MEXICO CITY – Incoming Mexican Foreign Secretary Marcelo Ebrard said on Monday that the trade agreement reached with the United States and Canada is an “opportunity to strengthen the internal market.”
He spoke at a press conference along with Economy Secretary-designate Graciela Marquez, and the person named by President-elect Andres Manuel Lopez Obrador to observe the negotiations with Washington on revising the 1994 North American Free Trade Agreement (NAFTA), Jesus Sede.
“The culmination of this renegotiation process provides certainty in the financial and investment markets and the creation of jobs in our country,” Ebrand said.
The three partners announced on Sunday, after more than a year of negotiations, a new trilateral trade accord that will replace NAFTA and will be called the United States-Mexico-Canada Accord (USMCA).
The pact, according to Ebrard, is an “opportunity for modernization and diversification of the productive sector” that still fully guarantees the rights of workers and labor union freedom.
However, Ebrard emphasized that there will be certain “challenges of adaptation,” particularly for small and medium firms, due to the changes in rules of origin.
In the automotive sector, one of the points that has been most problematic for the renegotiation process, it has been established that to obtain tariff-free access to the US market at least 75 percent of the components of automobiles must be made in the US, as opposed to the 62.5 percent level set by NAFTA.
In addition, at least 40 percent of a vehicle will have to be produced by workers earning at least $16 per hour.
The Lopez Obrador administration, which will begin its duties on Dec. 1, “will seek to push a new active industrial policy for the strengthening of the private sector’s internal labor market,” Ebrard said.
NAFTA encompasses $1 trillion in annual trade among the three countries, but it has been subjected to a renewal process ever since Donald Trump entered the White House, given that he had called NAFTA a “disaster” and vowed to revamp it.