The Business Coordinating Council (CCE) proposed ambitious regulatory convergence within the framework of the review of the United States-Mexico-Canada Agreement (USMCA).

Along with other proposals, Sergio Gómez Lora, director general of the CCE’s Representative Office in the United States, emphasized this measure in the USTR consultations held in Washington. 

Regulatory convergence

To promote an expeditious and successful renewal of the USMCA, the CCE proposed four guiding principles.

The first principle proposes tariff-free access. It applies to all goods that comply with the USMCA Rules of Origin, including those subject to Section 232 tariffs. This protects regional trade.

The second principle seeks rules of origin that promote regional integration. It also aims to maximize North American complementarities. All of this without discriminating between the three countries.

The third principle proposes strengthening the USMCA committees. The goal is to move toward ambitious regulatory convergence, particularly in industrial sectors that are key to regional competitiveness.

Finally, the fourth principle aims to strengthen dispute settlement mechanisms. This would ensure timely compliance with the agreement’s obligations.

Crucial partner

Gómez Lora stated that, among all of the United States’ trading partners, Mexico is the most important. First, to boost domestic manufacturing. Second, to shorten supply chains. And third, to reduce dependence on non-market economies.

This year marked a turning point. Mexico became the main export market for the United States. Between January and August, it purchased $226 billion in U.S. goods. That figure represented 16% of total foreign sales.

Mexico leads as a market for 24 U.S. industries. These include meat, livestock, dairy, grains, sugar, oil and gas, chemicals, plastics, textiles, and auto parts. It is also the largest buyer of steel and aluminum from the United States.

According to Gómez Lora, this demand strengthened the U.S. industrial base in strategic sectors. In addition, Mexico is the first or second destination for exports from 26 states. As a result, trade under the USMCA generates more than 13 million jobs in the United States.

Automotive industry

Mexican exports generate jobs in the United States. No trading partner of the United States incorporates more U.S. inputs and materials into its exports than Mexico. This occurs in various manufacturing sectors, including the automotive industry.

Gómez Lora pointed out that when a car is manufactured in Mexico, it is exported to the United States. It most likely replaces a car assembled in Europe or Asia. This creates jobs in the United States, as vehicles assembled in Mexico contain, on average, 38% U.S. auto parts, while cars assembled in Europe or Asia contain mainly European and Asian parts.

This year, U.S. auto parts exports to Mexico were eight times greater than U.S. exports to Japan or Germany. In addition, 40% of all Mexican exports are intermediate goods, which are used by U.S. manufacturers in their industrial production. All of them have significant U.S. content, from natural gas to iron ore, coal, petrochemicals, and many others. Not long ago, several of these inputs came from Asia.

In fact, Gómez Lora added, trade with Mexico is a crucial tool for the United States to compete successfully with non-North American economies, while creating jobs in the United States. Every dollar that Mexican manufacturers export to the United States supports jobs in the U.S. export sector.