Diplomatic Corps Luncheon
Ambassador Martha Bárcena’ s Keynote Address
World Affairs Council of Western Michigan
Tuesday, May 14th, 2019
It is an honor to address the World Affairs Council of Western Michigan today.
I have been talking constantly to the media, to congressmen and congresswomen, and especially to audiences such as this one today to contribute to a wider and better-informed discussion on what NAFTA and its successor, USMCA (or TMEC as we call it back home) means to the countries involved.
Now, as the Mexican Ambassador and as a representative of the Mexican government, I am very much aware of what NAFTA and the USMCA mean to Mexico.
Nevertheless, since I arrived in DC five months ago, I’ve come to realize that a lot of Americans are not entirely sure what it means to them.
Maybe NAFTA has been a victim of its own success because a lot of people now take its benefits for granted since life under the treaty has been part of their reality for the past 25 years.
What I can tell you with confidence is that NAFTA reshaped the North American economies with far reaching implications for our companies, our consumers and our societies.
Since the treaty came into effect in 1994, United States trade with Mexico (and Canada) has more than tripled, growing more rapidly than American trade with the rest of the world. Presently, the North American trade is worth almost 1.3 trillion dollars.
Mexico is now the United States’ second largest export market and its largest trading partner.
Our bilateral trade exceeded $611 billion USD in 2018 which means that we trade more than 1 million dollars per minute.
Moreover, according to the U.S. Chamber of Commerce, the jobs of five million American workers depend on U.S.-Mexico trade... five—million—people. That is basically every single person living in Alabama right now.
Mexico is also the first or second most important export market for 26 U.S. states, including the four border states whose economies are strongly linked to trade with Mexico.
Mexico is Michigan’s second-largest trade partner and more than 138,000 jobs in this state depend on the free trade with Mexico.
Since NAFTA came into force, Michigan exports to Mexico increased by 850 percent. Furthermore, Michigan exports to Mexico are larger than all U.S. exports to Italy, Spain and Israel combined.
The fact that the U.S. pays literally nothing on most goods that cross the border back and forth every single day allowed us to create a North American Supply Chain that is highly integrated.
For the rest of the world, the U.S. is a market — that’s true when you look at China, or South Korea, for example. In the case of Mexico, Canada and the United States, we trade in order to produce things together.
Just look at the automotive sector in North America: one piece of a car can cross the border up to 8 times based on a “just in time” model before the car is finally assembled. The result has been that North America is the second largest auto parts production region in the world.
With all its flaws, the reality is that our free trade has enabled numerous U.S. industries, including the automotive one, to be globally competitive.
Now, NAFTA had its failings and as it got older it became obvious that it needed to be modernized to meet the necessities of 21st century economy.
This is why the new USMCA raises rules of origin across manufacture to attract more investment and create more employment in the U.S. and the region.
The USMCA sets out to fight corruption and creates space to support small producers —a key component missing in NAFTA. It expands our digital commerce, facilitates trade in financial services and protects the environment.
The treaty also includes a key chapter on Labor that requires Parties to adopt and maintain fundamental labor rights. This issue, as you all know, has been addressed by Democrats in Congress, and in particular by Speaker Nancy Pelosi, who voiced her interest in the labor provisions in Mexico.
On this I want to be loud and clear… Mexico has been fully committed to carry on specific legislative actions to provide the effective recognition of the right to collective bargaining and comply with USMCA obligations.
This is why a few weeks ago, the Mexican Congress approved a comprehensive labor reform aimed at ensuring workers can freely vote for their union representation and contracts.
In fact, a progressive and effective labor rights agenda was always one of the top priorities of President Lopez Obrador, so for the incoming government this was a win-win scenario. Democrats could not find a better ally on this issue.
This is a historical reform and a definite “game-changer” that will effectively transform the labor system in Mexico.
Amongst other things, independent courts will replace the current labor board to resolve disputes and register contracts. We are confident that these institutions will be strong enough to ensure enforcement.
Mexico has done everything in its power to ensure that USMCA becomes a reality.
The USMCA is not perfect but we’re confident it will have a long-term positive impact on our economies and it will allow us to remain globally competitive.
The alternative of a region without USMCA and, possibly, without NAFTA, would have dire consequences for the three countries involved. The fate of the USMCA will directly impact the fate of millions of ordinary Americans, whose prosperity is directly linked to free trade with Mexico.
We should not let politics stand in the way of a free trade that has yielded enormous benefits for both our societies.
In the time I have been here speaking to you, our countries have traded more than 15 million dollars already.
NAFTA transformed our economies but it also changed the way our two societies interact.
The failure to adopt USMCA would represent the biggest setback in decades because our free trade has not only allowed us to become one of the most competitive regions in the world; it has also built trust and stability between us.
Beyond the politics of antagonism and the grim tales about the border that dominate the media these days, there is a thriving and globally competitive Mexico whose people, communities and trade are intimately tied to the United States.
Our relationship must be defined not by the challenges we face, but by the prosperity and opportunities we can create together.