If you have a customer who buys 84 percent of everything you produce, would you breach the supplier agreement you signed?
If you have a client who allows you to pay one in four employees in your business, would you forget the pre-established commitments that allow them to trade?
If you have a client who continues to invest in your business, which means 40 percent of the new capital injections, would you break the agreements that allow their investments to continue?
More or less this caliber is the shot in the foot that the Mexican government is willing to give with modifications to 20 laws (18 of them, constitutional reforms) that in one way or another affect a contract of the size of the T-MEC.
For 30 years, Canada and the United States have formed a trade alliance that moves 3.6 billion dollars per minute. This economic bloc represents no less than 30 percent of the world’s GDP and has allowed us to become the main trading partner of the largest economy on the planet.
When NAFTA was being negotiated between 1991 and 1993, one of the points on the table as necessary for the three partners to be on equal legal terms was to have antitrust agencies that allow competition. Thus, the Federal Competition Commission (COFECO) was created in 1993, exactly 100 years after the United States had its own antitrust office. antitrust. One of the main points of the Treaty (both in the original NAFTA and its renewed version in 2020, the USMCA) is that this competition/antitrust issue be autonomous, that is, independent of the Executive Branch. In President López Obrador’s package of exit reforms, both the Federal Competition Commission and its spin-off, the Federal Telecommunications Institute (IFT), effectively pass to the federal government: the first under the sphere of the Ministry of Economy and the second to the Ministry of Infrastructure, Communications and Transportation.
What was clear in the USMCA (signed and in force) is that this independence and autonomy makes it possible to avoid conflicts of interest or possible abuses of power, such as being both judge and party.
There are other reforms of the famous Plan C, which also violate a contract (signed and in force), such as returning Pemex and CFE to being public companies of the State, they would cease to be productive companies to comply with a social mandate that is above the profit of companies or private investors. The two companies would undoubtedly receive special treatment from the federal government, something that affects the free competition that was agreed upon in the T-MEC four years ago and in the NAFTA 30 years ago.
Another has to do precisely with Judicial Reform, since one of the clauses of the treaty (signed and in force) requires that each of the partners (the United States, Canada and Mexico) have impartial and independent courts.
The approval of Plan C next September will have not one, but three direct effects on the USMCA.
And as is known, uncertainty and non-compliance with previous agreements (signed and in force) is the worst ingredient for foreign direct investment (FDI), which to be fair, in the specific case of the United States we should call foreign direct reinvestment, because of the almost 30 billion dollars that were injected into the country -with the boom of the nearshoring– In fact, 97 percent were reinvestments from companies already established and with capital in the country, of which 44 percent were from American companies.
If you were their clients, what would you do?
