MEXICO CITY – The possibility that US President Donald Trump could meet the threat of pulling his country out of the North American Free Trade Agreement ( NAFTA ) is minimal if it is considered that this decision should be supported by Congress, which supports the modernization of the agreement that came into force in 1994, said César Buenrostro, partner of International Trade and Customs of KPMG in Mexico.
The US Constitution conveys authority to both the president and Congress on foreign affairs, so if the US president decides to withdraw unilaterally from NAFTA without congressional approval, the matter would have to be litigated in federal courts, said César Buenrostro.
He emphasized that the immediate achievements of the negotiations that can be highlighted are:
Small and medium businesses
In the most recent round, trade representatives announced a new chapter focusing on small and medium-sized enterprises, which aims to support the export of their products and services, as well as their integration into larger supply chains throughout the NAFTA region . “For Mexico alone, this could benefit the more than four million small and medium-sized enterprises that are registered and currently account for only 7.6% of total Mexican exports,” he added.
Increased customs cooperation and improved cross-border movement of goods are unlikely to be controversial; In the last round of negotiations, progress was also made on issues of essential procedures (such as automatic declarations of origin, regulatory harmonization and electronic forms).
The promotion of a greater integration of the three markets for a sector that experienced a recent reform in Mexico and that, for the most part, was out of reach in the original agreement. The three countries also agreed to include some provisions related to the energy sector in order to take advantage of the recent reform in Mexico and promote regional investments, as well as greater integration.
It is a sector that was born at the time of the original agreement; it is likely that renegotiation will comprehensively cover e-commerce operations. What is the only point that is subject to debate? The United States could pressure Mexico and Canada to increase their “non-taxable” thresholds with the intention of restructuring and harmonizing the import process and, in so doing, increasing the competitiveness of United States merchandise and thereby , increase exports.
The technical teams of Mexico, the United States and Canada should bet to finalize agreements in the process of renegotiating the free trade agreement between the three countries to increase the certainty of investments in the North American region, said César Buenrostro.
According to the specialist, the delegations of the three countries “must close the chapters where matches are found” so that the investment plans of the companies continue their course in each of the nations.
It is a good sign that the exchange rate will remain stable in the negotiations, “but it will be” much better if the chapters are closed, no matter that they are those with simple themes, because gradually it will have to be advanced in the most complicated “, Commented the interviewee.
“The most important thing for companies operating in a global economy is not simply whether the rules are negotiated in their favor. On the contrary, something of great importance, and recognized by the negotiating teams of the North American Free Trade Agreement, is that there is a long-term vision (certainty) in the agreement, “concluded César Buenrostro.