclusive trade within the USMCA and throughout the entire continent. It has the potential to shape a new generation of trade agreements and economic relationships with other countries while not excluding shared prosperity for workers through cooperation.
A report delving into the convergence of interests in near-shoring and countering political coercion and dependency on China and other countries outside the region. It underscores that it is a unique moment for Mexico and the United States to work closely with other allies in constructing their integrated support strategy. This report outlines specific areas and elements of an ally support framework to strengthen economic cooperation and security between Mexico and the United States.
North America is hosting the first regional World Cup, representing a unique opportunity to embrace regional identity and teamwork off the field. Taking advantage of the economic integration of the three countries in the region - facilitated by the USMCA - requires returning to multilateral solutions to shared problems.
This report presents the challenges that the next federal administration will face regarding international trade. These include the promotion of investments in strategic sectors, strategies to promote nearshoring, improvement and expansion of infrastructure, as well as improvements at the border between Mexico and the US, with an emphasis on greater efficiency and security.
The document provides a brief analysis of the legal avenues already available for the USMCA countries to design and execute an expansion process. In addition to the technical negotiation process itself, expanding the USMCA will require a coordinated strategy that takes into account the domestic political situations in Mexico, the United States, and Canada, as all three countries are set to have general elections in 2024 and 2025.
In 2023, Mexico will become the United States' top trading partner, accounting for 15.6% of total exports and imports, surpassing countries such as China, Canada, and Germany. Despite Mexico's privileged geographic and trade position, there are other nations offering additional advantages. It is crucial to leverage the momentum of trade trends to foster closer relations in North America. Banco Base presents relevant information to help Mexico assess its opportunities and address its challenges effectively.
Public data on the trade relationship between Mexico and the United States are collected, filtered, and analyzed. This data is ideal for monitoring trends, making informed decisions, and identifying prominent players and sectors. A model is used to generate a score that weighs other macroeconomic variables regarding the economic potential stemming from near-shoring. This score contributes to the generation of an impact assessment.Nearshoring que fue un insumo para generación de una evaluación de impacto.
The United States-Mexico-Canada Agreement (USMCA), also known as T-MEC in Spanish, is currently at the midpoint between its implementation three years ago and its first joint review, which is scheduled for 2026. At this intermediate stage of the initial phase of the agreement, the article analyzes the challenges Mexico is facing as it seeks to maximize the benefits of its USMCA membership. It acknowledges the positive effects the agreement has had on foreign direct investment and economic growth.
This research work conducts an analysis of the new trends in the semiconductor trade, taking into consideration the political environment in the United States and emphasizing the possibility of relocating supply chains to neighboring countries like Mexico. It provides an overview of the general context of international supply chains, while another section addresses the semiconductor demand in the North American region up to the present day. The primary focus of this study is to assess the business opportunities that certain segments of the supply chain may have for relocation to Mexico, considering current obstacles and proposing strategies aimed at developing public policies that promote collaboration between both governments.
Regional integration of supply chains will deepen over time, but access to clean, reliable, and efficient energy supply remains a challenge. The trilateral agreement (USMCA) must harness the digital revolution to truly succeed and realize its potential. North America is well-suited to attract investments in future industries, but to develop these digital economic opportunities, access to clean and reliable energy sources is essential.
In the new landscape of international trade, Mexico could play a pivotal role due to its geographical proximity to the world's largest market. This article provides a comprehensive and detailed analysis of the emerging trade trends, addressing them on a sectoral and regional basis. It is complemented by a series of interactive dashboards that make the information not only accessible but also continuously updated. The goal is to serve as a guide for decision-making by both businesses and governments, as well as a valuable source of information for the general public.
This paper presents industrial policy recommendations aimed at enabling Mexico to leverage the opportunities offered and presented by the USMCA. Emphasis is placed primarily on the automotive and electronics sectors, beginning with a contextual overview of these industries. It provides an extensive qualitative and quantitative justification for their increasing relevance in terms of added value, foreign direct investment (FDI), exports, and job creation in Mexico. The paper includes highly useful graphs illustrating the growth patterns of these industries, demonstrating their dynamism, competitiveness, and significance for the country, while highlighting the pivotal role of the USMCA in achieving these outcomes.
North America has weathered three tumultuous decades since the implementation of the North American Free Trade Agreement (NAFTA). What characterizes our shared region today? What kind of region can promote our shared interests and well-being in the next generation? This volume consists of essays that explore how regional leaders can forge inclusive and effective strategies to ensure that the coming decades in North America build upon past successes while addressing significant shortcomings.
