Commercial scenario between Mexico and the United States after the arrival of Biden to power.

Wednesday, February 3, 2021

After a cordial relationship between President Andrés Manuel Lopez Obrador and Donald Trump. A new president arrives with new ideologies that seem to point towards a better cooperation between both nations taking advantage of the T-MEC free trade agreement.

The United States scenario presents several priorities for the new president of the United States, where the opportunities for improvement are very wide since the country is not at its best in many aspects.

One of the most important issues, commercially speaking, is the stance that the new President Biden will take with two countries in particular: Mexico and China; trade allies on which he must focus in order to get the most out of them.

Among the important issues for the new U.S. president is the monitoring of labor issues for workers in Mexico, where he must ensure that the new standards imposed for Mexico are complied with in accordance with the free trade agreement.

In addition, market access provisions for automotive and agricultural products, in rules such as investment, government procurement and intellectual property rights, labor, environmental and rules of origin.


“Buy American”

In the first days of his administration, Biden signed the so-called “Buy American” initiative, which supports the “America First” ideology proposed by his predecessor and which seeks to favor the consumption of products made in the United States, prioritizing domestic companies and products for contracts with the federal government.

In addition, the initiative tightens public procurement rules in order to reduce the purchase of imported products, as well as to request higher local content requirements and ensure better access to information for small and medium-sized companies so that they have more possibilities to bid for government contracts.

At the same time, Biden also assured that the federal government will opt for the purchase of domestically produced automobiles, which may generate a rise in the cost of parts manufactured outside the U.S., an industry in which Mexico is one of its main trading partners.

This initiative may generate a negative change in the medium term with Mexico, but it opens the possibility of closing supply integration proposals with the United States and guaranteeing economic cooperation between both nations.