Opinion article published in El Economista, Opinión / Salud, Dinero y Negocios [Opinion / Health, Money and Business] Section by Marielena Vega..
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The arrival of Joe Biden to the presidency of the United States will be more than beneficial, complex, but beneficial for Mexico. This is the perception of analysts and of the business sector in the national territory, although it is not ruled out that the investment grade will be lost in 2022 if better mechanisms for economic recovery, for driving investment and providing legal certainty are not established.
With Biden, a democrat and a Democratic House of Representatives, the US will apply greater pressure on Mexico in the compliance with the Labor Chapter of the USMCA; we should not forget that congresswoman Nancy Pelosi, a democrat, appointed three important members of the union Council Experts.
Thus, the Democratic Party will now take control of the Agency for the application of the USMCA through the Departments of Labor, Economy and the Treasury, they will appoint the labor attachés and, therefore, it is expected that the American Government will use all of its power to ensure that Mexico complies with the Labor Reform, especially since the American unions are a part of the Democratic Party, and they have insisted that there is a violation of the rights to union association and collective bargaining in Mexico.
Furthermore, lawyer Ricardo Martínez, says that the USA will use the System for the Rapid Resolution of Labor Disputes as soon as possible to pressure Mexico into complying with its labor obligations, in addition to all of the compliance schemes established in The Implementing Law.
This situation corners Mexico into complying with the Labor Reform, signed with Donald Trump, and into reviewing the work done with the unions, which would be highly beneficial to ensure that the real ones remain. Which is a lot to say, there is talk that only 30% of the 700,000 unions comply with the new international standards. Or will it be that this time they will truly clean up.
Anyway, the truth is that we will have to bet on adapting to Biden, to clean energies, to foster investment and on a more or less stable relationship, Mexico does not have much leeway if it wants to advance its economy.
And while it is true that Mexico and the US have a relationship that both benefit from keeping stable, the reality is that the US is in control.
The recovery of the neighboring country and main commercial partner is a great incentive and trigger for the recovery of Mexico, but it is not a panacea, progress must be continued to be made in the application of laws and commitments acquired through the USMCA, the new government of the United States will not operate in social networks, but in the real world.
The stock markets are reacting in a positive manner to the election of Biden, and a new contribution is expected for the economic reactivation of the United States and of course, this benefits the economy of Mexico, via imports and exports.
Companies are getting into debt without stimuli, and we could see bankruptcies later on. And in the absence of programs to boost the trigger for investment, it will be complicated to expect anything that is not an economy that takes longer to recover.
Indebtedness is in keeping with the investment grade, the debt assumed by Pemex, under the direction of Octavio Romero Oropeza and the debt assumed by the CFE [Federal Electricity Commission], headed by Manuel Bartlett may make for a darker outlook; there is no country, with the exception of India, that has investment grade with a debt of 60% of the GDP.
There are three core issues between the US and Mexico: migration, security and trade, so an immigration reform is in the offing, as well as s strengthening of security and providing legal certainty.