The Canadian Chamber of Commerce (Cancham) asked the Mexican government to engage in investment attraction activities. According to the institution, Mexico can strengthen the regional value chains under the USMCA framework.
Cancham: press release
This Thursday, the Canadian Chamber of Commerce (Cancham) asked its regional trade partner, Mexico, to be serious and reliable regarding investment issues. The Chamber stated that Mexico should attract investments within the USMCA framework, particularly in the energy sector.
In a press release, the 300 members’ organization said Mexico could enhance its “nearshoring” strategy, allowing Asian investments to flow into North America. This nearshoring trend refers to economies’ opportunity to join different value chains across the world through open trade.
In that regard, Cancham observed that Mexico would only achieve such a strategy if it behaves like a serious and reliable trade partner.
The Chamber also highlighted that Mexico preserves its sovereignty over its natural resources under the USMCA framework and several other energy-related regulations. Canada and the United States maintain each of their natural resources independence as well.
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However, under USMCA and many other trade deals, Mexico has assumed crucial trade commitments. According to Cancham, Mexico cannot change its rules overnight to neglect what it has already subscribed to in previous accords.
Therefore, the Chamber believes the current Mexican government is trying to discriminate against foreign investment from the national one. The administration favors state-owned companies, Mexican Oils (Pemex by its Spanish acronym), and the Federal Commission of Electricity (CFE by its Spanish acronym).
In that sense, the Canadian Chamber defends the Mexican 2014 Energy Reform, which opened the economy and, more particularly, the private sector’s energy sector. This reform consolidates through the USMCA framework, among other trade and investment deals.
Canada-Mexico trade relations
Through 2Q of 2020, Canada positions as the second source of foreign direct investment to Mexico, with $3.4 billion. This quantity accounts for almost 19.1% of the total FDI in the country.
Cancham also observed Mexico’s National Development Plan bets for a sovereign, sustainable, low-emission, and efficient energy policy. In that regard, the Chamber believes these goals would only be addressed through a private investment participation promotion.
Since the beginning of his administration, the Mexican President, Andrés Manuel López Obrador (commonly known as AMLO), has repeatedly said that under previous governments, rapacious energy contracts severely affected the state-owned companies, CFE and Pemex.
That is why he committed to rescuing both companies from foreign and private investors’ hands. Therefore, AMLO has released a series of federal policies intended to limit electricity generation from privates.
From 2018, the private sector accumulates more than 170 protection provisions against the President’s measures.
According to the Consejo Coordinador Empresarial, the companies holding those provisions jointly represent approximately 14% of Mexico’s gross domestic product (GDP), $44 million in investment, and more than 81,500 jobs, reported Forbes Mexico.
Source: with information from Forbes Mexico