Despite the objections of some Georgia growers, a Mexican trade official said the new USMCA trade deal helps ensure year-round access to fresh fruits and vegetables for Americans — one of many benefits she pitched from the newly enacted agreement that provided needed “certainty” in North American trade.
The improved nutrition underpinned by the NAFTA successor that went into force July 1 is all the more important as both countries do their utmost to fight off major outbreaks of COVID-19, says Mexican Foreign Trade Undersecretary Luz María de la Mora.
“Eating a healthy and balanced diet is more important than ever with the pandemic, and Mexico-U.S. trade can guarantee that,” said Ms. de la Mora said during a webinar on opportunities under the USMCA presented by the Mexican Ministry of Economy and the Consulate General of Mexico in Atlanta July 23.
Before the North American Free Trade Agreement, the average U.S. consumer ate four pounds of fresh tomatoes per year. Today, that number is 10, she noted, stressing the importance of the USMCA in maintaining open markets for consumers.
Agriculture has been a “shared success story,”, with the U.S. being Mexico’s top trading partner in agricultural products worth $47.5 billion in 2019, she said. Agricultural trade between the countries has been free from tariffs and nontariff barriers since NAFTA.
However, some Georgia farmers have seen Mexican growers as encroaching on their market share. In an event last year with Global Atlanta on USMCA, Georgia Agriculture Commissioner Gary Black said passing the agreement would hurt growers of tomatoes and blueberries, now a huge crop in Georgia.
A UGA study also predicted that USMCA would force job losses among growers, an assertion USDA Secretary of Sonny Perdue, a former Georgia governor, vigorously sought to refute.
Meanwhile, Mexico and Georgia have great “complementarity” in the automotive, electronics and energy, Ms. de la Mora said.
The COVID-19 pandemic has put considerable strain on North American production, however, as the U.S., Mexico and Canada have been forced establish barriers to the free movement of people, Ms. de la Mora said.
The USMCA has helped to coordinate efforts among the three countries by defining protocols for the reopening of essential activities in agriculture, food provision, transportation, services and technology, she said.
The USMCA also provides rules for the “digital economy” governing the Internet of Things, data flows and intellectual property protections that support the development, use and sharing of technology.
Zero duties for cross-border trade in digital products like music, games, e-books, plus protections for software source code and algorithms, reduces the costs of trade and promotes innovation and new business – especially for small- and medium-sized enterprises (SMEs) – in the digital space, she said.
“We must redefine how we are going to make use of technology to increase integration in North America,” Ms. de la Mora said, especially in light of the pandemic, as e-commerce and digital tools provide important connections.
The USMCA is to be a key factor in the economic recovery of North America as a region, as it helps companies restructure global value chains and relocate to take advantage of nearshoring, she said.
“Mexico is already an important partner and ally of Georgia, Alabama and Tennessee,” she said, noting that more than 150,000 jobs are supported by Georgia-Mexico trade. Some $3.5 billion or 8.5 percent of Georgia’s total exports go to Mexico, and $7.8 billion or 7.6 percent of the state’s imports come from that country, with overall trade between the two geographies increasing over the past few years, she added.
Exports from metro Atlanta to Mexico have grown 235 percent since 2005, comprising 15 percent of the metro area’s total exports and valued at $3.6 billion.
Much of this growth has been seen in services such as information technology, while Georgia exports of aerospace, food processing, forestry, metallurgy and other products are also increasing, especially with the help of the Port of Savannah, said Mexican Consul General in Atlanta Javier Díaz de León.
Ms. de la Mora took part in the NAFTA negotiations in the early 1990s as an economic counselor at the Mexican Embassy in Washington and later served as a NAFTA Chapter 19 dispute resolution panelist.
She said that while it’s a “new era” in North American integration, the new agreement’s 34 chapters are also building on NAFTA while adjusting to 21st century realities.
“We are not starting from scratch. We already have an integrated region that we have created for more than 26 years,” said Ms. de la Mora said.
The deal includes a stronger set of rules about the environment, competition, anti-corruption, labor rights, gender issues and the digital economy to “offer better and more inclusive and responsible trade,” Ms. de la Mora said.
In 2019, Mexico displaced Canada and even China as the United States’ top trading partner.
While NAFTA created the “North American factory” and the region became a powerhouse for manufacturing, the USMCA is poised to further boost regional cooperation, especially in the context of the COVID-19 pandemic and the ongoing U.S.-China trade dispute, she said.
The uncertainty around U.S.-China relations opens opportunities for North America to attract new investment, integrate regional value chains and take advantage of Mexico’s trade agreements with 50 countries that provide preferential access to those markets, she added.
“The USMCA may be a very powerful tool for companies to redefine their strategies and remain competitive with regional value chains,” she said.
Mexico is committed to the success of the USMCA, as witnessed by the July 8 visit of President Andrés Manuel Lopez Obrador to Washington, Ms. de La Mora asserted.
“The implementation of the USMCA is a breath of fresh air for the region,” she said.
Ms. de la Mora invited Georgia companies to investigate new opportunities for doing business with Mexico. Contact the Mexican Consulate in Atlanta for more information.