McAllen Economic Development Hosts Webinar on Trade Across Borders: What Matters Now
By Anayancy Ulloa
March 23, 2022
What matters now in relation to cross-border trade? This topic, as well as the main impacts, were addressed in the virtual seminar organized by the McAllen Economic Development Corporation (MEDC). Two experts on the subject participated in this space: Jorge Torres, president of Interlink Trade Services, and Flor Torres, executive director of Competitive Industrial Center – Trade & Customs Services.
The topics addressed were focused on the supply chain, the US trade agenda, as well as the Mexican trade agenda.
Keith Patridge, president of MEDC, mentioned that this seminar is being held with the intention of keeping the community updated and that they have a better understanding of the potential impact of the United States, Canada and Mexico Treaty (USMCA, for its acronym in English) on its business.
Jorge Torres, president of Interlink Trade Services , has extensive international experience in foreign trade, Torres participated as the main panelist to address the main provisions, changes or doubts that exist around the USMCA treaty and shared his point of view about the possible impacts in today's global trading environment that everyone is facing every day.
Flores Torres, executive director of the Competitive Industrial Center – Trade & Customs Services , complemented Jorge Torres' presentation by giving more details about the current issues related to the USMCA that affect commercial operations in Mexico.
In his presentation, Jorge Torres addressed the main updates around the USMCA, he also spoke about the impact on cross-border trade, some aspects of the implementation of the USMCA, the interruption of the supply chain and the impact on trade, trade policy of the current administration, the labor force, e-commerce ; to mention a few things.
HOW IS THE USMCA IMPACTING BORDER CROSSINGS?
“Obviously we had the Covid-19 pandemic in 2020, so that affected general trade,” Jorge Torres mentioned.
It must be remembered that the USMCA began during the year in which the pandemic also began, and although it was thought that it was possible that they postponed it, this was not the case, they decided to start it. He mentioned that when it comes to actual data, 2020 was affected overall.
However, in 2021 there was an increase in trade and this is reflected in the growth that is taking place in the economy globally and in the region.
“That's something that we're still running into, so we're going backwards as far as trade volumes go, we're going back to pre-pandemic numbers, and with the growth that we're having we're going to see that continue. USMCA continues to contribute to that,” said Jorge Torres.
TOP THREE US TRADING PARTNERS IN 2021
Trade statistics indicate that, in 2021, Canada was the US's top trading partner.
*(Figures in billions of dollars)
Exports - $307.6
Imports - $357.2
Total - $664.8
% of total trade – 14.5%
Exports - $276.5
Imports - $384.7
Total - $661.2
% of total trade – 14.4%
Exports - $151.1
Imports - $506.4
Total - $657.4
% of total trade – 14.3%
UPDATE OF THE T-MEC
AUTOMOTIVE IMPLEMENTATION ISSUES
The USMCA renewed the automotive rules of origin; The three greatest impacts of this renovation indicate that:
• The USMCA increased regional value content requirements.
• New requirements for vehicle manufacturers in the use of steel and aluminum.
• New requirements for work value content.
TOWARDS ELECTRIC VEHICLES
Jorge Torres also highlighted in his participation that there are strict provisions in the automotive sector and it is observed that the industry is moving towards the production of electric vehicles, for which he considered that the rules must be adapted to be more flexible with new technologies.
“It is very interesting to see that the automotive provisions in the USMCA have radically changed and are now being challenged, I think they are going to evolve and be modified to adapt to the needs in the automotive industry,” he said.
Regarding the interruption of the supply chain and its impact on trade, Jorge Torres stressed that, as many know, the interruption in the supply chain is not over yet and this situation is expected to continue this year, and even could extend to 2023.
One interesting tidbit he shared is that the ports of Los Angeles and Long Beach, which account for 40% of the shipping containers entering the US, have started operating 24/7. week, to alleviate supply chain bottlenecks; however, with labor shortages in both storage and transportation, disruptions are expected to continue. However, they consider that these supply chain interruptions will not be as severe as in 2020 and part of 2021, since, in general terms, global manufacturing is open.
The good news is that supply disruptions are estimated to level off by mid-2022, as inventory levels begin to normalize to pre-Covid-19 levels, consumers will begin to shift to sustainable consumption and capabilities. of shipping eumenten.
ANAM: NEW MEXICAN FISCAL AND CUSTOMS AUTHORITY
For her part, Flor Torres, from CIC, commented on the new structure for the administration of customs in Mexico with the creation of the National Customs Agency of Mexico (ANAM).
Flor explained that through this agency it is intended to have better control of the goods that are imported and exported through the 49 customs offices that exist in the country.
"The big change is that they are now controlled by the armed forces and this represents a great transition," Flor Torres said.
He explained that ANAM is a decentralized administrative body of the Ministry of Finance and Public Credit (SAT), with the aim of curbing the smuggling of goods, drug trafficking, tax evasion, as well as 'cleaning all customs in the country '.
• On July 14, 2021, this change was formalized with the publication in the Official Gazette of the Federation (DOF) of the decree by which ANAM was created.
• On December 21, 2021, the decree issuing the Internal Regulations of the ANAM was published in the DOF and is effective as of January 1, 2022.
• ANAM has technical, operational and managerial autonomy.
• ANAM is the new Mexican customs and fiscal authority.
Flor Torres commented that, after learning about ANAM's internal regulations, it is necessary to take into account and understand what powers and functions ANAM has and what SAT has. This includes foreign trade operators, from the maquiladora industry, decision makers, finance managers, foreign trade, operators, customs agents; that is, all those involved in the merchandise import and export operation.
"With this change, the two bodies (SAT and ANAM) remain at the same level of the institutions in Mexico," he mentioned.
POWERS AND FUNCTIONS OF ANAM AND SAT
• Continues with everything that has to do with collection, inspection of income taxes, value added, IEPS; that is, of all internal taxes.
• It will continue with the review of foreign trade operations outside customs.
• It will issue the legal interpretation criteria on tax laws and foreign trade laws.
• It will be responsible for the collection of taxes generated by foreign trade; that is, import and export, as well as the right to customs procedures.
• Will be in charge of the direction, organization and operation of customs services and inspection services.
• Will implement and guarantee legal compliance, regulating the entry and exit of merchandise in and from the national territory.
"Both institutions are correlated and empowered to review taxes from different perspectives," concluded Flor Torres.
If you want to know in detail all the aspects addressed in the presentation, you can consult it at: