The class usually starts 10 minutes after the hour to accommodate students moving between classes.
A significant interest in US-Mexico relations has been noted this year, with a record enrollment of approximately 79 students in the class, which is the largest class size since its inception.
The class format is fully online.
Overview of Course Modules
Module 1: Understanding the US-Mexico relationship from both public policy and international relations perspectives.
Module 2: Detailed historical review of US-Mexico relations, including a comprehensive look at Mexico's history and its international relations, highlighted by a session with Ambassador de Ljou.
Module 3: Focus on trade and investment, introduced in today’s session.
Speaker Ken Smith, an expert in trade negotiations, will lead the discussion.
Ken Smith's Background
Ken Smith has extensive experience in trade negotiations, having served as Mexico's lead negotiator for the United States-Mexico-Canada Agreement (USMCA) during the Trump administration.
He began his career in trade negotiations while pursuing a master's degree, initially working at the Mexican embassy in Washington, DC, during the NAFTA negotiations in the early '90s.
Ken currently works for Aegon, a strategy firm specializing in investments, trade, and economics in Mexico.
Key Discussion Points on US-Mexico Relations
Current State: The ongoing review of the USMCA amidst the distinctive trade policies of the Trump administration.
Structural Advantages for Mexico:
Access to US Markets: The USMCA provides Mexico with significant advantages, including preferential access to the US and Canadian markets, essential for trade and investment growth.
Economic Dependence: 83% of Mexican exports go to the US; international trade contributes approximately 73% to Mexico's GDP.
Foreign Direct Investment: Approximately 50% of foreign direct investment in Mexico comes from the US and Canada, making the agreement critical for future economic stability.
Challenges in US-Mexico Relations
Trade Policy Changes: Mexico faces turbulent times due to the US's shift towards protectionism under the Trump administration.
Increased tariffs (up to 25%) imposed on Mexican goods due to ongoing tensions related to immigration and security issues.
Historical lessons from Latin America demonstrate the risks of adopting protectionist policies, which aim to stimulate domestic industries but often lead to greater economic crises.
USMCA Overview
USMCA's Significance: Despite challenges, the USMCA remains instrumental in promoting trade and investment among the three nations.
Content of the Agreement: 12 new chapters were added to address modern issues such as digital trade, environmental standards, and labor rights, while also maintaining a prohibition on tariffs restricting trade among the three countries.
Potential Scenarios for USMCA Review
Administrative Review vs. Renegotiation: The review process is set for July 1, 2026, with possible outcomes ranging from limited administrative changes to a full renegotiation.
Scenario A: Limited review; maintaining the current agreement with some parallel agreements.
Scenario B: Complete renegotiation of the agreement.
Scenario C: Prolonged renegotiation beyond 2026.
Scenario D: Potential exit from USMCA, though less than 5% likely given the importance of the agreement.
Strategic Recommendations
Adaptation: Mexico, Canada, and US must adapt to the evolving economic environment and push back against protectionist measures while proposing collaborative strategies on issues like immigration and security.
Collective Influence: Encourage private sector engagement to advocate for the benefits of the USMCA and against tariffs that threaten trade relationships.
Diversification of Trade Relationships: Mexico should continue to pursue and enhance trade agreements with other countries, while recognizing that the US will remain its primary trading partner.
Conclusion
The critical need for robust dispute resolution mechanisms to ensure compliance among all three nations in the USMCA, as ongoing disputes do not negate the agreement's functionality.
The goal moving forward is to maintain stability and predictability within the USMCA framework, amidst considerable political and economic turbulence.