STORY INLINE POST
July marks three months since I finished my two-year term as president of the American Chamber of Commerce of Mexico. It also marks the three- year anniversary of USMCA. This is a year in which the great opportunities that come from regional integration have led us to a new era: the Era of North America.
AmCham represents around 1,300 companies that account for 21% of national GDP and 20% of the private investment in Mexico. They are also responsible for the creation of more than 8 million direct and indirect formal jobs. The companies represented by AmCham are American but also Mexican and multinational. What they all have in common is their commercial interests in the US, and thus, in US-Mexico integration.
Through a network of 30 committees at a national level, AmCham is a hub for the exchange of best practices and represents its companies through permanent dialogue and the active formulation of proposals before Mexican and American authorities.
Even though I had participated in the Chamber for around eight years before becoming president, my experience in this role gave me a 360° perspective on the fundamental correlation between both economies, and the conviction that what is good for Mexico is good for the US and vice versa. Cooperation is not a nice to have, but a common goal all stakeholders involved share to ensure the prosperity, security and competitiveness of both countries. Today:
Our 3,000km border is daily crossed by more than 500,000 vehicles, and around 1 million people.
Around 12% of the US population has Mexican origins.
The USand Mexico are main trading partners, with a daily exchange that surpasses US$2 billion.
Since NAFTA, bilateral trade has increased 711%.
During my term as president, as we were emerging from the COVID-19 pandemic and relations between the US and China continued to show the need to develop stronger and closer value chains for priority industries, the great opportunity of nearshoring emerged. Mexico, with its proximity — both geographical and ideological — to the US and a renewed trade agreement, holds an unbeatable advantage to seize a large part of this opportunity.
As we did with NAFTA, North America set a new paradigm with USMCA. It is the most modern Free Trade Agreement in the world, going beyond free trade to include regulatory cooperation and regional standards that have implied regulatory updates in Mexico — labor, intellectual property rights, digital economy — to increase its competitiveness in a 21st century economy. Three years since its entry into force, the consensus is there have been important advancements in USMCA’s implementation, and the results are visible: in 2022, Mexico’s trade with North America grew by 27.6% in comparison to 2019, accounting for around 65% of its total trade.
Moreover, USMCA was negotiated in the most opportune moment, allowing the creation of a regional vision, achieving an agile recovery post-pandemic and creating the opportunity for nearshoring.
In the context of the U.S Mexico’s unique closeness and integration, nearshoring, which has also been referred to as “ally-shoring” or “friend-shoring,” because of the shared values among North American countries aims to create an interconnected system of production in North America to strengthen a region with true potential to become the most competitive in the world. The benefits are clear: further integration with more opportunities for SMEs, job creation and business growth in emerging economic sectors – including export industries – through binational initiatives, as well as gaining resilience in the face of potential external threats.
According to Santander’s Nearshoring Data Monitor, Mexico’s GDP could grow an additional 8% during the next six years due to nearshoring, estimating that Mexico’s exports could go from 14% of US imports today, to 20% in 2030. According to data from the Mexican Association of Private Industrial Parks (AMPIP), only in the last year, the construction of 47 new industrial parks began in the country.
What is evident to me is the great interest of AmCham companies in making this happen, and investment is coming; according to the Ministry of Economy, during the first half of 2023, the private sector announced 174 investment projects, with expectations of around US$64 billion in total investment. Also, according to a study conducted by BBVA Research and AMPIP, 453 new foreign companies are expected to arrive in the country over the next two years.
The question is, what share of this enormous opportunity are we going to capitalize? For Mexico, this depend greatly in covering five factors:
Certainty for investment.
Availability of clean, accessible and competitive energies.
Investment in infrastructure.
Development of adequate, specialized talent, in which the private sector plays a major role.
Looking to the future, I am optimistic about the potential for our two countries to build an even stronger relationship and region. The current situation in North America is the result of a vision that was conceived decades ago. The challenge is to continue building ties and to find new ways to link, build and reach consensus for the bright future of our region. Today, working along with new President Daniel Baima and the Executive Committee, what I see is a Chamber that effectively promotes these enablers and motivates its business leaders to be ambassadors of Mexico abroad, to attract more long-term investments