Santamarina Steta

Without T-MEC, "It will be a return to Law of the Jungle"

Mexico can be isolated, without investment and jobs, and with an upcoming economic recession if it leaves the Treaty between Mexico, the United States, and Canada (T-MEC).

After asking President Andrés Manuel López Obrador yesterday if he plans to leave the treaty due to the controversy between the United States and Canada on the energy issue, the president replied that, although they are Mexico's main trading partners, he will not accept giving up sovereignty national.

“Even in the case of the most important market in the world (the United States), if having access to that market implies giving up sovereignty, we do not accept it. We are not going to surrender our independence to any foreign government. In addition, they are not right”, assured the President.

In this regard, the former president of the Appeals Body of the World Trade Organization (WTO), Ricardo Ramírez Hernández, said that Mexico has become the greatest beneficiary of the T-MEC.

“The USMCA complaint should be thought twice. Mexico is the biggest beneficiary of the T-MEC since it establishes clear rules for the exchange. Without the T-MEC, we return to the law of the jungle, so let's not forget that the WTO mechanism is inoperative”, explained the also founding partner of RRH Consultores.

In an interview with EL UNIVERSAL, he commented that in chapter 34 of the T-MEC, he states that if a party intends to leave the treaty, it must present “A written notification of denunciation to the other parties. A denunciation shall take effect six months after one party presents the written notice to the others."

For his part, the partner in charge of the transactional area of Santamarina and Steta, Juan Carlos Machorro, opined that taking into account the relationship and interconnection of the economies, it is extremely hard to abandon the covenant "because the value chains are interconnected between the treaty partner countries."

From his point of view, the most likely thing is that Mexico loses a panel and benefits are withdrawn, and tariffs are applied to us in the sectors that hurt us the most, such as auto parts, manufacturing, and agricultural products.

Should the above happen, “what could happen is that the President entrenches himself even more, wraps himself in the anti-Yankee, pro-sovereignty, pro-oil ownership banner, although this does not upset the sovereignty or ownership of the oil, ”he said.

If we out the covenant, "we will be foolish sovereigns because we are going to be isolated, without investments, without jobs and with an economic recession that Moodys has already announced... and with an impoverished country," said Machorro.

He explained that, according to the T-MEC, the country cannot modify the opening of the energy sector if it is to close it, nor adopt discriminatory measures against Americans and Canadians to support Pemex or CFE.

“But it seems that the President either does not fully understand, has not been explained to him, or does not want to understand that despite what Chapter 8 says, the energy sector is protected. It is covered by the covenant in a transversal way in matters of Cross-Border Trade in Services, Investments, National Treatment, Most Favored Nation Treatment, and State-Owned Companies," he explained.

For Machorro, the negotiator of AMLO's transition team in the T-MEC negotiation, Jesús Seade "gave gruel with his finger [to the President], and what he placed in chapter 8 is useless."

Source: El Universal

Juan Carlos Machorro