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 Even without NAFTA, Mexican products will be competitive

Even without NAFTA, Mexican products will be competitive

The competitiveness of Mexican export products would not be affected by the proposal to modify NAFTA, since if this happens, the country could be competitive in various sectors if its tariffs are adjusted.

The rates charged by the United States to countries with which it does not have a treaty range from 1.7 to 7.5 percent and the global rate is 4 percent on average, said Enrique Zavala, director general of the National Association of Importers and Exporters of the Mexican Republic.

The low increase in tariffs and the higher value of the dollar against the peso, would help to circumvent a trade restriction, explained Manuel Valencia, director of the International Business career at Tec de Monterrey.

 

ATTENTION

However, some sectors such as the automotive industry should be vigilant because without NAFTA tariffs of up to 25 percent would be charged on finished products, said Beatriz Leycegui, partner in Foreign Trade at Grupo SAI Consultores.

In other sectors such as agriculture, there would not be a high tariff, but since the profit margins are so low "even if it is a small percentage, it does lose competitiveness and have an impact, in case the United States denounces NAFTA" Leycegui warned.

The expert said that NAFTA has strengthened regional production, so ending this treaty would go against the trend of competing for blocks at the global level.

 

TARIFF ON CARS

Among the Trump proposals that have resonated the most are placing a 35 percent tariff on cars that are exported from Mexico to the United States.

However, in the framework of the World Trade Organization (WTO), Donald Trump would not have the power to materialize the plan.

"To do this, it would have to leave the WTO, which is unthinkable given the interests of the United States," explained De la Calle.

The other way would be to carry out a countervailing duty investigation for Mexico, but it should meet several characteristics: that there is dumping, that there is injury and that more than 50 percent of that industry agrees with the investigation, the specialist explained.

Manuel Díaz, president of Ei and former president of the Mexican Institute of Foreign Trade Executives (IMECE), considered that Trump's proposal to end NAFTA and bring production back to the United States, obeys a political discourse to obtain votes.

In practice, placing high tariffs would generate inflation in the United States market.

If tariffs of 35 percent were placed, the prices of products in the sector would rise 25 percent on average, in addition it would be affecting companies with US capital that have taken advantage of the NAFTA clauses to produce in Mexico and sell the finished products in that country, Díaz said.

 

http://www.elfinanciero.com.mx/economia/aun-sin-el-tlcan-lo-productos-mexicanos-serian-competitivos.html

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