Mexico shows increasing trade dependence on China and the US a decreasing one. That is why our country must plan a regionalization strategy that is in its best interest and that respects its sovereignty, considering maximizing the benefits of its various relationships and commercial allies.
Mexico and Canada are the top destinations for U.S. agricultural exports, surpassing China. The complementarity of agricultural trade under the USMCA ensures year-round access to fruits, vegetables, and grains across the region, while also creating jobs and driving economic growth.
The automotive industry is the largest component of total trade in North America and the most integrated in supply chains, being the example of a success story. The change from NAFTA to USMCA comes at a crucial time for the automotive industry in North America, driven by the rise of new technologies such as electric vehicles (EV), hybrids, plug-in hybrids andhydrogen solutions. As climate change redefines priorities, North America is well positioned to lead this transformation, leveraging its integrated supply chains and shared expertise.
This report discusses the potential negotiations that can take place between the U.S., Mexico, and Canada regarding their relationship with China at the 2026 UMSCA review. It begins by providing a brief historical account of China's role in the North American Integration project and clearly outlines the conflicting views on the relationship to China between Mexico and the U.S. On the one hand, the U.S. has increasingly monitored policies towards China, and established a confrontational relationship with the country. On the other hand, Mexico finds itself caught between a rock and a hard place because, while Mexico's dependency on the U.S. (and on the UMSCA's benefits) is undeniable, there has also been a clear increment in the economic and trade relationship between Mexico and China. Additionally, the changes in the administration both in the U.S. and Mexico raise the question of how Mexico will maintain the U.S. contempt without antagonizing China, especially during the 2026 UMSCA review, in which it is expected that the topic of "China" implies a more significant weight in its discussion. It is crucial, hence, for the three North American countries to address the "China" topic while understanding that the benefits that China brings to Mexico cannot be simply taken away. The 2026 must be seen, rather, as an opportunity to develop equally beneficial policies that serve all countries.
Negotiations on free trade with the United States were not always welcomed by Canadians and Mexicans. Although Mexico and Canada took different paths in recognizing the benefits of this treaty in social and political matters, both were driven to initiate discussions on the North American Free Trade Agreement (NAFTA) due to the global economic context. The article explores the varied stances, perspectives, and ideas held by the private sector regarding trade relations among the three countries, along with the political and economic strategies employed by both nations to secure business support. Despite its acceptance, the economic and social repercussions remain a subject of debate and discontent three decades later.
This study analyzed Foreign Direct Investment (FDI) trends in Mexico and, based on disaggregated data, identified changes that can be attributed to nearshoring. The geographical origin of FDI was studied, as well as the type of investments (new, reinvestments, etc.).
The city of San Francisco in the United States hosted the Asia-Pacific Economic Cooperation (APEC) Forum in 2023, reaffirming its significance as a host for key conferences in international trade. A total of 22 world leaders gathered to address crucial issues in the Asian and Pacific economies, such as the current state of international trade, the economy, and innovation. Among the numerous highlighted events, government forums took place where various initiatives and programs were launched to revitalize economies, promote clean energy, regulate artificial intelligence, and foster innovation in startups, among other topics. The importance of San Francisco becoming a hub for diplomatic discussions lies in its focus on the North American region to shape the course of current affairs affecting the economy and trade worldwide.
A defining trend of the past year is the fluidity of global supply chains. Companies are on the move, driven by the memory of disruptions caused by COVID-19, significant shifts in demand and supply, demographic changes, and geopolitics. Latin American economies have not fully capitalized on this dynamism yet. To do so, they will need to find a way to work together before the window of opportunity closes. The text explores the challenges of foreign direct investment (FDI) and the right place to allocate it.
A secure and reliable energy sector is one of the most vital elements for promoting economic growth, human development, and increased trade. In this forum, the proposal is to ensure reliable, affordable, and increasingly low-emission access to energy, which will be crucial for the region to seize the opportunities presented by "nearshoring" and meet broader economic integration goals in North America. A key transition is towards natural gas, as it is considered a sector with potential, and with trilateral cooperation, it opens up a new conversation on energy.
"Near-shoring" offers Mexico the opportunity to strengthen its economic ties with neighboring countries and stimulate its economic growth. This study by IMCO focuses on analyzing the advantages at the state level and how to leverage them. To determine the potential for harnessing "near-shoring," aspects such as the labor market, housing and services, availability of basic inputs, regulatory quality, and investment attraction were evaluated.
