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As the U.S. approaches a review of its longstanding trade deal with Mexico, it would be helpful to remember the uniquely collaborative and constructive aspects of their commercial relationship, the country’s ambassador to the U.S. said in Atlanta March 10.
“Not all trading partners are the same,” Esteban Moctezuma Barragán told a Latin American Chamber of Commerce Georgia breakfast audience at Gwinnett‘s 1818 Club. “Some partners sell, others buy, some compete, others complement, and some engage when it’s convenient. Others stay when it matters. Mexico belongs to this last category.”
Mexico has long argued that its producers support their American counterparts, with companies on both sides of the border working together to form tightly integrated North American value chains that can compete with other regions, notably Asia.
But that getting that story to land with the U.S. government has taken on a new urgency as the Trump administration questions the utility of the USMCA, the successor deal to NAFTA, and uses tariffs as a point of leverage on non-trade issues like drug trafficking and curbing migration from Central America.
The trilateral review of the USMCA, required every six years, is due by July 1.
Always a substantive partner, Mexico has quietly become even more vital for the U.S., displacing China as the top trading partner after security and supply-chain vulnerabilities sent producers on “re-shoring” journeys back to the Western Hemisphere.
Some have landed in the U.S., but others have opted for Mexico, which has a network of trade deals with other key regions like the European Union, Mercosur and individual countries like South Korea.
Either way, the ambassador said, the U.S. benefits from growth in Mexico, whose utility to the U.S. has been questioned on the basis of “isolated numbers” like trade deficits.
“Of course, numbers matter, but what truly defines a strategic economic relationship is the quality of the connection, not just its size,” Mr. Moctezuma said in his opening remarks.
Mexico’s exports, he noted, contain 10 times more value-added from the U.S. that other partners, with more than 40 percent of the content in Mexican goods coming from U.S. inputs.
“When Mexico exports, the U.S. also exports. And this is not outsourcing. This is not competition. This is co-production. Our economies complement each other. Every truck crossing the border, every auto part, every electrical component, every industrial input, supports jobs on both sides of the border,” he said, asserting that each job created in Mexico because of the USMCA supports three in the U.S.
The ambassador added that the top import and export products are the same with states like Georgia, showing that the two economies make things together.
Taking advantage of attention around the upcoming World Cup, for which Mexico is hosting some matches in a joint bid with the U.S. and Canada, Mr. Moctezuma noted that Mexico’s $338 billion in annual imports from the U.S. surpasses the combined imports of all eight countries who have won a World Cup — Brazil, Argentina, Uruguay, Spain, England, France, Germany and Italy.
Mexico offers certainty and continuity, “because our relationship with the United States is not driven by short-term trends or political cycles. It is grounded in geography, shared infrastructure, a workforce trained to produce together and shared values,” he said, noting that U.S.-Mexico trade grew last year even while other indicators faltered.
To underscore his point, experts say that for all the bluster, between 60-80 percent of bilateral trade continues to flow tariff-free through the USMCA or other exemptions.
During a wide-ranging interview with Global Atlanta at the breakfast, Mr. Moctezuma reflected on shared North American identity, Mexico’s role in helping the U.S. curb northward migration and the flow of fentanyl from China, and concerns that a crackdown on drug traffickers, like the killing of El Mencho, with input from U.S. intelligence, will produce a backlash that could harm tourism and investment.
Mexico, he said, faces a no-win situation: Crack down on drug lords and risk conflagrations amplified by international media, or a
He also addressed the issue of worker shortages in the U.S. and how an arrangement with Mexico could help fill the need for more skilled labor, including engineers. Most of the engineers in Tesla’s Austin plant, he noted, are Mexican-origin, leading the electric-vehicle maker to put a plant in Monterrey to tap into universities that are churning out 40,000 Mexican engineers per year. Still, any appetite for discussion on the movement of people in Washington is buried under other issues.
As for the USMCA review, Mr. Moctezuma remained optimistic that clarity will come, especially in an election year in the United States where tackling inflation will be key. He added that the deal is likely to be modernized with regard to digital services, artificial intelligence and rules of origin on key products.
“Whatever we reach, it’s good if people know the rules,” he said, adding that in a world where de-coupling and resiliency are watchwords, Mexico is well positioned, as it will likely be “less punished” than some other partners in the relative world of trade competitiveness.
Besides, Mexico cannot detach from its shared destiny with the U.S., nor does it desire to, the ambassador said.
“You have heard some leaders of the different countries saying that they have an alternative, which could be Asia or China. You will never hear that from a Mexican politician, because we are absolutely engaged and convinced that our future is with the U.S. That’s why I say that Mexico is a reliable partner, and that commerce with Mexico is different than the commerce with many other parts of the world.”