Relief in accordance with the agreement between the United States and Canada. Mexico’s economy but is now under pressure to adapt. From the new free trade agreement, of all places, Mexico could benefit workers – thanks in part to Trump.
The North American free trade agreement does not mean in the future, more NAFTA (North American Free Trade Agreement), but USMCA (United States, Mexico, Canada Agreement ). The almost unspeakable gibberish – it would have been easier to be formulated variants such as CAMUS or MUSCA possible – is quite intentional: America First.
Mexico’s economy Minister, Ildefonso Guajardo, would not, however, run too much importance: “If the child has two legs, and in good health, then it doesn’t matter if it is Juan, Pepe and Pedro.”
Relief in Mexico
That Canada was in literally the last second of the end of August between the U.S. and Mexico reached an agreement annexed, was received in Mexico with great relief. The still in office President Enrique Peña Nieto praised the agreement as a great achievement, because they “met the expectations” and the conditions for further growth of the national economy can handle. The three Pact would not allow it, so Peña Nieto, “to deepen the productive Integration of North America and to consolidate the Region as one of the most competitive in the world”.
Also the newly elected President of Mexico, Andrés Manuel López Obrador, short-AMLO, praised The agreement to improve the wages of the workers in the automotive industry and guarantee the sovereignty of the Oil and electrical industry. At a press conference in Mexico city, he paid tribute to the “outstanding and visionary” role of U.S. President Donald Trump, he agreed to an “open and tolerant” attitude during the negotiations.
Good Timing for Mexico’s new President
The new free trade agreement will probably be a day before AMLO’s office on 1. December will be signed. The new President begins his term of office without one of the biggest hurdles for a Mexican President to have a trade agreement with Trump to negotiate and to be constantly met with hostility.
AMLO’s Confidant during the negotiations, Jesús Seade Kuri, said the agreement was a protectionist, can do but the possibilities for Mexico. Anyone who wants to in the future, exporting to North America, it is a bit heavier, what to bring, in his opinion, the advantages for Mexico.
Donald J. Trump on the 27. August 2018: he has Just proclaimed to have with Mexico, a trade agreement is reached.
Mexico’s Concessions
In order to achieve the agreement, had Mexico, however, must make concessions, for example, in the automotive sector. The NAFTA agreement of 1994 has harmed Mexico’s agricultural sector, but to leave the country at the same time one of the world’s most important locations for the automotive industry. German car manufacturers such as VW or Daimler saw in Mexico, the perfect manufacturing facility for the US market – with six to ten times lower wages than in the North of the Río Bravo.
The resulting trade deficit of the United States to Mexico was, however, Trump has always been a thorn in the eye. The United States, that the value added shares from the NAFTA countries to be raised in the car production from 62.5 percent to 75 percent. This is to increased production costs and adjustments in the supply chain; almost half of the produced in Mexico people not the car corresponds to the new threshold.
In addition, in the future, 40 percent of each vehicle should be produced in factories where workers earn a minimum of US $ 16 per hour. In Mexico, the hourly wage is included in social services for eight dollars.
Ironically, Mexico’s workers could benefit
By USMCA Mexico is relegated to a soon-to-be labour market reform. The new agreement requires Mexico to ensure freedom of Association and “effective recognition” of the collective bargaining, on the elimination of child labour and to ensure “acceptable” working conditions. Compared to the free trade agreement of 1994, the role of the workers is strengthened representative in Mexico.
Doubts, however, are appropriate, how far the new rules have an impact on the strong dysfunction in the Mexican labor market, in which a large part of the collective agreements to be used for the employer’s protection – i.e., apparent-are agreements where the trade unions represented the interests of the employees of the company.
The Mexican minimum wage is 88 Pesos per day (less than 5 US dollars) and is below the poverty line. Mexico will have to up its labour market to adjust. The Changes will help to regulate the trade unions. The Problem is that six are employed of ten workers in Mexico in the informal sector.