There are previously examined operational aspects that highlight the benefits of near-shoring. The dynamics of trade have led the business sector to exhibit a growing interest in mergers and acquisitions involving Mexican and international companies. This study analyzes the most significant mergers and acquisitions, categorized by sector and transaction amount, providing valuable information for investors interested in the country.
In this essay, a brief historical overview of the relationship between the United States and China is provided, and it also highlights how Mexico has gradually positioned itself within this trade dynamic. The essay discusses Mexico's market participation trends as a trading partner of the United States and proposes strategies to make the goal of regional competitiveness feasible by leveraging the diversification of supply chains.
This essay emphasizes how for many years, Mexican imports to the United States have been overshadowed by China. However, the trade situation between China and the United States presents an unprecedented opportunity. It highlights the benefits that the tariff trade war brought to Mexico, Mexico's participation in various manufactured goods imports, and their monthly variations in 2019.
The literature is abundant in the benefits of near-shoring and its opportunities, with studies that quantify its economic impact. While the benefits for Mexicans are clear, infrastructure challenges can diminish these benefits if not addressed properly. This article examines the current transportation infrastructure and proposes measures to fully harness the advantages of near-shoring.
Foreign direct investment in Latin America reached a historic high in 2022, but Mexico only garnered 17 percent of its total investment despite its significant economic presence in the region. The article explores the reasons behind this imbalance and raises questions about Mexico's future in the near-shoring trend and the 2024 elections.
Analyzing where we come from and where we are heading, this study examines future opportunities and challenges related to the trilateral North American trade relationship. It delves into issues of governance, dispute resolution panels, employment, and coordination among the three countries, presenting data that underscores the importance of strengthening relations and cooperation among nations.
GBM conducts a new analysis where they introduce a "barometer" to track the progress of a once-in-a-lifetime opportunity for Mexico, which is near-shoring. To do this, they include certain economic indicators and variables that, in brief, suggest a unique opportunity for the Mexican economy that is currently materializing.
In this report on regional economies, Mexico's central bank observes that in recent years, there has been questioning of the global production system based on fragmented international supply chains. This has raised the possibility of a reconfiguration of these chains, with increased production and investment closer to consumer markets, which would strengthen regional production chains. Given the uncertainty surrounding this trend and its impact on Mexican production, they collect business opinions through surveys that help discern the changes in the economy explained by the relocation of supply chains and efforts to bring production closer to the United States.
This essay provides a recount of significant events between 2018 and 2021 in international trade and investment, with an emphasis on challenges that have arisen in the trade relationship between the United States and China. The essay focuses on international companies' efforts to make their supply chains resilient to crises and their intent to diversify away from China. It analyzes the investment environment and variables that bolster the notion that Mexico is an ideal candidate for near-shoring.
This anthology offers a multidisciplinary perspective on the challenges and opportunities for effective labor market and human capital integration in the region, looking ahead to 2050. It calls for collaboration between governments, academia, and industry to develop the skills needed for North America's economic future. Experts analyze and discuss topics such as labor integration in North America, opportunities for labor mobility in the context of nearshoring, the use of work visas like the TN visa, and the regional vision for 2050, which will be key to the review of the USMCA in 2026.
Education and skills are essential for improving people's economic opportunities. Enrollment in U.S. universities has not fully recovered after the COVID-19 pandemic, which is concerning due to the demographic decline in the country. This underscores the need to increase workforce productivity. The report highlights the increase in university enrollment among students from immigrant families in recent years and urges policymakers to recognize the importance of this population, especially in relation to U.S. citizenship permits and university admission criteria. The report provides data and figures that emphasize the relevance of immigrants in higher education in the United States.
In this research paper, the focus is on a temporary work visa known as the TN visa, which serves as an instrument to alleviate labor shortages in the United States. It also provides a pathway for legal integration into the North American labor market. A section of the paper delves into how the TN visa could be expanded and enhanced in future renegotiations of the United States-Mexico-Canada Agreement (USMCA) to incentivize Mexicans to engage in the U.S. labor market with proper authorization.
The United States has been experiencing an unusual labor shortage in the last five years, with extremely low unemployment rates in some states. This shortage has been exacerbated by a decline in legal immigration and is constraining economic growth and job opportunities. The report discusses how trade agreements with Mexico and Canada could help alleviate this shortage by enabling the temporary transfer of workers across borders.
A report that provides an analysis of the labor markets, demographics, and economies in Mexico and the United States, with the aim of proposing a strategy for synergy and complementarity between both labor forces. Through co-production, targeted training, investment attraction, and progressive labor policies, both countries can strengthen their production chains, enhance resilience to crises, reduce unemployment, and mitigate inflationary shocks.