Mexico must remove its barriers to digital trade, according to the Business Roundtable (BRT).
The CEOs of the Business Roundtable represent all sectors of the US economy and lead companies that generate one in four jobs and nearly a quarter of the national GDP.
Barriers to digital trade
According to the BRT, Mexico has adopted several barriers that unjustifiably restrict U.S. digital trade interests.
This position was set out in a letter sent by the BRT to the U.S. Trade Representative (USTR) as part of the consultation process for the United States-Mexico-Canada Agreement (USMCA).
The BRT stated that Mexico must remove cloud barriers that affect financial services companies.
According to the BRT, Mexico continues to apply a 2021 regulation that requires electronic payment fund institutions to maintain a business continuity plan in the event of a disaster, based on: a multi-cloud approach with at least two cloud service providers in two different jurisdictions or an in-country data center that does not depend on the primary (foreign) cloud provider.
“The Mexican measure lacks prudential justification and is incompatible with Article 17.18 of the Financial Services Chapter of the USMCA, which limits requirements for the use or location of local IT facilities as a condition for market access,” it said.
Cloud infrastructure
In addition, the BRT indicated that the National Banking and Securities Commission’s approval process for the use of cloud services is resource-intensive and discriminates against foreign providers, as existing local data centers must complete a shorter notification process.
This de facto data localization requirement adds to an already complex and lengthy process that electronic payment fund institutions face in obtaining regulatory approval to use cloud infrastructure abroad, while local infrastructure enjoys a more streamlined process.
The BRT appreciated that the USTR has raised concerns about these requirements with the Mexican government and urged the USTR to ensure that this issue is resolved through the joint review of the USMCA.
Chinese companies
Mexico should remove the “emergency switch” and Article 30-B from the 2026 Economic Package. A proposal in Mexico’s Economic Package would require foreign digital service providers to grant the Tax Administration Service (SAT) permanent, real-time access to their systems and records related to operations in Mexico.
Failure to comply could result in the temporary blocking of digital services, known as the “emergency switch.”
In addition, the SAT would coordinate with the newly created National Agency for Digital Transformation and Telecommunications to manage the technological infrastructure and data analysis associated with this obligation.
Mexican authorities have stated that this proposal is aimed at Chinese e-commerce companies, but its wording is too broad and covers all providers. U.S. companies should enjoy the same status as Mexican companies and not be subject to these requirements.