Welcome to USMCA Insights, a Brookings newsletter that covers North American trade from a variety of angles. If you know someone that may be interested in subscribing, please share the sign-up formwith them.
Message from the editors: As we approach the third anniversary of USMCA, regional trade continues to reach new heights. In less than three years, trade among the North American partners has bounced back from pre-pandemic levels, and goods trade alone is now worth over $3 million dollars every minute, supporting more than 9.5 million jobs across the region.
We hope you enjoy this edition and continue to follow our work.
Joshua P. Meltzer Senior Fellow, Global Economy and Development, Brookings Institution
Diego Marroquín Bitar Sr. Research Analyst, USMCA initiative
🔢 USMCA by the numbers
Mexico’s foreign direct investment (FDI) soared 48%during the first quarter of 2023, reaching $18.6 billion, compared to the same period in 2022.The manufacturing sector experienced notable growth, attracting 53% of FDI compared to 24.2% in Q1 2022.
More than half of Mexico's FDI is contributed by its North American partners. Key sectors attracting FDI are automotive, aerospace, electronics, telecommunications, and financial services.
In Q1 2023, nearly 80% of Canadian exports found their way to Mexico and the United States.
A remarkable82% of Filipino- and Korean-owned businesses in Canada displayed awareness of USMCA, while the figure stood at 67% for all Canadian businesses surveyed in 2021.
In 2021, Louisiana’s goods exports to Mexico and Canada supported almost 22,000 jobs in the state. Minerals and plastics of $4.2 billion per year are significant exports from Louisiana to Mexico and are responsible for over 3,500 local jobs (USMCA Tracker).
⏩ Fast stats | Biotechnology and agriculture
Over 90% of U.S. crops, including corn and soybeans, use genetically modified varieties (GM), according to the Economic Research Service of the U.S. Department of Agriculture (USDA).
As of February 23, 2023, U.S. corn exports commitments globally (shipments plus outstanding sales) were down 39% from last year, totaling 29.2 million metric tons, according to the USDA's Foreign Agricultural Service. In 2021, Mexico surpassed China as the top market for U.S. corn.
👤 Expert viewpoint | Valeria Moy
"Without competitive energy, the regionalization of supply chains, and development of digital economies, nearshoring in North America will remain an idea, not a reality."
In our USMCA Forward report for 2023, Valeria Moy, general director of IMCO (Mexican Institute of Competitiveness), contributes valuable insights on enhancing supply chain resilience, competitiveness, and energy integration within North America.
Moy emphasizes the crucial role of Mexico in aligning with investments made by the United States and Canada in renewable energy. Moreover, she highlights the significance of ensuring clean energy access to fully leverage the opportunities offered by the digital economy, as well as to ensure the smooth expansion and integration of North American supply chains.
On January 31, 2023, the United States established a second USMCA panel to challenge Canada's dairy tariff rate quota (TRQ) measures. On February 10, 2023, the Mexican government filed a notice to participate as a third party in the dispute. The panel final report is due October 11, 2023.
Labor
Manufacturas VU ll. On March 31, 2023, the United States and Mexico announced a plan to address workers' rights violations at a Mexican facility in the state of Coahuila. This is the third time the countries have agreed on a course of remediation under the USMCA's Facility-Specific Rapid Response Labor Mechanism (RRM). The deadline for remediation is September 30, 2023.
Unique Fabricating. On April 27, 2023, the United States and Mexico announced that the RRM petition in the state of Querétaro had been resolved. The government of Mexico conducted a review and took various actions, such as providing training and monitoring a union representation vote. The company signed an agreement with the new union, committing to provide equal access to the facility, prevent potential freedom of association violations, and provide dues from its affiliates.
Goodyear SLP. On May 22, 2023, the United States trade representative submitted an RRM request to review whether workers at the San Luis Potosí automotive facility are being denied the right to freedom of association and collective bargaining. Mexico has until June 1, 2023 to agree to conduct a review and, if it agrees, until July 16, 2023 to complete it.
📘 Recommended reads
Can North America become a semiconductor powerhouse? In this analysis, Ryan C. Berg and Americas Program colleagues at the Center for Strategic and International Studies present a comprehensive overview of the challenges, advantages, and opportunities associated with building a regionwide semiconductor industry. The authors delve into the notable achievements that emerged from the inaugural North American Semiconductor Conference held in May 2023.
Women's lives in Mexico. An infographic from México, ¿cómo vamos? shares insights into the economic and social landscape for women in Mexico and offers a complete overview of their progress and challenges.
