Today, the USMCA is the largest trade zone in the world, with trilateral trade reaching an annual figure of $1.2 trillion.
This year marks three decades since December 1992 when the North American Free Trade Agreement was signed by the presidents of Mexico and the U.S. and the prime minister of Canada to create a zone aimed at eliminating and overcoming barriers to trade and facilitating the movement of goods and services, promoting fair competition and increasing investment activities among the three countries.
In November 2018, the three nations signed a new agreement, the United States-Mexico-Canada Agreement, which contains many of the elements of NAFTA, updating and enhancing its scope in order to further increase regional trade, investment and commercial services.
Today, the USMCA is the largest trade zone in the world, with trilateral trade reaching an annual figure of $1.2 trillion. To understand the astronomical figure, 12 zeros must be added to 1.2.
According to official estimates, in 2022 trade between Mexico and the U.S. reached the historic figure of $779.3 billion, a growth of 17% over the amount recorded in 2021.
After four years of work that brought together specialists from the three countries, the Mexico Institute of the Wilson Center in Washington, D.C. published last year an important study by Alan D. Bersin and Tom Long entitled “North America 2.0: Forging a Continental Future.”
The report highlights the wide variety of assets that North America holds on the world stage which give it unparalleled comparative advantages.
It has a vast continental and maritime territory (with access to the Atlantic, Pacific and Arctic Oceans), 500 million people – a favorable demographic bonus – whose economies generate 30% of global goods and services and trade flows that represent 17% of global trade.
The study in question shows that North America has been built mainly from the bottom up. Throughout these years, interactions between officials from the different levels of government of the three countries have strengthened and multiplied. The same has happened with businesspeople and technicians from practically all industrial and agricultural sectors.
These connections have made the region an economic and trade giant. Although NAFTA was long an unpopular symbol in U.S. domestic politics, there is evidence that a majority of Mexican, U.S. and Canadian respondents now view the USMCA positively and favor regional cooperation to boost trade value chains through nearshoring and ally-shoring, issues we will address at length in a future article.
For now, in my opinion, it is obvious that the best bet for the future of national development is to take advantage of, and further strengthen, our economic integration in North America.