Leaders say USMCA aiding border industries’ recovery from pandemic

The new United States-Mexico-Canada Agreement (USMCA) is already proving that keeping trade flowing through North America benefits all three nations, according to Ruth Hughs, Texas secretary of state.

“[Texas] would not be the economic powerhouse that we currently are without our trading partners in Mexico and in Canada,” Hughes said during a panel discussion, “USMCA implementation and the importance of regionalism,” on Thursday.

The panel was hosted by the El Paso, Texas-based Borderplex Alliance, a nonprofit focused on promoting business and economic development in El Paso, New Mexico and Ciudad Juárez, Mexico.

Along with Hughs, the panel included Rachel McCormick, Canadian consul general, and Roberto Velasco Álvarez, director-general for North America at the secretariat of foreign affairs in Mexico.

Texas’ relationship with Mexico and Canada accounts for almost a million trade-dependent jobs in the Lone Star State and totaled more than $270 billion in 2019 alone, added Hughs.

“Regionalization was originally bolstered by the development of the North American Free Trade Agreement [NAFTA]. Those strong cultural and economic ties really continue to bring about a lot of mutual benefit,” Hughes said.

Trade between the U.S. and Mexico totaled $615 billion during 2019, and $612 billion between the U.S. and Canada, according to census data analyzed by WorldCity. Two-way trade between Canada and Mexico totaled $44 billion in 2019.

McCormick said “reducing red tape” will be one of the keys to the USMCA’s success.

“We need to be making sure we’re preparing for the economy of the future,” McCormick said.

McCormick added that the energy sector is a “great example” of how integration and regionalism among the U.S., Mexico and Canada can work if red tape is reduced.

“The amount of trade between our three countries in the energy sector is really demonstrative of how regionalization has brought security and prosperity,” McCormick said. “The last five years, we’ve done some really concrete work in terms of integrating our information systems. Before, all of our data didn’t match up, or our mapping and pipeline transmission lines and things like that didn’t match up.”

McCormick cited U.S. crude peaking at 2.1 million barrels per day in 2005 as an example of how systems and implementation have improved.

“Forty-eight percent of that oil was coming from OPEC and 16% from Canada. Just last year, 56% came from Canada and 22% came from OPEC. I think that’s a really concrete example of how we have worked together to build the infrastructure, the prosperity and the trade that really powers our economies together,” McCormick said.

For Álvarez, the USMCA means “new chapters” on the facilitation of trade, better customs practices, corruption reforms, new digital commerce laws, and new rules for small and medium-size enterprises with cross-border operations.

“Now we have new tools in the USMCA, we can work on modernizing border infrastructure between our countries to accelerate border crossings, which are very important,” Álvarez said.

John Barela, CEO of the Borderplex Alliance, said the USMCA came at the right time, as it will help create a faster economic rebound from job losses created by the coronavirus pandemic.

“I really believe our region and our three countries will lead the global recovery post-COVID-19,” Barela said.

Click for more FreightWaves articles by Noi Mahoney.

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